between the Soviet Union and the West improveddrastically. In Korea, such conditions are non-existent. It will be important for Korea to developgood diplomatic relations with its neighbors, especially China, Japan, the United States and theASEAN countries. It is incumbent upon Korea to foster an international climate conductive toits reunification process, for which it needs the assistance and content of the world community. One particular issue of concern to the world community at large is the nuclear status of NorthKorea and how it will affect the status of a reunified Korea.RecommendationsGenerally, Korea should avoid rushing or getting pressurized into unification. It shouldpreferably be a gradual process under controlled conditions. To that end, it is of utmostimportance to prepare and to be prepared in case a political opportunity arises to unite inwhatever steps and phases. Once the process has started, political decisions must be throughlyinterfaced and coordinated with economic policies and requirements. The transformation of acommand economy calls for a most detailed planning in all areas. One factor of resistance to atransition may be the huge North Korean army, certain to be demobilized and fearful of large-scale unemployment.It is estimated by some economists that South Korea will have to transfer annually 8% ofits GDP to the North for a 10-year period. Under more gradual conditions, some 3% of GDPmay be required. To achieve parity in living standards might take more than 30 years someestimate. (Mosher, 1992). The unification of a country cannot be accomplished in the short andmedium term without weakening the growth base of the economy. South Korean savings willneed to be utilized as it will be a resort to foreign capital. South Koreans must be aware thatduring the transition period their general economic conditions will change. As a result ofunification, there will be an excess demand for capital and an exc...
