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An economist specializing in the North Korean economy has said the longer Korean unification is put off the more expensive it will become when it finally happens. "In order to reduce the costs of unification, we must quickly unify, and North Korea must end its one-sided devotion to politics and the military and open up substantially,¡± Prof. Hwang Eui-gak of Korea University said Monday.
He warned the economic gap between North and South Korea had been growing rapidly, especially since the 1990s, and the cost of unification was growing exponentially.
Hwang¡¯s book "The Korean Economies: A Comparison of North and South," recently published in Japan, is an update of the original English-language edition published by the Brookings Institute in 1990, to reflect developments until 2000.
According to Hwang¡¯s estimates, the cost of unification would have been US$312 billion in 1990, US$777.6 billion in 1995 and US$1.204 trillion in 2000. He computed the cost based on the investment needed to equalize per-capita income in the two Koreas. As of the end of last year, North Korea's per-capita income was US$914, about one-fifteenth that of the South.
"The North Korean economy is in a state of virtual ruin,¡± Hwang said. ¡°The food crisis is a problem, but the energy crisis is the most serious." He said energy shortages reduced operating capacity of North Korea's factories, which was 78 percent up till 1989, to 25 percent, and most had virtually shut down. The Stalinist country¡¯s energy shortage is severe due to lack of hard currency for imports of heavy oil as well as to serious power leakage from the country's antiquated power lines.
Hwang started investigating the North Korean economy for the Brookings Institute book. His next subject is post-unification Korea. "The issue is, how do we overcome the great differences in thinking and systems between North and South even after unification,¡± he said. ¡°I will look for alternatives in the social, education and public policies sectors."
(englishnews@chosun.com )
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