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North Korea – the next economic powerhouse?

24 0 12

Could the Korean peninsula be the world’s next epicentre of change? Today North Korea has an estimated gross domestic product of US$28 billion, similar in size to Cameroon. And yet, by 2050, it is possible that a more economically integrated Korean peninsula could range in size from US$4 to US$6.4 trillion, with the North accounting for around a quarter of that total.

That would put the Korean peninsula, if measured as a single economy, roughly on par with Japan, Germany and the UK – and trailing only China, the US and India.

To achieve a prize this size, huge unanswered political and security questions would need to be resolved and pretty much everything would have to go right. By 2050, the Korean peninsula would need to experience a 10-percentage-point increase in urbanisation rates and see research and development investment hit up to 6 per cent of GDP.

These outcomes would need to be spurred by an annual growth rate in a more integrated economy of 5 per cent, sustained over three decades. Daunting? Absolutely. Impossible? No. Other countries such as China, Vietnam, India, Ethiopia and Uganda have sustained 6 to 10 per cent annual average growth over the past three decades.

But reaching those stretch goals also requires a bold vision that goes well beyond what many currently suggest is the right path: simply,........

© South China Morning Post