Here’s the question everybody’s been wondering for the past few days: what would happen if both
North Korea and South Korea merged into a one single nation?
Yes, I know this isn’t something that should happen in the near future.
But it certainly is a
possibility--and one that might happen sooner than we expect.
Just one year ago, nobody would have predicted that now, in spring 2018, Kim Jong-un would
shake hands
with the South Korean president, Moon Jae-in.
So what would a Korean reunification would look like?
The truth is, there is a historical precedent for
all of this.
Yes, my dear viewers, I’m talking about the GERMAN reunification.
As you may remember, Germany used to be divided into two blocs: the Eastern bloc, with a socialist
regime
and the Western bloc, with a capitalist system.
Then the Berlin wall came down and East Germany got absorbed by West Germany.
Since then, the Government
has spent lots of money so that Eastern Germans can enjoy a similar lifestyle to the wealthier
Western
Germans.
Many experts consider this as a success story.
Some of them claim that this could be a model for a
would-be integration of North and South Korea.
Think about it.
In both cases there’s capitalist and socialist section.
In both cases, one of the sides
is poor while the other is much wealthier.
And in both cases, they share a common language, history and
culture.
But now the question is… was the German reunification as successful as it looks on
paper?
Can we say
Eastern Germans today are doing as well as their Western neighbors?
Well, the answer is… no.
Even in soccer, we can see small differences.
Since Germany was reunited there
have been no eastern teams in the Bundesliga since 2009.
The western teams still dominate the national
sport.
The same applies to economics.
But where the differences turn more scary is when we talk about politics.
For example, in the latest election, the radical rightwing AfD has entered the parliament as
the third-
largest party.
This radical, anti-immigrant and Eurosceptic party has gained the majority of its votes
in
the regions of the former East Germany.
This marked the first time since 1961 that a far-right party has had this kind of presence
in parliament.
And that, dear viewers, is frightening.
'Revenge of the East'?
How anger in the former GDR helped the AfD
So, the real question here is: is the process of reunification done?
What can we learn from Germany that
could be applied to North and South Korea?
Today we’re going to answer this question but first, let’s take a look back at history.
TO THE VICTORS GO THE SPOILS After its unconditional surrender, the Allies
divided Germany into four military occupation zones –
Britain in the northwest, France in the southwest, the USA in the south and the Soviet Union
in the east.
There’s so much more to be said about this but we’re not going to go into every little
detail, because if
we did, you’d be staring at my face for a couple of hours!!
… but suffice it to say that from 1949, Germany was transformed into two different
countries: West
Germany, officially known as the Federal Republic of Germany, with Bonn as its capital, and
East Germany,
whose official name was the Democratic Republic of Germany, with its capital in East Berlin.
So East Germany was the communist region while West Germany became the embodiment of its
capitalist
occupants.
While West Berlin started to look more and more like a big city would in the United States,
East Berlin
became Moscow’s carbon copy.
According to East Germany’s first constitution, its citizens enjoyed certain basic rights,
even the right
to strike.
In reality, however, there was little freedom.
All policy-related matters were decided by the Politburo, the executive committee of
the Socialist Unity
Party.
And the main and, almost, the only source of information in the country was directly
financed by
the only party.
Here you can see an example of how ´unbiased´ it was.
New Germany.
Central organ of the socialist unity party.
Celebrating 100 years of Communist Manifesto.
Eastern Germany’s economy, as you may have already guessed, was centrally planned and
almost completely
owned by the state.
The central government set the prices of housing, basic goods and even services.
So, basically, every year the government would publish a list with the mandatory prices of
every basic
good you wanted to buy.
A bread roll?
5 marks, 1000 marks for a Sony Walkman and so on and so forth.
Even if you had the money, there were waiting lists in place for goods like cars and electronics...
would
you like having to wait 10 years for a Trabant car?
Take the unemployment generated by the strict price-control, take all those empty supermarkets,
take the
scarcity of primary basic goods, pair those elements with a low birth rate …aaand what
do you get??
You
get lots and lots of people wanting to escape East Germany.
So, what did the Eastern German government do?
Well.. they.. built a wall to stop people from leaving the
country.
In order to justify this move, the official state propaganda claimed that they would build
the wall to
protect their country from ‘FASCIST infiltration’.
But the actual reason was exactly the opposite.
As you can imagine, what with having a literal wall between them, the relationship between
East and West
Germany was not exactly friendly.
In fact, West Germany didn’t even recognize the Eastern Government because they claimed
to be the only
legitimate state for all Germans.
And the East did the same thing.
Does that remind you of something?
Yes, this is, more or less, the same relationship that the Koreas had
with each other, although in the German case there were no nuclear bombs involved.
And just like North and South Korea are reaching an agreement, East and West Germany normalized
their
relations in the 70’s.
But the real twist in history came in the year 1989.
At the beginning of 1989, almost no one could have anticipated that the 40th anniversary
of the GDR would
also be its last and that Germany would be reunited once more.
But then, history found a way to surprise
us all.
The speed at which these changes occurred was astounding: only ten months after the
fall of the Wall,
East and West Germany would become a one single nation.
''The new Germany is here,'' Secretary of State James A. Baker 3d said.
''Let our legacy be that after 45
years, we finally got the political arithmetic right.
Two plus four adds up to one Germany in a Europe
whole and free.''
But make no mistake, this was not a merger between two countries.
