Korea's Reunification from the Perspective of Northeast Asia’s Economic Integration

I. Introduction : In the Post Cold War Era, no other region has shown such a high level of economic dynamism as Northeast Asia. This can be ascribed to China’s economic rise and a rapid expansion of intra-regional economic exchanges and cooperation, i.e., there has been continued expansion and deepening in the division of labor among Northeast Asian countries, particularly with the explosive growth of the Chinese economy. In spite of its proximity to China, however, North Korea has been forgoing all economic possibilities as a consequence of its own political decision to shun globalization and regional cooperation. It is astonishing that North Korea still remains as a poverty pocket in the dynamic Northeast Asian region. Being an enclave right in the middle of the most dynamic region in the world, North Korea cannot maintain its present position for an extended period. Its internal outcry and external demand to open its gate can hardly be suppressed with a political oppression and reclusive policy. At the same time, it is still an open question what path North Korea will take in the event of its escape from the poverty pocket and join the international division of labor. The prospects for a unified Korean economy is diverse, ranging from a gloomy picture of double collapse as a consequence of the huge burden of unification to a rosy picture of becoming a global middle power in several decades. In fact, Korea's reunification involves a variety of risk factors as well as diverse opportunities, depending upon the path taken by the two Koreas during the course of actual reunification. We can imagine a variety of unification scenarios depending upon its final outcome, such as the best scenario, the worst scenario, and the most probable one. All these different scenarios entail specific preparations in the future. While the worst scenario would require the construction of a contingency plan, the best scenario, a visionary one and the most probable one, would compel a depiction of a desirable environment in the future. For the following discussion, we would adopt a hybrid of the best scenarios and the most probable ones. Also, in order to make our discussion simple, a unitary state is assumed to be the final governmental structure of the unified Korea even if the final outcome would be path-dependent and the process will substantially determine the end-point state.