November 19, 2003

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Anybody Got $1.4 Trillion?

From James Brooke’s story about North Korea in today’s New York Times:

“In our view, it’s only a question of time when North Korea collapses because its current economic model is not sustainable,” John Chambers, managing director for sovereign ratings at Standard & Poor’s, told reporters here recently. An S.& P. statement added: “Although some other Asian nations that used to have centrally planned economies have successfully moved to a market-based system, the North Korean leadership probably lacks the flexibility and the vision to undertake such a change.”

Citing North Korea’s nuclear bomb program and its economic backwardness as justification for not raising South Korea’s bond rating, Mr. Chambers said that rebuilding the North could cost the South up to $1.4 trillion, roughly twice the cost of unifying the two Germanies.

Read: “We’re afraid that Kim Jong Il, like Danny the Squirrel, loves the nuts.”

Clearly, the North Korean status quo is not acceptable. I mean, this is a country so oppressive it makes “1984” seem like “Star Trek: The Next Generation.”

But there’s a big question on the other side of a North Korean collapse, which I, er, hadn’t really thought about before I read this article: Who pays?

So I can understand why South Korea is keen to see Kim Jong Il’s regime go out with a soft sigh, like a deflating balloon, and not with a crash, or a bang.

This is one of those situations where the utilitarian calculus is far from clear.

Related: Peter Maass profiled Kim Jong Il recently. And I profiled his profile!