ROK to create official reunification fund

According to Yonhap:

South Korea will create an exclusive unification account as part of its efforts to prepare for a future merger with North Korea, Seoul’s point man on Pyongyang said Wednesday.

The government plans to set up the unification account in an inter-Korean cooperation fund that is currently worth about 1 trillion won (US$869 million).

The fund already has a separate account earmarked for inter-Korean projects, according to the Unification Ministry in Seoul, which handles North Korean affairs.

Unification Minister Yu Woo-ik made the announcement during a meeting with South Korean reporters on the last day of his three-day trip to Beijing.

The development underscored Seoul’s longstanding commitment to unifying with North Korea. The envisioned account, which needs parliamentary endorsement, is part of South Korea’s efforts to help cushion the cost of re-unification with one of the poorest countries in the world.

A state-run think tank has estimated that the initial costs for the integration of the two Koreas could range from 55 trillion won (US$47 billion) to 249 trillion won ($216 billion).

The estimate, which is projected to cover the first year of integration, was based on the assumption that the two neighbors could be unified two decades from now, according to the Korea Institute for National Unification.

Yu said the government does not have an immediate plan to levy a tax on citizens to help finance the potential unification, though he left open the possibility of collecting a tax.

South Korea has been working on details of a so-called unification tax since last year when President Lee Myung-bak floated the idea of using taxpayer money to help finance unification.

Seven out of 10 South Koreans believed that the costs of unification would outweigh its benefits, according to a recent telephone survey, in the latest sign of public concern over re-unification’s economic burden.

The National Unification Advisory Council, a presidential advisory body on unification, released the results of last week’s poll of about 1,000 people.

The Korea Herald also reported on this story.

Here are some previous posts on reunification costs:

1. KINU study looks to mineral wealth to cover unification costs

2. DPRK risk ‘biggest drag on Seoul’s credit rating’

3. OECD on Korean unification costs

4. Reunification costs

5. Working through Korean unification blues

6. 3 Million NK Refugees Expected in Crisis: BOK

Read the Yonhap story here:
S. Korea pushes to create independent unification account


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