The most fundamental purpose of inter-Korean economic cooperation is to achieve economic growth through peaceful reunification on the Korean Peninsula. However, since two systems, have enormous economic differences due to separation spanning over 75 y...
The most fundamental purpose of inter-Korean economic cooperation is to achieve economic growth through peaceful reunification on the Korean Peninsula. However, since two systems, have enormous economic differences due to separation spanning over 75 years, integration of the two systems will not take place in a short period of time, but will incur considerable time and cost for reunification. Reunification costs consist of costs for systemic transformation, social welfare, economic rehabilitation, transportation network improvement, modernizing the energy industry, housings and education, medical facilities to list a few. Although the basic assumptions and scope, estimation methods, or timing of the cost injection, such as the expansion of medical facilities will vary greatly, this study was designed to limit the discussion on ways to expand the transportation infrastructure to connect the two Koreas and Korean Peninsula.
The two Koreas ‘The Gaesong Industrial Complex’ which was the result of the agreement reached at the first South and North Korea summit in 2000. In 2018, during the third summit, agreement was made which entailed making "Modernizing and Connecting of Gyeong-ui and Dong Hae railway systems and Connecting the Roads,’ the top priority, which was the agreement originally made during the second summit in 2007, but it was not followed through. Therefore, this research will present a systematic strategy for raising funds through studying and analyzing cases of system integration and modification from overseas and eliciting approval from the general public in order to begin a detailed discussion on economic cooperation between the two Koreas.
There is a bond-issue and tax increase carried out by Germany as means of raising funds for reconstruction and expansion of transportation infrastructure which takes into account the needs during reunification and post-unification. Vietnam achieved economic growth through economic reform, and opening the market, and it utilized funds from international financial institutions such as ADB, World Bank, and attracted Foreign Direct Investment (FDI). Germany achieved economic growth by integration of systems of the West and East Germany, and Vietnam promoted the market economy by maintaining a socialist state and introducing a capitalist system. As such, the two countries have established a single system of financing for economic growth. In the case of the Korean Peninsula, it should seek to finance the deployment of transportation infrastructure through economic cooperation while maintaining two different systems. Through the example of the divided Germany utilizing methods of providing funds for unification of political and economic system; through the example of Vietnamese government making an immediate and decisive decision to join the world economy at the onset of restructuring its own government and achieving economic unifications; the Korean Peninsula should seek to draw up a plan to raise funds for establishing a suitable transportation infrastructure. This research also strives to present a strategy for the government to obtain funding from the international community, and to utilize and manage financial resources on its own during the transitional period.