North Korean Economy Watch

According ot the DailyNK:

The North Korean authorities are conducting an extensive investigation into the actions of soldiers attached to border guard units, based on the presumption that such guards are frequently guilty of aiding and abetting defection. Those found to have done so are being arrested and severely punished.

A source from Yangkang Province explained the news yesterday, “For the third time they are conducting an investigation along the border in Kim Jong Eun’s name, but this time it is focused on the soldiers.”

“The decree says to arrest and severely punish soldiers who have aided and abetted in defection, to pull out the roots; so the investigation has been harsh from the very beginning.”

The two previous investigations into defection from the border region, both said to have been launched in the name of the successor, happened in February and April this year, as reported by The Daily NK. However, this is the first time that attention has turned away from defectors themselves and towards those soldiers who help facilitate a lot of the escapes.

“There are two members of an investigation team from Defense Security Command going to every guard post, and they are questioning the soldiers one by one,” the source said.

It is well known both within and without North Korea that border guards are commonly bribed to turn a blind eye to defection. Through very serious questioning and the threat of severe punishment, the authorities are presumably hoping to kill two birds with one stone; both hindering further defections and re-instilling military discipline.

However, the new investigation has already inspired at least two guards from one post to desert instead of face censure, according to the source.

“Two men from a guard post in the Hyesin-dong area of Hyesan took their weapons and deserted, so now they are in the middle of a house-to-house investigation,” the source explained, adding, however, “People are saying, ‘They’ve already fled to China, why the hell would they still be in the country?’”

Although nobody knows why the two men chose to desert, the source said he had heard that they were indeed involved in defections, and feared punishment.

Across the Tumen River in Changbai, China, meanwhile, there is also an unusually intense investigation going on, according to sources there. It is suspected that the two events are related.

A source explained, “Public security officers and soldiers are stopping and investigating cars one by one. I heard that soldiers from North Korea deserted with their guns, so maybe it is because of that.”

Of course, the investigation is hurting small traders, too.

“Big-time smugglers are not having problems,” the Yangkang Province source explained. “But day-to-day small scale smugglers are complaining about the investigation. Border guards are telling them to put up with it just a little more.”

Read the full story here:
Border Investigators Turned on Soldiers
Daily NK
Lee Seok-young
2011-6-3

In a May 28th article, the Choson Ilbo reported the DPRK’s National Defense Commission (NDC) is trying to make it harder for women to defect by more stringently enforcing domestic travel restrictions.  According to the article:

The North Korean regime has reportedly ordered border guards to stop all women from traveling on railways and roads to the North Korea-China border. The order, which targets all girls and women between 10 and 60, came recently from the powerful National Defense Commission.

Whether the story is true or not remains to be seen, but the article does highlight the significant gender imbalance among North Korean defectors:

More than 400 defectors arrive in South Korea every month, and about 80 percent of them are women.

There are several reasons given for this lopsided sex ratio.  I have supplemented the list of those items and classified them below:

On the supply side (push factors):

1. Women, as the primary bread-winners in the DPRK’s markets (the place to go for unsanctioned rumors), are exposed to more information about the outside world.

2. The DPRK’s efforts to reign in market activity have made many women despondent.

3. Women, who in many cases do not need to appear at an official job every morning, face lower monitoring costs, and thus have an easier time disappearing.

Demand side (pull factors):

1. Since there is a market for North Korean women in China, smugglers have an economic interest in facilitating defections.

2. It is easier for North Korean women to marry South Korean men than for North Korean men to marry South Korean women.

Of course Haggard and Noland have done systematic surveys of North Korean defectors.  You can learn more here.

UPDATE (2011-5-26): Defectors are not too happy with plans by the South Korean government to get control over remittances to the DPRK.  According to the Korea Herald:

North Korean defectors here are strongly opposing a government plan to require them to gain approval before making remittances to relatives in the cash-strapped state.

They say that the approval process could put them and their loved ones in the North in dangerous situations and make brokers demand more money for delivering funds.

