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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