KOREAN REUNIFICATION: HOW IT MIGHT COME ABOUT AND AT WHAT COST

This paper considers three broad scenarios for Korean reunification. These are reunification through system evolution and adaptation, through collapse and absorption and through conflict. A simulation model is used to estimate the costs of Korean reunification, which span a range between $50 billion and $700 billion, and a median estimate between $330 billion and $350 billion, about $60-70 billion per annum over five years. Various ways of distributing these investment costs are outlined and the likely benefits of reunification are also assessed.