Time to Shake Some Money-Makers

Recently, I articulated my suspicion that the Eugene Bell Foundation’s plan for family reunions between elderly Korean-Americans and their North Korean relatives would turn out to be just what Kaesong, Kumgang, and just about every other “grand opening” scheme also was: a cash pipeline to the North delivering dubious benefits and incalculable costs — incalculable because we have little or no idea of how Kim Jong Il spends the large sums he extracts from the South. In the case of Kumgang, we have well-founded suspicions that South Korean government subsidies are funding what the CIA and the Congressional Research Service describe as “military purposes.” At Kaesong, we have even less knowledge of where Kim Jong Il spends his cut, or whether the workers’ cut is so de minimis as to qualify as a slave wage. Both projects, particularly Kumgang, have been money-losers for just about everyone but Kim Jong Il.

What all of these projects have in common is that they do almost nothing to open or reform North Korea or make North Korea less of a military threat. They also come with costs beyond their financial expense, costs that are difficult to even calculate because we don’t know how North Korea is spending our money. By “our,” of course, I also mean U.S. taxpayers, who indirectly pay for much of this by subsidizing South Korea’s defense against the same threats its own subsidies to the North help to perpetuate. As I like to repeat at every opportunity, during the Kim Dae Jung and Roh Moo Hyun administrations, those subsidies totalled a whopping $7 billion. The amount of this aid continues to rise geometrically with each passing year, and when the cash-carrying capacities of Kumgang and Kaesong were maxed out, Roh directed his UniFiction Ministers to think of new schemes, and to package them in ways that would make them politically appealing in the South.

Family reunions are tourism are two of the wrappings that still carry relatively more political appeal in the South, and the Roh Administration is blithely plowing ahead with both, just a week before a presidential election, even as the only candidate to have expressed support for such unconditional aid trails in third place at less than 15%. Two of those new schemes are video family reunions and tours of the city of Kaesong, which was part of South Korea before the North invaded in June 1950. In both cases, the North’s profit margin is so staggering that you have to wonder why its people are still starving.  A “nice little earner” is how the Chosun Ilbo describes the video family reunions:

The Unification Ministry reportedly agreed to supply North Korea with all cameras, editing equipment and even vehicles to facilitate the exchange of video letters between families separated by the Korean War, on top of paying the North US$1,000 per video, it emerged Tuesday. The amount is 17 times the average monthly pay ($60) for a North Korean worker in the Kaesong Industrial Complex. [Chosun Ilbo]

Which, as I’ve pointed out, is the “official” figure that doesn’t account for the deduction of “voluntary” payments to the North Korean regime, or the loss of most of the remaining amount from the highly inflated exchange rate between North Korean won and South Korean won. The budget for this program for just this year? Half a million smackers. We can safely presume that if Comrade Chung had his way, that sum would be the thin end of a fat wedge. For extra fun:

A government source said, “I understand that the North at first demanded thousands of dollars per video. It also requested two Rexton SUVs, each of which costs more than W30 million, for the shooting of the videos.”

Hey, have you ever tried loading a complete movie studio into an Atoz, a Tico, or a used Toyota? If your warped imaginations are now imagining what kind of video you could make for that budget during a three-week shoot in Thailand, get your minds out of the gutter. We try to keep a clean house here. Put another way, I have little doubt the North Koreans could subcontract with Al Qaeda for all of their hostage video production needs and still turn a tidy profit. Somewhere in a cave in Afghanistan, someone must be wondering how to adopt this business model. Why should anyone believe that the Bell Foundation’s plan would end up differently? The North Koreans don’t do business on any other terms . . . unless forced to.

Then there are the bus tours up to Kaesong, which just got off to a start that I hope we’ll be able to describe as “abortive” very soon.

The one-day tour of Kaesong costs 180,000 won ($195) per tourist, with North Korea keeping $100 for each person, Hyundai Asan said. [Joongang Ilbo]

Not that anyone still cares, but I’d just like to note for the record that pursuant to Paragraph 9(d) of U.N. Security Council Resolution 1718, approved unanimously just over a year ago,

[A]ll Member States shall . . . ensure that any funds, financial assets or economic resources are prevented from being made available by their nationals or by any persons or entities within their territories, to or for the benefit of . . . [persons or entities designated by the Committee or by the Security Council as being engaged in or providing support for, including through other illicit means, DPRK’s nuclear-related, other weapons of mass destruction-related and ballistic missile-related programmes, or by persons or entities acting on their behalf or at their direction, and such persons or entities;] [here]

Here’s hoping that Lee Myung-Bak will promptly quit squandering the money of his tax-paying voters for schemes like these. To minimally meet his own nation’s interests, that money should only move North when South Korea’s captive citizens can finally come home.