Korean unification may cost South 7% of GDP

SEOUL (REUTERS) - Unification of the two Koreas could cost the South up to 7 per cent of annual GDP for a decade though the South would benefit in various ways such as cheap labour and the North's resources, South Korea's Finance Ministry said on Wednesday.

Korea has been divided since the end of World War Two and the Stalinist North and capitalist South have been fierce rivals since the 1950-53 Korean war.

But both Koreas see themselves as the rightful leaders of the Korean people and while there would appear to be no chance of unification in the immediate future, people in both Koreas harbour that hope.

The Finance Ministry said in a report on mid- to long-term policy-making strategy that if the two Koreas unified within the next eight years, South Korea would likely pay from one to seven per cent of its annual GDP every year for 10 years.