International Trade

Growing income gap between two Koreas is the contrast between Republic of Korea (ROK) and Democratic People’s Republic of Korea (DPRK).

ROK- export oriented

DPRK- juche-based self reliance

North South

Foreign Trade of the North and the South

YEAR EXPORTS IMPORTS EXPORTS IMPORTS

1970 365 396 835 1,984

1975 814 1,093 5,081 7,274

1979 1,150 1,160 15,056 20,339

1985 1,380 1,720 30,283 31,136

1989 1,690 2,900 62,400 61,500

1991 1,400 2,310 71,900 81,500

The Threat of WarDPRK- lead in one important area, they accumulated military

hardware and armed forces.

-North has nearly twice the number of men under arms (1,132,000 to 633,000), nearly twice as tanks and combat aircraft, and far more armed helicopters and submarines.

-unifying Korea under its control is through military conquest.

Hope for UnificationPeaceful unification is possible, for both Koreas sharing

a deep nationalism.

-economies are broadly complementary and could fit together, if the political and economic difficulties of transition could be handled.

The South Korean Plan for Unification

The ROK Ministry of Finance studied on what to do if peaceful unification happens.

First, they think the two currencies should not be exchanged at par.

Second, they want to limit migration of northerners to the South.

Third, they proposed to renationalize all land in the North and then to sell it or lease it as quickly as possible.

Finally, they propose financing the costs of unification by foreign borrowing, problematical given the ROK’s continuing large foreign debt burden.