A united Korea could be the 8th largest economy in the world in 2050.
This is a very exciting time for the Korean Peninsula, the world, and for me personally. Since graduating from the School of Oriental and African Studies in the 1990s I have lived between East Asia and the US/Europe, working in investment, venture capital, and now as a Futurist. I have had stints in numerous Asian Cities including Osaka, Tokyo, Hong Kong and Seoul. Now we have a home very close to the Headquarters of the South Korean military! Since marrying a Korean woman I have had special reason to not only endavour to understand the politics and economics of the Korean Peninsula, but also its culture, and perhaps something even more elusive about the Korean spirit which I find facinating.
Regarding North Korea I have long heard why it couldn’t be solved. I think Henry Ford famously said that experts are great for telling you what cannot be done. However, for me clues have been emerging from conversations with ex-diplomats, business people, and NGO volunteers who visited North Korea, as well as my analysis of the wider geopolitical cliamte. When Trump came into office I wondered whether this might actually be the low-hanging fruit for his foreign policy. Of course, a whole group of journalists and friends have been too caught up in the personality of Trump to see the potential. Lets really hope they continue to be wrong!
For three of four years now our base case scenario was that the first steps towards reunification would transpire by the early 2020s. We are actually totally on track.
Tomorrow’s summit could well be a false start. Something could transpire and one side pull out of a deal. I don’t think so, given all the preparation and the fact that the former head of the CIA, Pompeo, has been shuttling between DC and Pyongyang multiple times. But even if it is, I still see that the bigger tectonic shifts will eventually bring the two Koreas together.
Its quite possible that peace on the Korean Peninsula and an opening of the North will make it quite an exciting region for business for many years ahead. Jim Rogers, the Singapore-based investor, seems to concur:
North Korea is now where China was in the 1980s…It’s going to be the most exciting country in the world for the next 20 years. Everything in North Korea is an opportunity.”
By 2050 — perhaps much earlier — a united Korea might be one of the most significant places on the planet. I say ‘place’ as I am not entirely sure how the nationstate will be by then, but thats a separate debate.
With a population of potentially 80 million it is entirely conceivable that a united Korea’s GDP would be in the top 8 globally if not higher by 2050 [if the notion of a nation state then still matters — but that is a separate debate].
People forget the controversial Goldman Sachs report of 2009, looking at this possibility. I don’t. I thought it was entirely conceivable.
Whats quite interesting about a North-South marriage are its complimentary dimensions. Many top strategic minerals for South Korea — bituminous coal, uranium, iron, copper, steel, nickel and many others — are abundant in the North. Some sources suggest that the mineral wealth of the North could be worth $6 trillion! Surely this will make funding reunification easier than many commentators think.
Second, the demographics of the North are much better than the South, which is suffering form a demographic the time bomb. Now demographic decline will probably be mitigated by the 4th industrial revolution and robots, but nonetheless is likely to help the economy.
Third, the cheap labour of the north could be a temporary advantage. Reports from previous experiments in north Korea by South Korean companies have always suggested that they are hard-working with a strong confucian work ethic and are surprisingly educated.
Fourth, South Korea is strong in technology and continues to be involved in the cutting edge areas from biotech to IOT. This year it was ranked again as No 1 in the world for innovation by Bloomberg. Even if I take that survey with a pinch of salt, I think there is some truth to it. I am actually advising one such cutting edge Korean company.
Fifth, a trans Korean rail network could plug into China’s One Belt One Road initiative. Trains could eventually go from Japan through Korea and into China and then all the way to Europe. I interviewed Parag Khanna last year and he states that a nation’s connectivity to the global system is one of its most important assets (his book is called Connectography). This could certainly help Korea.
There will lots of opportunities to potentially invest in North Korea. Apparently Chinese invetosr have already been buying up property in Dandong, the Chinese city neghbouring North Korea.
And of course, much of the success will depend on which model of economic growth they apply. But they will certainly have the advantage of looking at what has happened in China and Vietnam. The North Koreans will have to be careful not to allow over-exploitation of its beautiful country.
Finally, the biggest reason why the Korean civilisation should be reunited is that families and communities were unfairly ripped apart by the Korean war by foreign powers. I think that if the merger is done intelligently, then the South might actually be able to learn a lot of forgotten Korean wisdom and culture from the North. For example I read in a Brookings report how many of the doctors in the North have to spend one month per year foraging for herbs as they have insufficient western pharmaceutical drugs. To me that implies that they probably have retained quite advanced knowledge about ancient Chinese/Korean herbal medicine. I am sure the North Korea is a museum in many ways and there will be many treasures. I am really looking forward to visiting and perhaps many others will want to go in and see this nation, like Bhutan or Cuba. My friend, Roger Shepherd (interviewd here — https://emergingfuture.com/wanderingsofkorea/) has walked more of North Korea than any other foreigner and he says its stunning. If you look at his website you’ll see some of the photography. Another friend of mine introduced surfing in the country to North Korean children! Most of the direct reports I hear are very different from what is said on the news about the nation.
We are only hours away from the historic meeting between a North Korean Leaders and the President of the USA. There is no point speculating on what exact terms will be agreed. And there are some big questoins ahead regarding the future position of the Kim family and denuclearization. I believe these are all surmountable longer term. But at this stage I am fairly sure they have prepared a number of meaningful gestures, and this is the start of a transformation of the Peninsula. I dearly hope so, for the future of my half Korean daughter and all those Koreans who have been divided for 70 years.
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