Transcript South Korea

Whether economy will be
better if South Korea and
North Korea unification?
Gui Hongsihan
250764818
Xie Mengcheng
250764714
Jin Yanan
250764817
LI Fengling
250764714
Economy of South Korea
South Korea’s GDP growth from 1960 to 2012
In the 1950s, South
Korea was a very poor
developing country. Its
GDP per capita at end
of Korean War was
less than $800.
however, in less than
40 years, South
Korean’s increased
more than ten times,
to $7235
Endogenous Growth Model
Human capital
Human capital is the key to growth.
Education is an investment in human capital
Technology innovation
South Korean has remarkably achieved high R&D
Science and Technology Policy
Institutions including Government
The government combined a policy of import
with the export-led approach.
substitution
Economy of North Korea
Economy of North Korea
North Korea put emphasis on heavy industry
In the 1970s, North Korea made a large-scale
purchase of turnkey factories from the West upgrade
its technology.
In the 1980s, the North Korea economy stared to show
classic symptoms of a malfunctioning planned
economy.
In the 1990s , North Korea saw stagnation turning
into crisis and in 1994 China reduced it exports to
North Korea
South Korean and North Korean
Population
Year
South
North
1960
25.07
11.42
1970
31.92
14.41
1980
38.12
17.37
1990
42.87
20.19
2000
47.01
22.84
2010
49.41
24.5
Population age
distribution
The Labor Force during 2000
to 2010
South Korean
North Korean
Nature resource
Benefit:
Mineral: >300 mineral resources
largest Graphite and magnetite reserves
7,000 trillion won potential value
Landscape: Choe Sang-hun and Chilbosan
Cost:
Mineral exploitation cost
Scenic construction cost
Benefit:
Territory: save military expenditure
doubled land
6,000 trillion won
Cost:
Land exploitation cost
Benefit:
Landscape: undeveloped spot
Like Baekdu-Mountains,
mount-kumgang and Chilbosan
Cost:
Scenic construction cost
Gas pipeline from Russia to Korea
The gas pipeline: 700km in North Korea + 410km in South Korea
Benefit：
30 years’ stable of natural gas supply.
20% of Korea gas demand: 10 billion cubic meters/year
70%cheaper than shipped LNG（$2.33billion/year）
Avoid 500million transit fee
Cost:
$ 90 billion for 30-year gas purchase
$ 9 billion Industrial supporting costs
$ 3 billion Pipeline costs.
Human resource
Benefit:
increase 24.76million population
3D-worker
Larger customer market
Cost:
Income inequality---Social issue
Welfare cost
=(per capita GDP of South Korea – per capita GDP North
Korea)x North Korea Population
=1.024trillion US dollar
Economics
Benefit：
estimated doubled gdp within 5-6 years
Industrial complementary
Cost
Significant capital investment
Unification tax
Technology Development
South Korea: innovative technology
North Korea: nuclear energy
High-technology exports (% of
manufactured exports)
Country
Name
2004
2005
2006
2007
2008
2009
2010
2011
World
20.89
20.69
20.75
17.53
16.65
18.26
17.69
17.35
Korea, Rep.
32.92
32.48
32.15
30.54
27.60
28.73
29.47
25.72
TIANJIN SAMSUNG ELECTRONICS CO., LTD
(TSEC) is a joint venture enterprise which is
invested by Tianjin communication broadcasting
group and South Korea's Samsung electronics co.,
LTD together.
://www.worldlifeexpectancy.com/north-korea-population-pvramid
Flying Geese Model
supply chain
U.S. ‘s fundamental/scientific technology feeds
Japan’s Industrial technology, which feeds
South Korea’s industry, which depends North
Korea’s assembly lines in factories
Y = F(K, L; T)
Technical innovation shifts the entire production function upwards.
With the unchanged amount of capital, more outputs will be made.
nuclear energy of North Korea
National Sentiment
Park Chung-Hee
(November 1917-26
October 1979), was a
Korean general,
Statesman, and used to be
the third president
of South Korea.
Kim Dae-Jung (3 December
1925---18 August 2009) was the
15th President of the Republic
of Korea from 1998 to 2003,
and the 2000 Nobel Prize
recipient.
Sunshine Policy
Sunshine Policy
Sunshine Policy was the foreign policy
of South Korea towards North Korea.
Divided Korea
The division of Korea into South Korea and North Korea was because
of the 1945 Allied victory in World War II, ending the Empire of Japan’s
35-year colonial rule of Korea. The United States and the Soviet Union
agreed to temporarily occupy the country as a trusteeship with the
zone of control along the 38th parallel. The purpose of this trusteeship
was to establish a Korean provisional government which would
become "free and independent in due course.
Divided Germany
1. Background: Germany divided into two parts which is the result of
defeat in
World War II. The Soviet Union and the United States fight against Germany
from two directions at the same time.
2. Uneven Life Standard:
West Germany has better welfare and high life
standard that aroused public strike for a long time.
The Unification of Germany
Benefits of Unification
◦ Political Benefits
Recovery of Sovereignty
International Political and Economic Importance
One Nation in One State
◦ Economic and Social Benefits
Simplified Institutional Choice in Transformation
Immediate EU Membership
Development of GDP per Capita
Improvement of Infrastructure and Reconstruction of
GDP per Capita of East Germany
Reference
http://www.indexmundi.com/south_korea/age_
structure.html
http://www.worldlifeexpectancy.com/northkorea-population-pyramid
http://en.wikipedia.org/wiki/Main_Page