The Korea Institute for International Economic Policy (KIEP) and the Halle Institute for Economic Research (IWH-Halle) in Germany hosted the 5th Korean-German Unification Economic Policy Seminar under the topic of “Economic Cooperation between East and West Germany and Post-Unification Development Policies: Implications for Korea” on December 12th, 2018 at the Westin Chosun Hotel in Seoul.
The seminar was based on a research project to establish the ‘Korean-German Economic Research Network on Unification’, which was initiated by the Korean Ministry of Strategy and Finance and the Federal Ministry of Finance in Germany in 2014. As representative think tanks of the two countries, KIEP and IWH-Halle have conducted joint case studies of the German unification process and economic policies related to unification every year since then, emphasizing the necessity of cooperation between Korea and Germany to establish a peaceful foundation for the unification of the Korean Peninsula.
This year’s event started with the opening remarks of Dr. Chul Chung, Senior Vice President of KIEP, Mr. Byung-ryul Woo, Director of Foreign Economy at the Ministry of Strategy and Finance, and Dr. Stefan Olberman, Federal Minister of Economy and Finance at the Federal Ministry of Finance in Germany.
Dr. Mirko Titze, senior economist of IWH-Halle, presented a study on the German government’s support for East Germany after unification. He analyzed the effects of the improving regional economic structure policy, which provided financial support to the structurally vulnerable areas of the German government. Moreover, in order to clarify the effect of the subsidy program, Dr. Titze suggested that a subsidy evaluation system should be established and the subsidy-related data such as company name, industry, location, and period of subsidy should be digitised.
Dr. Hyung-gon Jeong, senior research fellow of KIEP, made a presentation on the support system of West Germany for East German to activate trade. First, he explained the legal basis for trade in East and West Germany and analyzed the trade in the process of division. He emphasized that the trade between East and West Germany became possible due to strict control measures by the government on trade, commerce and remittance since the very beginning. In order to overcome these limitations, the West German government guaranteed the East German government various preferential benefits such as VAT reduction, tariff exemption, swing loans.
Dr. Matthias Brachert, an economist of IWH-Halle, presented a study of interregional disparities in the process of transition to East Germany. According to Dr. Brahert, it was the first research to analyze the overall employment change in the East German region in both the short and medium term. In conclusion, the socialist legacy seemed to enhance the ability to cope with the structural changes that have taken place since the collapse of the Berlin Wall in the East Germany.
Lastly, Dr. Young-Chan Kim, adjunct professor at the Hankuk University of Foreign Studies, presented his study on policies to support small and medium-sized enterprises (SMEs) in Germany after unification. He examined the current status of successful SMEs (so-called ‘hidden champions’) in the East German region and analyzed the characteristics of the companies and their support measures. Dr. Kim stressed that the total number of the hidden champions in East Germany was significantly lower than in the West because of the government’s support and technology level in East Germany. In conclusion, he stressed it is necessary for North Korean SMEs to provide government support on policy along with the entrepreneurship to become hidden champions and strengthen the regional economy as well.
- Title: The 5th Korean-German Unification Economic Policy Seminar
- Topic: Economic Cooperation between East and West Germany and Post-Unification Development Policies: Implications for Korea
- Date & Time: December 12th, 2018, 9:00-13:00
- Venue: Westin Chosun Hotel (2F, Orchid room), Seoul
- Host: Korea Institute for International Economic Policy (KIEP)
- Contact: Ms. Halin Han, Researcher, International Cooperation for Korean Unification Team (email@example.com)