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Trust Building through Institutions: European Lessons for Korean Unification
Region: Europe
Location: Germany
Published January 28, 2009
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The U.S. National Intelligence Council report, Global Trends 2025: A Transformed World, published in 2008, predicts that Korean unification is likely by 2025 “if not as a unitary state, then in some form of North-South confederation.” Although the report does not specify the form of unification, unitary or confederal, it is interesting to note that U.S. intelligence analysts are optimistic about the prospect for Korean unification. Global Trends 2025 is only a rough prediction of what the world will look like in 2025. It does confirm, however, that intelligence analysts consider Korean unification attainable within the next two decades.
The most common assumption about Korean unification is that North Korea will integrate into South Korea and not vice versa. Korean unification means the ending of the North Korean regime and its territorial and political incorporation into South Korea. Not surprisingly, German unification has been widely discussed and has a great appeal for many South Koreans. The peaceful absorption of communist East Germany (the German Democratic Republic, GDR) by its more prosperous western counterpart (the Federal Republic of Germany, FRG) was mainly considered a happy ending. Although Koreans can and should learn important lessons from Germany’s unification process, it should be noted that most lessons are negative, that is to say, they teach Koreans what not to do.
We argue that the German unification model, in no small part because of Germany’s unique position within Europe, is not as helpful for Korean unification as it may appear at first sight. Instead, we argue that important lessons can be learned from European integration in the European Union. The European Union model, which successfully integrated 10 former communist states, most with a much lower GDP than East Germany, into the free market capitalist system of the EU is a much better system for South Korea to emulate in the preunification stage. More specifically, we argue that the best way to prepare for possible Korean unification is through the institutions and trust building that has brought centuries-old rivals into a partnership for peace, security, and prosperity.
The process of unification comprises two stages: (1) preunification stage and (2) unification stage. The preunification stage refers to the period up until unification, during which the two sides have the ability to infl uence the likelihood of unification as well as the difficulty of the transition. This stage requires no agreement on unification and can last for many decades. The importance for considering this stage lies in the fact that decisions made during the preunification stage greatly impact the potential success of a future unification. We are of the opinion that the sooner the South Korean government starts preparing for unification the better. This is not the case because the start of 2009 provides some unique opportunity in North-South Korean relations, but simply because any measure that can potentially reduce the transition costs is well worth the investment.
Compared with the preunification stage, the unification stage is the period in which an actual agreement on unification exists and the two countries are in the process of implementing this agreement. Much has been written about the unification stage, and interesting parallels have been drawn between German and Korean unification. The focus of this article is, however, the preunification stage. Instead of predicting the moment of unification—that is to say, asking when the two Koreas will unify—we ask how South Korea can best prepare for a possible future unification.
In the unification literature a significant distinction is made between gradualism and instant unification. Because of the immense disparities in economic welfare between the two Koreas, many scholars have suggested that a gradual transition toward unification would be more desirable than instant unification. Gradualism could, for example, take the form of limited unification in terms of economic integration, with a continued physical segregation of the two Koreas until full unification will no longer threaten to throw the South Korean economy into turmoil. We believe that such gradualism in Korean unification, as in the German case, is neither feasible nor desirable. From a humanitarian standpoint, furthering economic integration cannot justify keeping the Korean people separated. And for economic reasons the benefits of a gradual approach to unification would be marginal at best. We believe that if Korea unifies in the next two decades it will most likely be as swift and sudden as was the case with German unification in the early 1990s. Whether or not South Korea is ready, when the North Korean state collapses unification will be instant. Our contribution in this article is to provide insight into how the South Korean government can be as ready as can be expected when the question of unification becomes a reality.
The following section discusses German reunification and analyzes the price of a successful political transition to reunification that was paid by “scarifying” the economic sphere. Despite the frequent appearance of the German case in academic writings and policy discussion relating to Korean unification, relatively little research has been done so far on distinguishing the different lessons the German experience entails: political success and economic failure, which is the main point of the second subsection. The next section briefly touches on the seemingly obvious similarities between the two Koreas and the two Germanys and describes the significant differences that give pause to those who look to Germany as the exemplar of unification. The final two sections, which analyze the integration process of the EU, argue that the real model for Korean unification is not the two Germanys but the European Union. Emphasizing the importance of institutions and trust building, these sections suggest that the political and economic process of EU integration can be a benchmarking example for Korean unification.

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