A SCARY SCENARIO
North Korea’s implosion is imminent, South Korea’s absorption of the North will represent a boon to all, and policymakers in Washington and Seoul should start planning for a military intervention to reunify the Korean Peninsula -- at least according to Sue Mi Terry (“A Korea Whole and Free,” July/August 2014). Although the idea that the regime in North Korea stands on the brink of extinction dates back decades, Terry’s insistence that the benefits of collapse will outweigh the costs is novel. Yet her assessment grossly overstates both the feasibility and the desirability of reunification after a sudden regime change.
For starters, the benefits that Terry claims will accrue from reunification rest on dubious assumptions. In the event of regime change in the North, she asserts, South Korea would enjoy major savings up-front by shrinking its defense budget in the absence of the North Korean threat. In fact, defense spending would have to skyrocket at first, due to the costs of stabilizing the North. As with de-Baathification in Iraq after the 2003 U.S. invasion, demobilizing Kim Jong Un’s million-man army would pose a huge cost. And even if the necessary initial outlays subsided, the new Korea’s national security strategy would require increased defense spending to keep up with China’s rise and Japan’s resurgence. Planners in Seoul would be making a serious mistake if they counted on a peace dividend to offset the costs of absorption.
Terry also argues that a reunified Korea would reap economic gains from the combination of the North’s labor and resources and the South’s capital and technology. But the more likely result is systemic dysfunction. As people, goods, and services suddenly flowed freely, the North-South wage gap would close, meaning that labor costs would not fall as low as Terry implies. Once it joined with the South, the impoverished North would automatically enter the Organization for Economic Cooperation and Development and thus forfeit any foreign aid
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