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Economy of a united Korea would outperform Japan: Goldman Sachs
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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