Former German chancellor Gerhard Schroeder speaking at the Jeju Forum called upon Korean politicians to forsake career interests upon reunification. Photo courtesy Jeju Sori

Former German chancellor Gerhard Schroeder called upon Korean politicians to forsake career interests for successful reunification at the Jeju Forum for Peace and Prosperity, May 21.

At Special Session II in the Grand Ballroom of the Haevichi Hotel & Resort, Schroeder said he effectively sacrificed political power to implement essential reforms unpopular at the ballot box.

“There was a consensus of the need for reform, but we still lost the election. Who wants to lose the elections? But if it is a must for the development of the country then you must take it.”

Schroeder was in conversation with former Korean ambassador to China Youngse Kwon as he reminisced on his role in instituting the Agenda 2010 reforms during his time in office.

Despite facing strong opposition, the reforms targeted a flexible labor market, social welfare overhaul, tax cuts and deregulation to kickstart a flailing economy.

Schroeder, in power from 1998 to 2005, saw the effects of his reforms the year after he left office as the economy grew 2.7 percent and unemployment fell from 5 million to 3 million.

Coming more than a decade after reunification, Schroeder urged Koreans not to dither in drawing up their own reforms, adding that politicians must be decisive and take risks.

“Political parties are subordinated to the state. In a democratic state you need to be courageous, but you will be successful in the end,” said the statesman.

SMEs and labor key to reunification
Germany recovered from the shock of reunification to become the strongest economy in Europe, something Schroeder puts down to a strong manufacturing base, dual vocational-standard education system and, crucially, cooperation between organized labor and management.

“Corporations engaged in reform, especially SMEs, the backbone of the German economy, were crucial. Being rooted in local communities and innovative, they were able to improve profitability and competitiveness on the global stage.’”

Suggesting lessons for Korea’s conglomerate-dominated economy, Schroeder emphasized the importance of SME independence from large conglomerates and consultation between workers and managers in decision-making.

“SMEs were standalone from the large conglomerates. That was a very important point. SME competitiveness must be advanced and they must function as standalone entities with workers able to voice their opinions in the decision-making process.”

The former chancellor added massive investment and social welfare equalization was the only way “to stop massive migration" from East to West at the time, something even more important for South Korea in light of North Korea’s “backward” economy.

No changes for now
Schroeder ended the discussion grounded in the geopolitical present, stating that despite the dire human rights situation in the North, he sees no changes on the horizon due to China’s role in propping up Pyongyang.

“China, in the long term, would want the NK regime to continue existing in my personal view, as China sees benefit in the North Korean regime’s existence. So could peaceful reunification get a green light from China? I don’t think so.”