arrangements of thepast, they now demand payment in hard currencies which North Korea lacks. North Korea usedto import millions of barrels of oil yearly from the former Soviet Union against coal and otherraw materials, but currently it receives only 40,000 barrels producing an energy crunch withserious repercussions for industrial production and living standards. The utilization of industrialcapacities has actually fallen 40%. North Korean leaders seem to be beginning to open up theircountry to Western capital and technology. Most investments so far have come in the form ofjoint venture projects with pro-North Korean residents living in Japan. (Flassbeck, Horn, 1996Chap. 4) Unlike East Germany, a unification of the two Koreas will not entail ready-made accessto new foreign markets for either of the two given the absence of an Asian common market. Protectionism in the United States and Europe-Korea’s main export markets-threatens to erodeKorea’s export base and places South Korea in a vulnerable economic position. To assist anyunification process in the future, the international community ideally would have to be moreaccommodating to Korea in the future. But given the present climate in global tradenegotiations, it is unlikely that a unified Korea would be granted assured access to the EuropeanCommon Market or the United States.The differences between North and South Korea with respect to their industrial base aremuch different from those between East ands West Germany. Unlike East Germany, NorthKorea relies essentially on large supplies of various raw materials most of which were traded ona barter basis with the Soviet Union before its demise. Korean unification may mean thatadditional markets could be tapped for their export. Given North Korea’s limited tradeexposure, any reduction in demand for its products following unification would therefore notpose a problem comparable to that experienced in East German...
