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[Sheb]

Except Korea didn't get off thanks to foreign investment. The big chaebol were arm-twisted into creating a solid industrial base, and they're still depending on the state for a lot of things, from financial support t
O regular amnesties from financial crimes.

There is no reason they cannot re-industrialise the north.

[Skyrunner]

The thing is, jaebul and the gov't depend on each other, now. The gov't politicians give benefits to jaebul companies and 'overlooks' some of their drawbacks, and the jaebul provide re liable post-office jobs to the politicians that helped them out.

The government cannot armtwist the jaebul anymore.

[Owlbread]

I think China's PR concerns are overestimated. It could nuke Korea and USA still wouldn't install economic sanctions against it, simply because USA's economy would completely collapse if China suddenly stopped being a trade partner.

I think China's power is often overestimated. They are as impotent as the USA, and depend entirely on foreigners buying their products at very low prices. China is an exporter, if people did not import from China then their economy would crash.

[Sheb]

Skyrunner: there is also the case that a single government may have trouble managing both north and south: the policies that benefit one may not benefit the other. North Korea need a new Park Chung-hee. South Korea needs nothing of the sort.

[MetalSlimeHunt]

Oh boy, here we go.

[misko27]

I heard his aunt, currently number six on the Koreans influence list, survived the purging of her husband. It's interesting, they were estranged, but both were mentors to the Uninator.


Anyway, it seems like the debate "Kim-Jong Un: crazy, or crazy like a fox?" has been answered: He isn't too clever for us too follow, but simply too insane. It worries me, but frankly I sorta expected. The question now is how much he is influenced by the saner people around him, a worrying one given the recent purge.

[Lagslayer]

The question now is how much he is influenced by the saner people around him, a worrying one given the recent purge.

My guess would be "not enough".

[mainiac]

Unification would probably bring the % of Koreans in poverty waaay up. We don't have enough jobs as it is!

While a unified Korea would obviously have a higher poverty rate than South Korea right now, the poverty rate in South Korea would improve massively through unification.

Economics is in many ways a game of diminishing returns.  We all know that it's good to invest in the future, in new industries, new technology.  But actually knowing what is going to pan out is usually pretty difficult (there are exceptions where the stumbling blocks are just political or organizational, but I digress).  But what a unification situation would offer is a huge, massive set of investments that you know are going to be profitable.  And these investments will overwhelmingly be handled by Korean conglomerates.  That shifts the aggregate demand and the interest curves in an enviable way, both lowering the already low South Korean natural unemployment rate and giving the central bank more ability to swiftly correct recessions when they occur.  So the result is that South Korea would have low unemployment and bouts of unemployment from recessions would be shorter.

That's not to say that things would be completely good for working class Koreans.  Although the new economy should in theory increase their purchasing power, it's not unreasonable to be cautious and consider that might not pan out.  Namely the increased economic power of the conglomerates might broaden inequality and make the current South Korean middle class worse off then before in a pessimistic scenario.  But even in that pessimistic scenario, it's probably going to be good news for the current low end wage earners in South Korea.  Even if their purchasing power stagnated, they would be enjoying a strong job market throughout.  And when you are talking about poverty, it's unemployment and job insecurity that are key.  It's fear of unemployment that drive low wage workers to accept an erosion in wages.  It's bouts of unemployment that put people in the various cycles of poverty that the sociologists talk about.  So even in a pessimistic scenario where the middle class gets squeezed, things probably are going to look good on the poverty front.

[Duuvian]

I don't see why more resources for them to use would encourage them to leave.

It's the Dutch disease.

In short: More resource export => Positive trade balance => Value of domestic currency rises => Increased costs, decreased profits. ((Because wages are payed in domestic currency, but income is foreign currency))
Also:      More jobs in mining sector* => Less unemployement => Higher wages => Higher costs.

*The influx of cheap North Korean labour might mitigate this, but overall they don't have the education nor trained personal to perform a variety of needed tasks.

I don't know if that's set in stone, for example Detroit is known for automobile production because it's close to the iron mines in the Upper Peninsula via Great Lakes shipping. While it's true Detroit's industry has been in a decline, I don't think it's due to less unemployment and the domestic currency has been inflating rather than increasing in value.

If there are resources in North Korea, and South Korea has an industrial base and ways to ship those resources to the factories, I don't think it would be bad for those factories' owners and the country they are in if it replaces or reduces resource importation.

[10ebbor10]

It only works for nations, and for massive resource exports. The existence of an iron mine isn't enough. The massive amounts of oil, minerals and other metals in North Korea are.

[LordSlowpoke]

It only works for nations, and for massive resource exports. The existence of an iron mine isn't enough. The massive amounts of oil, minerals and other metals in North Korea are.

best korea has no oil.

south korea either didn't even prospect for it or has the results of said prospecting a state secret i don't know

[10ebbor10]

Yeah, my bad.

Anyway, it does have massive quantities of rare earth and other minerals.

[Duuvian]

It only works for nations, and for massive resource exports. The existence of an iron mine isn't enough. The massive amounts of oil, minerals and other metals in North Korea are.

Why couldn't new corporations be formed in South Korea (or the North) that would utilize the resource wealth of North Korea without creating the situation you describe? If they really want to be protectionist, they withold their resources from export or only extract for their own needs for production. Maybe even do tariffs, though that's just asking for some country to tariff your finished product instead of the resource probably.

[10ebbor10]

Because the resources are primarily rare earth's. Things that are very suited for exportation, but not as beneficial for export substitution.

Using them solely for domestic use would make them mostly useless.

[Duuvian]

But by forcing international corporations who want to use those resources to invest in factories there in order to use those resources, doesn't that fix that problem? Unified Korea would be exporting components or a final product that requires those rare earths, produced by a company that likely might be international, instead of the rare earths themselves.