Inter-Korean phone calls can keep the promises of the Sunshine Policy

Twenty years of state-to-state engagement between North and South Korea have not lived up to Kim Dae-Jung’s promises. Pyongyang has taken Seoul’s money, nuked up, and periodically attacked South Korea for good measure. Rather than reforming, it has invested heavily in sealing its borders. Pyongyang sustains itself on foreign hard currency, even as it cuts off the flow of people, goods, and information to its underprivileged classes. It knows that if it fails to do this, members of those classes will achieve financial, material, and ideological independence from the state.

In their efforts to seal the borders, the North Korean security forces’ principal targets have been the Chinese cell phones whose signals can cross a few miles into North Korea, and which provide North Koreans with their last fragile link to the outside world. Today, there is a real danger that this link will be cut, and that the market-driven changes in North Korean society — changes driven by the people, despite the government’s attempts to suppress them — will cease.

Now, imagine if signals from South Korean cell providers began spreading across the DMZ into North Korea, with steadily expanding ranges. You saw how Pyongyang reacted to loudspeaker propaganda, which reached a few thousand conscripts at best. Imagine the subversive potential of North Koreans being able to call their relatives in the South directly, reading the Daily NK on smart phones, sending photographs or video of local disturbances to Wall Street Journal reporters, or downloading religious pamphlets from South Korean megachurches. Small beginnings like these could be profoundly transformational. If, eventually, North Koreans gain the ability to talk to each other, free of the state’s interference, these beginnings could become the foundations of a new civil society in North Korea. That could vastly mitigate the chaos and cost of reunification.

And yet, Seoul hesitates to allow this kind of people-to-people engagement, ostensibly because it is paralyzed by paranoia that North Korean spies would also use this network.

South Korean police expressed concerns over the national security implications of mobile phone conversations between North Korean defectors in the South and their relatives in the North.

A police official who spoke to South Korean press on the condition of anonymity said the security concerns call for the passage of a law at the National Assembly that could step up surveillance, South Korean outlet Financial News reported on Friday.

Many North Korean defectors who have resettled in the South keep in contact with their families, who are able to circumvent North Korea regulations through the use of Chinese mobile phones. One unidentified woman defector said she calls her family in the North 3 or 4 times a week, to confirm money transfers through a broker based in China. [….]

Police officials in Seoul are saying the conversations between family members can leak sensitive information that can pose a threat to South Korea’s national security, but amendments to Seoul’s Protection of Communications Secrets Act could reduce risks. [UPI]

But given the frequency with which North Korean agents are exposed in the South — just keep scrolling — the Reconnaissance General Bureau, the United Front Department, and their assortment of spies, street thugs, slashers, hackersassassinsagents of influence, and fifth columnists in the South seem to be the only North Koreans who aren’t having trouble with “inter-Korean engagement.”

It’s a silly, short-sighted paranoia that’s tantamount to refusing to treat a disease for fear of the treatment’s side effects. The answer to spies using the phones is called law enforcement. More broadly, if Seoul doesn’t want to deal with North Korean espionage and influence operations in perpetuity, it should open a second front in Kim Jong-Un’s information war, and start running a few information operations of its own. 

One of the most important uses of inter-Korean phone links could be their use for money transfers. Plenty of families in the North rely on those remittances to survive, or to start small businesses that provide for their families. Seoul has been ambivalent about these remittances, too:

South Korea technically bans the transfers, but an official at Seoul’s Ministry of Unification, which handles North Korea policy, says that the government has little incentive to stop the remittances.

“They fall into a gray area,” said the official, requesting anonymity because he was unauthorized to speak about the policy on record. “We always say no money should be sent to North Korea in case it is diverted for military purposes. But in this case, we’re not talking about huge amounts. And it’s for humanitarian purposes. So long as that’s the case, we won’t pursue it.” [WaPo, Chico Harlan, Feb. 2012]

Seoul has even fretted that small-time remittances from North Korean refugees to their families back home might violate international sanctions. Which is an argument that takes a lot of chutzpah, if you contemplate the millions of dollars Seoul pours into Pyongyang through the Kaesong Industrial Park each year.

South-to-North remittances have always been risky and expensive. Remitters charge commissions as high as 30%. Today, with Kim Jong-Un’s information crackdown on illegal calls over the Chinese border, money transfers often require North Korean family members and remitters to risk their lives:

In May this year, a North Korean defector in her 40s took a call from an unknown number at her office in the South Korean capital Seoul.

It was from her brother, who she had not seen for more than a decade, calling illegally from North Korea after tracking her down.

He was speaking from a remote mountainside near the border with China, and was in dire need of money to help treat another sister’s late stage cancer, she said.

Accompanied by a Chinese broker, the brother had spent five hours climbing up the mountain, avoiding North Korean security and desperately searching for a signal on a Chinese mobile telephone. Contact with anyone in the South is punishable by death in North Korea, one of the world’s most isolated states. [Reuters, Ju-Min Park, July 2012]

Defectors objected strongly to a 2011 proposal by Seoul to require licenses for South-to-North remittances. Personally, I’m not sure that a licensing procedure is such a bad idea, if it’s administered efficiently. Licensing can help prevent South Koreans from sending money to government officials — and maybe even spy-handlers — while channeling legitimate remittances through the more honest and reliable remitters.

To ease the burden of the new red tape, Seoul might consider a new way to reduce the cost of a remittance, say, by allowing direct South-to-North transfers that don’t have to run through Chinese banks or Chinese cell phones:

Consortiums led by information technology service giants Kakao Corp. and KT Corp. won a preliminary license to launch South Korea’s first Internet-only bank Sunday, the financial regulator said, opening the new business market in the long-slumping banking industry. [Yonhap]

The online bank will start operation by next June, and will team up with KakaoTalk, which is already gaining popularity with North Koreans because of its anonymity and functionality with weak signals. North Koreans already use Kakao to arrange money transfers from South Korean banks to clandestine North Korean hawaladars.

The FSC said Kakao Bank has an innovative business plan with broader customer lists based on KakaoTalk, which has more than 34 million members.

Kakao is already running mobile payment tools such as KakaoPay and BankWalletKakao.

K-Bank is initiated by KT, the largest fixed-wire operator. Its partners involve No. 1 bank Woori Bank, leading IT solution provider Nautilus Hyosung Inc., GS Retail Co. and Hyundai Securities Co. [Yonhap]

For the last 20 years, South has poured $7 billion in no-questions-asked aid and favorable trade arrangements into Pyongyang’s coffers, blithely unaware of how Pyongyang was spending that money. As far as Seoul knows, Pyongyang used some of that money to nuke up. Yet in the name of “engagement” with Kim Jong-Il, Seoul took bold risks to draw North Korea into the global economy and gradually induce it to disarm and reform. It didn’t work, but the money still flows.

Today, however, Seoul is afraid to take a chance on the kind of people-to-people communications that are changing North Korea profoundly. If those communications become regular and safe, suddenly, they start to sound like the first steps in a plausible plan to keep the Sunshine Policy’s gauzy promises about engagement, change, reform, and reunification.