This was a complete absorption.
Basically, on October 3rd, 1990, East Germany disappeared as an independent country and
became part of
West Germany.
And this was definitely a good move.
But, it has some downsides.
REUNITED AT LAST So the two states were one once more, but
not everything was sunshine and rainbows.
While West Germany was extremely wealthy, had high productivity and was very industrialized,
East Germany
was the opposite: the soviet-controlled state had lower productivity, less wealth and a
totally different
political system.
Again, this was a very similar starting point to that of North and South Korea,
although less extreme.
For the process to be successful, the two states needed to somehow find a way to unify
these two
completely different structures.
So what did they do?
Well, basically, West Germany exported all their laws, taxes and regulations to East
Germany.
In exchange, they also took care of all the infrastructure costs: this means that the
Western taxpayers
would pay for the highways, railroads and streets of Eastern Germany.
And I know what you might be thinking now… it sounds fair, right?
If you wanna join your poorer neighbour
to create a bigger country, you have to help them recover.
But… economy is way more complicated than just
pouring money where it’s needed.
Basically, this reunification meant the total collapse of the whole Eastern Economy.
Why?
Well, think
about it!
Having a single country means having a single market, too.
A single market where Western companies were
several times more productive than the Eastern ones.
So, again, Eastern factories could not compete.
For example, East Germany produced the famous TRABANT
car.
Compared with a BMW or an Audi, a Trabant is just a toy.
So the demand for these cars just dropped
by the day.
Many refugees hoping to settle in the west dump their communist built vehicles near the
West Germany
embassy in Prague.
So imagine the situation: you work in a Trabant factory, but the company has to close because
nobody buys
their cars.
Then again, you go to the supermarket and everything you want to buy is produced in
the West
because they have the best factories.
But, then again, everything is more and more expensive because…
Surprise!
All of a sudden, you live in a
rich country with high prices.
And this isn’t the end of the story!
Imagine that you’re an old man in the East and you get a pension
that’s calculated based on the prices during communist times.
But now it’s 1990, and you go to the
supermarket and the bread has a Western price, which is triple… well... you see where I’m
going with
this.
Young people at least could emigrate, and believe me, they did.
But what could the elderly do?
And hold on just a second because on the top of all that we had the currency exchanges!
You see, the two countries had different currencies, with different values.
So, how did they make it
work?
The finance ministers of Eastern and Western Germany met in a room and decided a fixed
exchange
rate between the West German mark and the East German Mark.
The public demanded a one to one exchange and on July 1, 1990 the banks in the former
Eastern Germany
provided people with the unbelievable exchange rate of “1:1” *do quote marks with hands*.
I say this with quote marks because… the theory was one thing, and reality was another.
Most of the banks
would sell you one western mark for 2 eastern ones.
This is an exchange rate of 2 to 1.
And on the black
market, that exchange rate would range anywhere from 8 to 1 to 12 to 1.
So from one day to the next, all the money that you had in your savings would lose more
than half of its
value.
So now you might wonder…
How did the German government manage this situation?
Well, the answer is:
subsidies, subsidies, and more subsidies.
West Germany taxpayers paid medical bills, infrastructure, and was doing everything it
could to prevent
Eastern Germans from migrating.
We’re talking about almost 70 billion US dollars every year since 1990…
That is the equivalent of organizing 4 Olympic games every year.
So I know what you’re wondering now… after almost 30 years… is the reunification process
done?
Can we say
Germany is an equal country?
Well, my dear viewers, the answer is yes… and no.
TOGETHER BUT NOT MIXED According to one study, a good share of Germans
state that they wouldn’t marry somebody from the ‘other’
Germany.
Three Quarters of the German population think there are still different mentalities between
East
and West.
And 10 percent of Eastern Germans have never once travelled to the other side.
And, of course, there are still differences in economic terms, if you look at this chart,
you will see
that, at the time of the reunification the GDP per capita in the East was 9400€, as
opposed to 22000€ in
the West.
Today it’s 27.000 € and 41.000 €. Yes, the differences are more subtle but nobody
can seriously
claim there are no differences.
And, of course, we still have the cultural differences.
A research study by Jacob University in Bremen
measured community spirit considering a number of factors, including trust in institutions
and tolerance
towards the LGBTQ community and ethnic minorities.
All the regions that once made up East Germany
appeared in the bottom half of the index.
And, finally, we have the political differences that we can see in the latest elections.
Eastern Germans
voted for AfD, a far right wing party, and Die Linke, a far left wing party, while Western
Germans chose
more moderate candidates.
This divide in the polls shows how, still to this day, Eastern Germans are
heavily influenced by Russian politics.
This is important because one day, Eastern Germans could hijack
German politics and destroy that sense of German moderation.
Going back to the Korean case, imagine what would happen if North Koreans would kept voting
for communist
parties.
So, all of a sudden, you had a leader like Kim Jong-un making decisions that also affected
the
South Koreans.
Sounds scary, right?
Of course, there are many bright sides to the German reunification.
And, as we’ve mentioned in many of
our videos here at VisualPolitik, Germany is still a model for other countries.
But, as we always say,
not everything is perfect.
And if there has to be a Korean reunification one day, it will not come
without risks.
So now it’s your turn…
Could the Eastern Germans radicalize the political debate in Germany?
Do you still
feel that German reunification should be a model for the Korean peninsula?
Please, leave your answer in
the comment section below.
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