They also say that since their remittances are made through “complicated multi-layered” procedures, it would be difficult to detect those sending money without approval.

On Tuesday, the Unification Ministry put on public notice a revision bill mandating defectors to obtain approval when remitting more than a certain amount of money, with the cut-off figure yet to be set. Officials said the revision is aimed at “securing transparency in inter-Korean exchanges.”

“We have been scrimping on food, clothes and others to send some of the hard-earned money ― at most 1 million won ($917) ― to help our family, not the North Korean regime. The approval system is wrong,” a 43-year-old North Korean defector, who has taken asylum here since 1997, told The Korea Herald, declining to be named.

“Our remittances have been transparently made and we always check whether our relatives have received the money by talking directly to them by cellphone. Through the talks, albeit brief, defectors tell them the truth about Korean society and help enlighten them and bring about change there.”

He also pointed out that the planned system may not be effective.

“All these have so far taken place secretly. Who would ever like to willingly tell the authorities about their remittances at the risk of revealing their identities and those of their relatives in the North? One out of 10 may be willing,” he said.

A Unification Ministry official said that the government will carry out the approval system after taking into account opinions from the defectors and experts.

“There has been controversy over the legitimacy of their remittances, which has stemmed from the absence of government procedures over them. The system is aimed at systemizing their sending of the money to the North,” the official said.

“We will consider various opinions including those regarding the amount of money for which they should secure approval and measures to protect their family in the North.”

North Korean defectors usually send their money through ethnic Chinese people here, who ask their Chinese relatives or acquaintances inside the North or near the North Korea-China border to deliver the money. The brokers are known to take 30 percent of the total remittances.

According to a survey by a private Seoul-based group, which was released early this year, nearly half of North Korean defectors here have sent money to their families in the North.

The survey by the Database Center for North Korean Human Rights found that 49.5 percent said they had sent money to their families in the North, while 46 percent said they had not and 4.5 percent said that they have no family there.

The survey was conducted on 396 North Korean defectors residing in the South, aged 15 or older, from Dec. 14-31 last year.

Seoul officials estimate that North Korean defectors’ annual remittances amount to $10 million.

Some people say the remittances could stimulate North Koreans’ longing for the affluent life south of the heavily fortified border. Others, however, are concerned that the money could get into the wrong hands in the notoriously autocratic regime.

The number of North Korean defectors living here stands at 21,294 as of April. It is expected to rise as food shortages and oppression continue in the reclusive state.

And according to Yonhap:

The Unification Ministry has announced its plans to revise a law that would require defectors to receive government approval before sending money to their families.

The ministry, which handles inter-Korean affairs, said the move is aimed at legalizing the money transfers and increasing their transparency.

Defectors said their families in the North usually receive some 70 percent of their remittances as brokers who arrange the deals take some 30 percent of the money as a fee.

The ministry said it would give some wiggle room for defectors by exempting them from receiving mandatory approval in case they remit a certain amount of money for their families to support them or to help them seek medical treatment.

Details have yet to be arranged. The revision process would take months as other government ministries must screen any changes before the new law’s submission to the legislature for approval.

The new revision is expected to take effect as early as the second half of next year.

The move “is not trying to regulate humanitarian money remittance,” a government official said on condition of anonymity, citing office policy.

Still, the proposed move triggered a backlash from defectors, who fear that the government regulation could complicate the process of money remittance and jeopardize their families in the North.

“I have no choice but to give money to family members in the North as they live on the money I send to them, but I cannot give any information to the government,” a defector said, asking not to be identified, citing security concerns for family members in the North.

ORIGINAL POST (2011-5-23): According to the Korea Herald:

South Koreans who wish to send money to their families in North Korea will be required to get government approval in advance under a revised law, Seoul’s Unification Ministry said Monday.

All remittances between the South and North, including investments or aid to the North from an overseas corporation set up by a South Korean citizen, will require government approval, according to the revised law on inter-Korean exchange and cooperation, aimed at increasing transparency of the cross-border exchanges.

