South Korea puts cost of reunification with North Korea at US$500 billion

South Korea's top financial regulator said developing North Korea's moribund economy after eventual reunification would cost around US$500 billion.

Financial Services Commission (FSC) chairman Shin Je-yoon told a seminar in Seoul yesterday that the estimate covered a period of 20 years that would be needed to raise the North's per capita GDP from the current US$1,251 to US$10,000.

The FSC stressed the figure of US$500 billion was open to revision and should not be taken as an official government position, but rather a starting point for discussion.

A survey released by the Unification Ministry earlier this year showed that while 70 per cent of South Koreans supported the idea of a unified peninsula, almost half had no interest in helping cover the massive financial cost.

The FSC estimate noted that the South's GDP was more than 40 times greater than the North's in 2013, compared to the near tenfold difference between West and East Germany at the time of their reunification in 1990.

Shin said half the needed funds could come from public finance institutions in the South such as the Korea Development Bank and Korea Exim Bank.