August 16, 2010 13:24
President Lee Myung-bak in a nationally televised speech on Sunday marking the 65th Liberation Day urged South Koreans to prepare for reunification with North Korea. "Reunification will happen. It is therefore our duty to start thinking about real and substantive ways to prepare for reunification such as the adoption of a unification tax," Lee said. "I ask that these and other issues related to this be discussed widely and thoroughly by all the members of our society." He said the two sides need to "overcome the current state of division and proceed with the goal of peaceful reunification" and proposed a three-stage reunification plan that starts with the creation of a "peace community" with the denuclearization of North Korea, followed by an "economic community" through comprehensive inter-Korean exchanges, and eventually the full integration.
A sudden regime collapse in North Korea is no longer a distant possibility. North Korea has been in a virtual state of paralysis since the mid 1990s due to economic stagnation. By proposing to discuss the prospect of reunification, Lee is seeking to prepare the public for that eventuality.
The Presidential Council for Future and Vision estimates the cost of reunification at US$2.14 trillion by 2040 in the event of a sudden regime collapse in North Korea. That is twice the size of South Korea's GDP last year. The cost of reunification between East and West Germany was 2 trillion euros or W3,000 trillion (US$1=W1,187). In other words, South Korea could be slapped with a staggering bill if it has to confront unexpected reunification. Lee proposed the unification tax in order to get people to prepare.
"There is no concrete government position on the estimated cost of reunification, and there are no specific details of the unification tax," a Cheong Wa Dae official said. Cheong Wa Dae officials say the government is not yet pursuing the unification tax in detail out of concern that it could trigger fears among South Koreans and agitate North Korea.
Very few South Koreans will oppose a plan to prepare economically for eventual reunification. The problem lies in how to allocate the expenses and how to come up with the money required. This issue should not be handled solely as a cost problem, but should be discussed as part of a society-wide preparation for reunification. But without detailed explanation, Lee simply said, "Reunification will happen" and proposed the creation of a unification tax and pitched his "three-stage" plan. That has prompted people to wonder why he brought up the issue.
Tensions in inter-Korean relations since the start of the Lee administration have left the W1.5 trillion inter-Korean cooperation fund virtually untouched. Following North Korea's attack against the South Korean Navy corvette Cheonan in March, the South has prohibited trade with the North, except for the joint Kaesong Industrial Complex. People are curious to know why the president has called on them to discuss the prospect of reunification at this point in time.
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