Economy of a united Korea would outperform Japan: Goldman Sachs

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By Lee Youkyung
SEOUL, Sept. 22 (Yonhap) -- A united Korea would see its economy overtake most
G-7 countries by 2050, including Japan, if North Korea's strong growth potential
were well tapped, a Goldman Sachs report said Tuesday.
In a report that urges a reassessment of a unified peninsula's economic
potential, a Goldman Sachs analyst argued that North Korea possesses previously
unrealized resources that could be a significant boon for a joint Korean economy.
"We project that a united Korea could overtake France, Germany and possibly Japan
in 30-40 years in terms of GDP in USD terms, should the growth potential of North
Korea be realized," said the Goldman Sachs analyst Kwon Goohoon, in a report.
North Korea's abundant and competitive labor force, its capacity to create
synergies with South Korean capital and technology, and its productivity
potential are factors that could fuel growth if appropriate reforms and
investments were carried out, according to the U.S. investment bank.
The two Koreas have been separated since shortly after the end of the Japanese
occupation of the Korean Peninsula (1910-1945). Investors in the past have viewed
North Korea as a geopolitical risk, as the two Koreas are technically still at a
war with no peace treaty having been reached after the Korean War. There were
also concerns that heavy reunification costs could pose a massive burden to the
South Korean economy.
But the Goldman Sachs report said such risk factors warrant a reassessment, given
the prospect of a power succession in North Korea and the changing economic
landscape in the region.
ylee@yna.co.kr
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