No, weed is not yet legal in Korea and yes, you heard correctly. Tax-free.
(Image from Abihollow via iamkoream.com)
According to Korea’s top financial regulator, Shin Je-yoon, Chairman of the Financial Services Commission (“FSC”), it will take 20 years and $500 billion USD to satisfactorily integrate North Korea into the south. Now, this won’t be a perfect one-to-one integration mind you, but an attempt to get the north up to a level where it can operate at some workable and complimentary level with the south.
FSC’s blueprint added that the estimated sum would be sufficient to increase North Korea’s gross domestic product (GDP) per capita from last year’s $1,251 to $10,000 in 20 years. North Korea’s current GDP total of $31 billion is equivalent to South Korea’s 1971 GDP and just 2 percent of its GDP from last year.
Okay, if not taxes, then where would all the money come from?
According to Yonhap:
The FSC said state-run policy financing agencies, including the Korea Development Bank (KDB) and Korea Exim Bank, will play a major role in raising the funds, as Germany’s government-owned development bank, or the KfW, did 24 years ago.
The state agencies will take responsibility for up to 60 percent of the total expenses by running development projects in North Korea, while the rest will be raised by collecting overseas development aid (ODA) and private and public investments.
The Hani was a little more detailed:
In order to raise these funds, the government proposes to have public financial institutions find between US$250 billion and US$300 billion, 50% to 60% of the total, and to allow the private sector to invest between US$107.2 billion and US$186.5 billion in special economic zones and projects with guaranteed profitability.
The government also predicts that it can put US$100 billion of the US$330 billion in tax revenues it collects during the economic development of North Korea to use as funds for further development. These figures were calculated using the South Korean tax rate of 26%, under the assumption that North Korea will experience an average of 8% yearly growth during the first decade of development and 10% of yearly growth during the second decade. In addition, the government believes that it can secure US$17 billion of funding through overseas development aid (ODA) from other countries.
I don’t know. Sounds a little voodoo to me and it assumes that people would want to invest in the north and that the north’s population would be stable and productive enough to draw some tax revenue to cover the spread. Still, $250-300 billion is a lot of debt to raise and plunge into the 1960’s era relic that is today’s North Korea.
It must be said that the $500 billion estimate is at an overly optimistic the lower end of a range of assessments. The upper range being $5 trillion.