The two countries occupying the peninsula are the only countries in the world surrounded by the world’s major powers – China, Japan, Russia and the US which is slightly removed geographically, but very present on the territory of South Korea.
South Korea is one of the world’s top 20 economies and home to high-tech companies. The country’s population is the major user of cellphones and internet in the world. North Korea is mired into major problems and famines due to mismanagement by the dynasty that rules it.
The country’s major problems are access to energy and the situation in North Korea, particularly the possibility of a regime collapse leading to massive immigration towards the South. South Korea would be unable to sustain economically a large number of immigrants fleeing the North even if China would be willing to accept part of the flow of refugees such a situation would entail.
The best way to prevent such a collapse is reunification and this appears at this point to be most unlikely.
The two countries are still technically at war with each other. North Korea has a nuclear program, has repeatedly tested its delivery capabilities, has transferred nuclear technology to other countries and engages regularly in provocations.
The South Korean army is believed to be one of the world’s best with a budget of close to USD 30 billion which compares favorably with North Korea’s lower than USD 10 billion. South Korea’s hardware, whether tanks or planes, are recent while that of North Korea dates back to the 1940s, 1950s and 1960s.
While Russia has very recently agreed to conduct joint maneuvers with North Korea, that country’s most important backer is China. Should North Korea escalate its provocations, China might decide to move troops into North Korea and occupy the country risking a wider conflict in which no doubt not only South Korea, but also the US, might be drawn. It would run contrary to China’s present need of the existence of North Korea which is to act as a buffer between itself and the US troops stationed in South Korea.
Another major danger is that skirmishes between the two Koreas escalate and lead to an all-out war.