So far, only payments for commercial transactions were subject to obtain government permission in advance, raising concerns that it was hard to track other kinds of cash flow into North Korea.

North Korean defectors who have settled in the South or members of families separated by the border after the 1950-53 Korean War have occasionally remitted money to their kin in the impoverished North through bank accounts in third countries such as China.

But under the new law taking effect in the second half of this year, South Koreans are obliged to get government approval before sending or passing on inheritance to their family in the North. There will be exceptions, however, for remittances of small amounts for basic living costs or medical costs of their kin in the North.

If a corporation established by a South Korean citizen in a third country plans to invest in the North, the South Korean proprietor will now have to report to the Seoul government in advance.

South Koreans planning to send goods purchased in third countries to the North will also have to attain government permission.

A South Korean Christian aid group recently sent flour, bought in China through a Chinese nongovernmental organization called Amity Foundation, to North Korea.

South Korean companies trading with entities in the North will also be required to register, under the new law.

“Between 700 and 800 companies are believed to have records of trade with the North so far, but only 580 have been confirmed so far in a survey conducted after the May 25 regulation (on inter-Korean exchanges) last year,” a ministry official said.

“The others have either stopped doing business in the North or have gone out of contact, making it hard for the government to keep track.”

The ministry plans to set up a state-funded agency to support inter-Korean nongovernmental exchanges at all times.

So far, the ministry has allocated financial aid to support inter-Korean exchange to selected non-profit organizations once or twice a year.

Previous reports indicated that the level of remittances from the ROK to the DPRK can reach USD$10m per year.

Read the full story here:
Seoul tightens rules on cash flow to North Korea
Korea Herald
Kim So-hyun
2011-5-23

According to Yonhap:

A Seoul appeals court ruled Thursday the South Korean government should pay 120 million won (US$110,000) to a North Korean defector over an identity leak case that he claimed led to the disappearance of his 22 relatives in the North.

The Seoul High Court said the government claimed media reports on defection were intended to satisfy the people’s right to know, but the need to accept the defector’s request for confidentiality takes precedence over the people’s right to know or the freedom of press.

Lee Kwang-su, 42, sailed into South Korean waters along with his wife, two children and a friend aboard a small barge in 2006. He claimed he had initially planned to go to Japan and seek political asylum at the U.S. embassy there.

Lee currently lives in California after he won asylum in the United States in 2008.

He has said South Korean investigators released his identity as well as that of four others to media despite his request for confidentiality for fear of retaliation against their relatives in North Korea.

North Korean defectors in the South claim that North Korea harshly punishes relatives of defectors and sends them to prisons.

Lee believed his relatives were sent to a political prison camp, though it is nearly impossible to independently verify the claims due to lack of free access to the isolated country.

The ruling raised the amount of compensation to Lee, who was awarded 55 million won in a lower court in October. He had demanded 1.15 billion won when he filed a suit against the South Korean government in 2008.

Lee said he will consult with his lawyer before deciding whether or not appeal the ruling.

“I cannot expect justice will be served even if I appeal to the Supreme Court,” Lee said after the ruling, adding he plans to sue the South Korean government in a U.S. court. He did not give a specific time frame.

South Korean prosecutors were not immediately available for comment.

Read the full story here:
Appeals court orders S. Korean gov’t to pay W120 mln to defector
Yonhap
2011-5-19

According to the Joong Ang Daily:

The United States has received 101 North Korean refugees in the past few years under legislation to help improve human rights conditions in the reclusive state, statistics showed Saturday.

The total breaks down to nine for 2006, 22 for 2007, 37 for 2008, 25 for 2009 and eight for 2010, according to figures released Saturday by the Office of Immigration Statistics at the Department of Homeland Security.

Hundreds of thousands of North Korean refugees are also believed to be in China.

Most North Korean refugees, fleeing poverty, aim to make their way to South Korea via neighboring China.

South Korea has received more than 20,000 North Korean defectors since the 1950-1953 Korean War.

