United Korea 'Could Overtake Japan, Germany'

      September 22, 2009 08:44

      U.S. investment bank Goldman Sachs speculates that a unified Korea could overtake G7 countries like France, Germany and Japan in economic strength. In a report Monday, Goldman Sachs projected that given North Korea's potential, a unified Korea will in 30-40 years be on a par with or overtake G7 countries except the U.S. in dollar GDP.

      Though North Korea's planned economy system looks on the verge of collapse, it offers a large and cheap competitive workforce and a wealth of natural resources whose value is 140 times larger than its GDP in 2008. A combination of South Korea's technology and funds and North Korea's resources and workforce would be a powerful force, the report said.

      It speculates that the reunification of the two Koreas will proceed in three stages: transition (2012-2027), integration (2028-2037) and maturity (2038-2050).

      North Korea's per capita income will reach half of South Korea's about 20 years after the integration stage, and the growth rates of the two Koreas will converge at the maturity stage, the bank speculates. A unified Korea will follow the China/Hong Kong reunification model, which allows two political and economic systems to co-exist, rather than the German model, which envisages one side giving aid to the other, the bank speculates.

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