Concern as Remittances to N.Korea Grow

      February 07, 2011 14:11

      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.

      There could be positive effects. A Unification Ministry official said, "As North Korean defectors become better off in South Korea, expectations may rise among North Koreans about life in the South." One defector said people in Chongjin, North Hamgyong Province believe that families of defectors there are better off because some members looked beyond their country and ventured outside its borders.

      In the past, families of defectors were looked down on, but no longer. More and more North Koreans would like to have relatives who fled across the border as they see money flowing in. "The families of North Korean defectors living near the Chinese border bear a close resemblance to Korean Japanese who settled in the North during the 1970s and 80s," one defector said. The Korean Japanese who settled in the North starting in 1959 were looked down on in the 1960s but became objects of envy when they received money from family members in Japan starting in the late 1970s.

      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."

      Also, a growing number of North Korean spies posing as defectors are being caught. But one staffer at a group supporting North Korean defectors said, "Most money transfers by defectors amount to W2 million to W3 million (US$1=W1,117), which are relatively small amounts, and it goes to ordinary North Koreans and not the regime, so there are probably more benefits than negative effects."

      The money is transferred via a chain of middlemen in China and the North. Defectors wire money to bank accounts held by brokers in Dandong or Yanji, China, who charge a 30 percent commission and wire it to North Korean brokers with instructions to deliver it to specific families. Many of these brokers in the North are said to be related to the Chinese middlemen. Once payment is completed, brokers confirm it by phone. Inevitably not all brokers are trustworthy and payments can get lost, especially when large sums are involved.

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