North Korea collapse could cost $1 trillion

July 13, 2009

This from my Reuters colleague Dean Yates:

South Korean estimates have said it would cost $1 trillion or more to absorb the North. Financial markets in Seoul would plunge given how expensive and messy such a transition could be.

My spin: I am sure the South has watched the German example closely and shuddered.


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The price tag would likely be much higher. However, it doesnt really matter since the overall cost is incalculable. The cited estimate also does not likely include any military events which may occur preceding the collapse. Anyways, there is a greater likelihood that NK refugees would stream north to the undefended Chinese border, than south to the DMZ. Now whether the Chinese would accept the refugees with the same grace as the South is another issue altogether.

Posted by Greg | Report as abusive

We can not estimate the real cost in case of war because it is unpredictable that how it will longer and who will involve. Now a days world’s geopolitical conditions are getting worst and worst and many political forces of world heading toward collision between each others to secure their interests, and influences into other countries to form the union to counter existing political turmoil, like Russia, Latin-America, China, Arabs and Africa, These all regions are challanging the Uni-Polar world on different fronts.
Multi-Polar world order is in formation but how much time it will take is unpredictable, on contrary basis if the US’s efforts may be successful to break this formation most likely the N-Korea’s war cost will minimize significantly.

Posted by Ubaid Ur Rehman | Report as abusive

If there is one thing South Korea needs, its land. If there is one thing that North Korea needs, its a new government.
I don’t think that anyone would disagree that the Korean Peninsula would see far greater benefit from reunification in the long run.

I also think that they underestimate the amount of help they would get from the international community as well.

Posted by Michael | Report as abusive

James is correct about the South drawing grim lessons from the German reunification experience. I recently viewed a documentary on NK in which a SK government adviser said precisely that.

Posted by Mike in NYC | Report as abusive