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| Gerhard Schroder / Yonhap |
"Structural reform will enable South Korea to realize a successful unification," Schroder said during a session at the 10th Jeju Forum, Thursday.
"Considering North Korea's situation now, the unification cost will be enormous. But if one side has a well-established social and economic system, it can help absorb the shock after unification."
The ex-German leader shared his insights on unification methods during the annual forum that attracted about 4,000 attendees.
He said social reform was necessary to lay the ground for the Korean unification, saying, "the earlier, the better."
Schroder was in power from 1998 to 2005, when the nation suffered in the aftermath of unification. During the decade after unification, the national debt doubled, from 500 billion to 1.1 trillion euro.
To revive the debt-laden economy, he came up with the so-called Agenda 21, which featured a flexible labor market, reform of the social welfare system, a decrease in tax rates and deregulation.
But the drastic reform plan caused a huge blow to his power base. His Social Democratic Party lost ground in the 2005 general elections, costing him the position of Chancellor.
His push for structural reform was appreciated only after the German economy got back on track after 2006. The economy grew 2.7 percent, the highest in six years. Unemployment fell from 5 million to 3 million.
"I faced severe criticism not only from labor unions but also from my own party when I pushed for reform," Schroder said. "But leaders should be able to risk their popularity to realize what is necessary for national interests."
He advised the Park administration to take courageous leadership to prepare for unification.
To facilitate the unification process, he said, Seoul needed to put equal importance on relations with the United States and China.
"Successful unification needs support from allies," he said. "With dispersing worries of the allies, the environment for unification can be created."
He cited the so-called German "Two Plus Four Treaty," saying it was pivotal to German reunification. It included approval for the German unification from four nations including the U.S., U.K, France and the Soviet Union, which were victorious in World War II.
"Germany earned the treaty with arduous negotiations with each nation," he said. "For Korean unification, such effort can be a lesson."
