Avoiding the Apocalypse: The Future of the Two Koreas / Edition 1

Avoiding the Apocalypse: The Future of the Two Koreas / Edition 1

by Marcus Noland
     
 

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ISBN-10: 0881322784

ISBN-13: 9780881322781

Pub. Date: 01/28/2000

Publisher: Peterson Institute for International Economics

On the Korean peninsula one of the greatest success stories of the postwar era confronts a famine-ridden--and possibly nucleararmed--totalitarian state. The stakes are extraordinarily high for both North and South Korea and for countries such as the United States that have a direct stake in these affairs. This study, the most comprehensive volume to date on the

Overview

On the Korean peninsula one of the greatest success stories of the postwar era confronts a famine-ridden--and possibly nucleararmed--totalitarian state. The stakes are extraordinarily high for both North and South Korea and for countries such as the United States that have a direct stake in these affairs. This study, the most comprehensive volume to date on the subject, examines the current situation in the two Koreas in terms of three major crises: the nuclear confrontation between the United States and North Korea, the North Korean famine, and the South Korean financial crisis. The future of the peninsula is then explored under three alternative scenarios: successful reform in North Korea, collapse and absorption (as happened in Germany), and "muddling through" in which North Korea, supported by foreign powers, makes ad hoc, regime-preserving reforms that fall short of fundamental transformation.

Product Details

ISBN-13:
9780881322781
Publisher:
Peterson Institute for International Economics
Publication date:
01/28/2000
Edition description:
New Edition
Pages:
431
Product dimensions:
5.99(w) x 8.97(h) x 0.83(d)

Table of Contents

Prefacexi
Acknowledgmentsxv
1Introduction1
Divergent Paths3
Three Crises4
Prospects for the Future7
Tour de Horizon11
2The South Korean Economy until 199715
Economic Policy in the 1960s16
Economic Policy in the 1970s19
Economic Policy under President Chun22
The Democracy Pledge and Twenty-five Years of Development24
Pre-Crisis Economic Policy, 1987 to 199729
Conclusions57
3The North Korean Economy59
Organization of the North Korean Economy61
Statistical Comparison of the North and South Korean Economies73
Crisis Response82
International Economic Relations87
Current Reforms133
Conclusions140
4The Nuclear Confrontation143
The Energy Situation143
The Nuclear Program145
The Agreed Framework151
The Suspect Site and the Missile Test158
Evaluation166
5The Slow-Motion Famine in the North171
The Food Balance180
Food for Peace182
The People's Republic of Misery191
6The Financial Crisis in the South195
Financial Frugality199
The Bubble Story203
The Crisis208
Post-Crisis Developments221
Recovery247
Conclusions249
7The Prospect of Successful Reform in the North251
Reform in the North252
A General Equilibrium Perspective on Reform266
The Likelihood of Reform281
8The Implications of North Korean Collapse285
The German Experience286
Relevance to Korea295
A General Equilibrium Perspective on Collapse and Absorption301
Conceptualizing the Costs and Benefits of Unification307
Dynamic Results310
Policy Lessons of the German Experience for South Korea318
Thinking Beyond the German Case320
9Can the North Muddle Through?323
Socialism in One Family324
Muddling Through in Our Own Style333
Sustainability342
10Conclusions347
North Korea348
South Korea352
Other Actors367
Final Thoughts375
References377
Appendix401
Index405
Tables
Table 2.1South Korean tariff rates
Table 2.2Estimate of tariff-equivalents of Korean agricultural NTBs, 1992
Table 2.3Producer subsidy equivalents, 1997
Table 2.4Effective and nominal rates of protection, selected sectors, 1990
Table 3.1North Korea's central plans
Table 3.2Composition of output, 1992-96
Table 3.3Government budget balance
Table 3.4General government revenues, 1996
Table 3.5Socioeconomic indicators, 1992
Table 3.6Educational attainment rates
Table 3.7Distribution of labor force at time of reform
Table 3.8Capital stock and GDP regressions
Table 3.9International income and capital stock comparisons, 1990
Table 3.10Ratio of South Korean to North Korean GDP per capita income, 1990
Table 3.11North Korean trading partners, 1997
Table 3.12aNorth Korean exports by largest commodity groups, 1997
Table 3.12bNorth Korean imports by largest commodity groups, 1997
Table 3.13Aid from the USSR
Table 3.14Aid balance sheet
Table 3.15Estimated remittances
Table 4.1KEDO contributions
Table 5.1Food balance estimates
Table 5.2Rice and corn per capita daily rations
Table 5.3Food for talks
Table 6.1Volatility of macroeconomic indicators and banking aggregates
Table 6.2South Korean banks
Table 7.1Alternative reform scenarios
Table 7.2Actual and "natural" North Korean trade shares, 1990
Table 7.3Prospective sectors of comparative advantage
Table 7.4Prospective sectors of comparative advantage
Table 7.5Prospective sectors of comparative advantage
Table 8.1Western goods penetration
Table 8.2East German relative price
Table 8.3Inter-German and inter-Korean exchange
Table 8.4Estimated costs of unification
Table 9.1Romanian macroeconomic indicators
Figures
Figure 2.1Financial development
Figure 2.2Real interest rates
Figure 2.3Share of GDP due to top 10 chaebol
Figure 2.4Purchasing power adjusted real GDP per capita
Figure 2.5Structure of output
Figure 2.6Exports and imports as a share of nominal GDP
Figure 2.7Unionized workers and labor disputes
Figure 2.8Number of days required for customs clearance of agricultural products
Figure 2.9Foreign direct investment
Figure 3.1Estimates of North Korean GDP
Figure 3.2North Korean trade
Figure 3.3North Koran arms trade
Figure 3.4North Korean debt and debt service - export ratio
Figure 3.5North Korean debt prices in the secondary market
Figure 3.6Number of South Koreans who visited the North
Figure 6.1Saving, investment, and the current account
Figure 6.2Capital inflows by type
Figure 6.3Unit price of electronics and DRAMS
Figure 6.4South Korea's nominal exchange rate and stock market changes
Figure 6.5South Korea's real GDP growth forecast and expected real exchange rate change
Figure 7.1Model simulation results
Figure 7.2Food availability
Figure 7.3Output by sector
Figure 7.4Relative price of output by sector
Figure 7.5Percent change in average factor price
Figure 8.1Capital inflow and exchange rate appreciation
Figure 8.2External capital flow: composition of output change in South Korea
Figure 8.3External capital flow: composition of output change in North Korea
Figure 8.4Rate of convergence and capital investment requirement
Figure 8.5North Korea: GDP and GNP
Figure 8.6South Korea: GDP and GNP
Figure 8.7Factor return equalization
Figure 8.8South Korean distribution of income
Figure 9.1North Korean and Romanian growth rates
Boxes
Box 2.1The Strange Case of Sausages
Box 3.1Juche as Theology
Box 3.2A Tale of Juche Agriculture
Box 3.3Black, Brown, and Blue Won
Box 3.4Deadbeat Debtor
Box 3.5The Narco-state
Box 5.1Crying Wolf?
Box 5.2The Issue of Military Stockpiling
Box 5.3"9/27 Camps"
Box 5.4Refugees
Box 6.1Moral Hazard, the Domestic Dimension
Box 6.2Contagion
Box 6.3Moral Hazard, the International Dimension
Box 6.4Shareholder Activism
Box 6.5The 10-11 Crisis: The Shoe That Didn't Drop

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