The economy dichotomy between the divided nations is striking. South Korea is Asia's fourth (and the world's 11th) largest economy, a leading manufacturer of high-tech products, a global trader that enjoys a first-world infrastructure and a robust democracy.
By contrast, North Korea's Marxist economy is a tiny fraction of the size of its southern neighbor (15 to 30 times smaller, by some estimates). Kim Jong Un rules a country that has suffered famine, depends on China for food and fuel and has poured its limited resources into creating an arsenal of nuclear bombs and intercontinental ballistic missiles. The U.N. estimates 41 percent of the population is undernourished.
Yet despite the North's nuclear tests and the verbal exchanges with President Donald Trump before the sudden turn to dialogue, the South Korean economy has remained remarkably steady. The OECD estimates South Korea will grow at a 3 percent rate through 2019. The Korean stock market index (KOSPI) hit a new high of 2,589.19 in January, even as Trump was declaring that his nuclear button was bigger than Kim's.
"Historically, the South Korean economy has been largely immune to concerns about security from North Korea," said Korea expert Marcus Noland, executive vice president and director of studies at the Peterson Institute for International Economics. After years of bluster and threats, Korean investors tend to disregard the tensions along the border.
More from Global Investing Hot Spots:
The $5 billion South Korean start-up that's an Amazon killer
Trade war with US could tip China's debt-ridden economy
According to the Bank of Korea, South Korea's central bank, North Korea's 2016 GDP in real terms stood at 32.0 trillion won ($28.50 billion), a fraction of South Korea's 1,508.3 trillion won ($1.34 trillion). South Korea's per capita GDP reached $30,000 last year and could surpass Italy in 2018.
Before the latest round of sanctions, the bank estimates North Korea's GDP grew by nearly 4 percent in 2016, after shrinking 1.1 percent from a drought a year earlier. (North Korea does not issue economic figures, so South Korea's central bank bases its estimates from intelligence sources.) Seoul's trade volume also dwarfs Pyongyang's. "The South trades as much in one day as the North in a year," said Noland.
South Korea also has developed a vibrant start-up economy, with several companies, such as Coupang and Yellow Mobile, reaching unicorn status — valued at more than $1 billion. Last year, according to the Korean Venture Capital Association, investors put 2,380.3 billion won ($2.23 billion) into Korean start-ups, up 9.3 percent over 2016.