- Associated Press - Thursday, January 19, 2012

SEOUL — A single, reunified Korea has long been a cherished dream of people on both sides of the world’s most heavily fortified border. South Korea even has a Cabinet-level ministry preparing for the day.

And while Kim Jong-il’s death last month has raised those hopes higher among some in Seoul, few are eager to talk about the cold reality: Sudden reunification could be traumatic for both countries.

Any North Korean collapse and hurried reunification, analysts say, could spell the end of Pyongyang’s ruling class while flooding Seoul with refugees and causing huge financial burdens — perhaps trillions of dollars — for South Koreans who only recently have gotten used to their country’s emergence as a rising Asian power.

Korea observers aren’t predicting such a collapse or the kind of “big bang” reunification that happened in Germany, which saw the overnight fall of the communist side and its swift absorption into its Western neighbor. The new North Korean leader, Kim Jong-il’s son Kim Jong-un, is fast consolidating power, winning key backing from the government and military.

Still, the extraordinary changes in North Korea since the Dec. 17 death of the man whose iron rule lasted 17 years have stirred up dreams of a single Korea among some in the South. And not just in those with memories of life before the country was divided into U.S.- and Soviet-occupied zones in 1945.

The Swiss-educated Kim Jong-un “is less allergic than his father was to introducing new ideas from the world. That will help ease isolation and open room for reunification,” officer worker Bae Sang-Il, 36, said. “A generational change is meaningful in North Korea.”

Many South Koreans support the idea of eventual reunification, but they seem more wary of the huge costs that will come with it.

A poll in South Korea late last year, before Mr. Kim’s death, showed just more than half of those interviewed believe they eventually would be better off after reunification, although more than two-thirds said the costs are bigger than the benefits.

Both countries talk about reunification, but they have very different notions of what it would be.

North Korea sees it as a two-state federation, with each state abiding by its own rules and regulations but as one Korea.

South Korea and the United States likely would balk at anything other than a Korea that is a liberal democracy, or at least moving in that direction.

From Seoul’s point of view, slow and steady are crucial for any successful reunification. A sudden reunification would be a serious blow for South Korea’s vibrant economy and well-ordered society.

South Korea, whose constitution enshrines the goal of reunification, will be much better off, analysts say, if it can gradually build up a North Korean economy that Seoul estimates is about 1/40th its own size.

Whatever happens, officials in Seoul will be faced with a monumental set of problems. They likely will have to open up the North’s economy to trade and investment, quickly raise the living standards of millions, control the flow of North Koreans into the South, and retrain North Korean bureaucrats so they can help run the country under new policies.

This will be very expensive.

A South Korean government-affiliated institute said recently that the cost could be up to $240 billion after a year and up to $2.4 trillion after a decade.

South Korea’s president has urged his country to prepare for reunification by studying the possibility of adopting a tax aimed at raising money for the costs of integration. The idea largely has stalled for the time being.

The German model is often raised for Korea, but there are important differences.

West Germans largely footed the bill for reunification after the collapse of communism, bringing the overall infrastructure of the former East Germany up to a standard similar to that in the West.

North Korea’s population, however, is about half the size of the South’s, while East Germany’s population was only a quarter of the West’s, according to Erik Lueth, an economist at the Royal Bank of Scotland.

East Germany, he points out, was one of the wealthiest of the Soviet affiliated states; North Korea is much poorer than the South, and there are estimates of widespread malnutrition.

Also, East Germany’s ruling elite, chafing under the Soviet yoke, was not averse to the idea of uniting with West Germany and even accepting its capitalist system.

North Korean leaders, analysts say, won’t quickly accept a system that would take away their power and seek accountability for a rule that the United States and others say often trampled on rights.

“Reunification would be terrible for North Korea’s elite and wonderful for the North Korean people, although there would be a traumatic period of adjustment,” said Ralph Cossa, president of Pacific Forum CSIS, a Hawaii-based think tank. “For the top handful of North Korean leaders, reunification under Seoul would mean jail or worse.”

For South Korea, reunification “will no doubt be messy and costly, even if it comes with a whimper, not a bang,” Mr. Cossa said. Still, “living with a hostile, unpredictable, nuclear-armed North Korea is not much fun either.”

Reunification also could provide eventual benefits for the South’s economy.

Economist Marcus Noland at the Peterson Institute for International Economics describes a “peace dividend” that would come with a reduction in military tensions and the associated drop in military spending. The North also has abundant natural resources and a relatively well-educated and cheap labor force.

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