Reunification in 2030 would cost up to 2.8 quadrillion won: report

SEOUL, Oct. 7 (Yonhap) -- Reunifying the two Koreas in 2030 would cost up to 2.8 quadrillion won (US$2.38 trillion) over the three decades between now and 10 years after reunification, a report showed Friday, as the government mulls levying a unification tax.
According to the report sponsored by the Unification Ministry, reunifying the Korean Peninsula in 2030 would require 79 trillion won in preparation costs, or 0.14 percent of South Korea's gross domestic product (GDP), and between 734 trillion and 2.8 quadrillion won to consolidate it. The latter process would account for 1.7 to 6.76 percent of GDP.
The cost would fall to between 379 trillion and 1.26 quadrillion won under a shorter-term scenario of reunification in 2020, and would increase to as much as 3.28 quadrillion won under an extended time frame of 2040.
Given reunification in 2030, the North Korean people's income would reach 36.5 percent of that of their southern counterparts by the end of the consolidation process in 2040, the report said.
By that same year, the reunified Korea's total GDP would amount to $5.48 trillion, while its trade volume would be $3.74 trillion, equivalent to the eighth largest economy in the world.
Based on the report, the ministry plans to draw up a bill containing measures to fund the costs and submit it to the National Assembly for approval later this month.
The report recommended preparing funds in advance through levying a unification tax, and issuing bonds after reunification to spread the cost across generations.
It went on to suggest that 500,000 troops are the optimum size of the military for the unified Korean Peninsula. South Korea has a 680,000-strong military against the North's 1.1 million troops.
hague@yna.co.kr
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