Challenges to North Korean defectors who send money home

In February 2018 Jessie Kim found out that she had been sending money to a dead man. Ms Kim, now a 27-year-old student in Seoul, fled North Korea for China in 2011. She had been sending her father in Yanggang province in the North around $1,000 a year since she arrived in South Korea in early 2014. Two years later she doubled the contributions, working several part-time jobs, after her aunt told her that her father had been in an accident and needed money for medical bills.

But another call from her aunt last winter, claiming that her father was asking for yet more money, made her suspicious. “He wasn’t the kind of man to ask his daughter for money,” she says. Ms Kim made inquiries through the broker who had facilitated the transactions. She eventually found out that her father had died in the accident in 2016 and that the money had gone to her aunt’s family instead. “I didn’t know my father was dead for two years because my aunt lied to me,” she says. “But I understand why she did it.”

Ms Kim’s case illustrates the pitfalls of supporting relatives in a country that is all but cut off from global communications and financial-services networks. Ordinary North Koreans are not allowed to receive money or even phone calls from abroad. Foreign banks are hesitant to handle any transaction associated with the North, for fear of falling foul of sanctions, intended to curtail its nuclear programme, that have been imposed by America and others.

Yet the relationship between the 30,000-odd North Korean refugees in South Korea and their relatives back home shows that the North is much less closed than at first appears. A growing proportion of those who have settled in the South manage to send money home. In 2018, 62% of refugees surveyed by the Database Center for North Korean Human Rights (NKDB), an NGO in Seoul, said they had transferred funds to relatives or friends in North Korea, up from 50% in 2013. Most respondents say they sent between $500 and $2,000 a year, which was mostly spent on basic living expenses, health and education. The annual total may run into the tens of millions of dollars. The majority of recipients live in North Hamgyeong and Yanggang on the northern border with China, the home provinces of most of those fleeing the North.

That is low compared with remittances from workers sent abroad by the state, which are estimated to be in the hundreds of millions. But it is substantial both relative to North Korean GDP per person, reckoned to be between $1,000 and $2,000 a year, and as a share of income earned by North Koreans in South Korea, who make around $1,300 a month on average.

[The Economist]

This entry was posted in Uncategorized by Grant Montgomery.