A total of $621.5 billion should be injected to the North Korean economy over the next 20 years to help it catch up with South Korea for economic reunification without any serious impact, a report showed.
According to a report released by state-run Korea Development Bank, capital funding of $621.5 billion needs to be injected into North Korea to raise its current per capita gross domestic product (GDP) of around $650 to the $10,000 level by 2036. It is translated into $31 billion annual funding for 20 years, which amounts to 1.9 percent of South Korea’s real GDP.
What matters is the longer the reconstruction, the more capital will be required to boost its economy. A 10-year reduction will cut the cost to $377.3 billion, but 10-year extension will lead to a rapid increase to $1.094 trillion in total, it said.
North Korea`s GDP per head was at parity with the South in the mid 1970s, and South Korea exceeded the $10,000 threshold after 20 years. The income gap should be reduced for successful reunification of the two Koreas to prevent various social problems, the report explained the reason why the period was set at 20 years.
By Kim Dong-eun and Lee Ha-yeon
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