The Chosun Ilbo reports that as the North Korean diaspora swells, those who have escaped are forming stronger financial links with their hungry families in the homeland. And this has some people concerned:
North Korean defectors settled in South Korea are sending some US$10 million a year to their families back home, it was reported on Sunday. The amount is expected to grow as there are more than 20,000 North Korean defectors in the South and the number is increasing, a government intelligence official said. Now the government is investigating what the effects of these growing remittances may be.
After noting the potential positive effects of capitalism spreading in the North, the article finds that this threatens to punch a gaping hole in international sanctions against Kim Jong Il’s regime.
At the same time there are concerns that the increased money wired by defectors back to the North could undermine international sanctions against the communist country. North Korea earned around $300 million a year by selling seafood and sand to South Korea, but all trade was suspended after the sinking of the Navy corvette Cheonan last year. And tours to North Korea’s scenic Mt. Kumgang resort, which generated $500 million in revenues over 10 years, were halted in July 2008.
A South Korean government source said, “We cannot rule out that money is being wired to North Korea by pro-North factions in the South who are aware that it is difficult to crack down on money transfers.”
Uh huh. And just who are these devious agents of Kim Jong Il?
Some 3,000 to 5,000 of 20,000 defectors settled in South Korea are sending W1-5 million (US$1=W1,117) each to their families back home through middlemen every year, the government and defectors’ organizations believe. The North could import about 18,500 tons of Thai rice ($540 per ton) or some 43,000 tons of corn ($230 per ton) for $10 million.
I appreciate that the Chosun adds that necessary context, to which I’ll add some more: the Kaesong Industrial Park is still “pumping $50 million per month into the collapsed North Korean economy.” That’s $600 million a year, every penny of which goes directly to the regime. Maybe I missed where the Chosun Ilbo and the Administration it supports have called for Kaesong to be closed.
If there are concerns, then, about undermining sanctions — not to mention South Korea’s own credibility in calling on other nations to enforce sanctions — that’s where the concern should begin, not crumbs for hungry kids. Why, after all, would Kim Jong Il bother to tap into small-time illegal remittances when he’s raking in $600 million a year, directly from South Korean taxpayers? If South Korea is worried about complying with the spirit and letter of UNSCR 1874, let it close Kaesong. Unless it has reason to suspect that the remittances are being diverted away from starving family members — like with, say, much of our international food aid — it should keep its hand off what North Korean refugees send home.
Also interesting is who isn’t participating in this debate — that is, all of the people who were telling us during the Sunshine years that pouring aid into Kim Jong Il’s bank accounts would change North Korea. Subsequent events have resolved that question. But now we have a kind of engagement that really is transforming North Korea, because it largely circumvents Kim Jong Il and reaches the North Korean people. In that light, shouldn’t South Korea latch onto remittances to help break the economic dependency of the people on the regime, break down the socialist economy, and allow for the financing of alternative institutions and organizations? Remittances could play as important a role in the subversion of the regime as DVD’s, radios, or cell phones. The supply chains for North Korea’s markets are providing most of the other electronic instruments of subversion that are breaking North Korea’s information blockade. This is to say nothing of the humanitarian impact.
If South Korea wants to change North Korea — in exactly the way we were once told that the Sunshine Policy would — it would do everything it could to encourage these remittances. First, it could legalize money transfers to North Korea, provided they’re done through licensed transfer brokers. Licensing would be done at the advisement of the National Intelligence Service, which would help establish a registry of “reliable” money smugglers. Second, it could set up a simple insurance system to protect remitters against financial losses (you know, like it did for Kaesong). Third, it could regulate and monitor transfers to ferret out those that were in fact regime subterfuges, and to ensure (to the extent possible) that the money was sent to recipients who were in legitimate financial need. Establishing cell phone links to North Korea could eventually prove helpful to this verification. In the meantime, if you’re looking for economic inducements to transform North Korea, then find a way around Kim Jong Il. The money smugglers are showing us the way.