China has come under criticism for repatriating North Korean refugees under a secret agreement with North Korea, categorizing defectors as economic immigrants rather than refugees, despite the danger of them being persecuted back home.

The North Korean refugees were admitted into the U.S. under the North Korean Human Rights Act of 2004, which calls for the provision of financial aid to help improve North Korea’s human rights and accept North Korean defectors into the U.S.

In 2008, Congress approved the North Korean Human Rights Reauthorization Act for another four years, calling for “activities to support human rights and democracy and freedom of information in North Korea,” as well as “assistance to North Koreans who are outside North Korea,” and 12-hour daily broadcasting to North Korea.

The 201 Office of Immigration Statistics Annual Flow Report also showed that 73,293 people were admitted to the U.S. as refugees in 2010.

The leading countries of nationality were Iraq (18,016), Burma (16,693) and Bhutan (12,363).


Read the full story here:
U.S. takes 101 North Korean refugees
Joong Ang Daily
2011-5-9

According to the Bangkok Post:

Thai authorities have rejected South Korea’s proposal to build a coordination centre to deal with North Koreans illegally entering the country over concerns that it might encourage more inflows of migrants from the communist nation.

South Korea reportedly asked the government early this year to build the centre in Chiang Rai province, a popular entry point for illegal North Korean immigrants into Thailand.

Most of the immigrants have escaped economic hardship in North Korea and travelled to Thailand for temporary refuge in the hope of being able to resettle in third countries, usually South Korea, a source at the Internal Security Operations Command (Isoc) said.

From October last year until April this year, 899 North Koreans were arrested for illegal entry, said Isoc spokesman Maj Gen Dithaporn Sasamit. The source said South Korea had offered to pay to take care of the illegal migrants. However, the government had turned down the proposal because it had no policy to open a new refugee centre.

The South Korean government has played an important role in helping North Koreans by allowing them to resettle in its country.

Pol Maj Gen Phansak Kasemasanta, deputy chief of the Immigration Bureau, said that North Koreans illegally entering Thailand would be arrested.

After being tried in court, the immigrants would be detained at the Immigration Bureau while awaiting deportation.

The immigrants normally protest at being sent back to North Korea, allowing South Korean officials to step in and help, Pol Maj Gen Phansak said.

He added that instead of building a new centre for the North Korean migrants, South Korea could help improve the present detention centre at the Immigration Bureau.

North Koreans could stay there along with other illegal immigrants from other nations, he said.

According to the Isoc and the Immigration Bureau, North Koreans are normally helped by human trafficking gangs to travel to China.

They are then put on board Chinese cargo boats to Laos before boarding smaller boats or travelling on foot to Chiang Rai’s Chiang Saen and Chiang Khong districts.

“The trips are arranged by gangs made up of North Korean, Chinese and Thai nationals,” said Maj Gen Thawip Bunma, a senior Isoc official.

The Isoc and the Immigration Bureau have been tracking down people involved in the human trafficking gangs.

However, Pol Maj Gen Phansak said police still have no evidence to confirm that Thais were involved.North Korean migrants who have been arrested have told officials that they had to pay at least 100,000 baht to the gangs to help arrange their trips to Thailand.

Most of the migrants were willing to turn themselves in to Thai authorities, seeing it as the first step for them to travel on to the third countries they ultimately wish to settle in.

Read the full story here:
Illegal North Korean migrants on rise
Bangkok Post
2011-5-6

According to the AFP via Straits Times:

Two female refugees from North Korea have been arrested in South Korea for allegedly forcing fellow fugitives into prostitution while they were in China, police said on Tuesday.

The case is a rare attempt to punish refugees for crimes in China, where many women who have fled the North are sexually exploited.

Police said that over a two-year period the pair acquired 70-80 North Korean women fresh from their impoverished homeland, about half of them from Chinese brokers.

They paid the brokers about 3.6 million South Korean won (S$4,166) for each woman. The pair allegedly forced the women into prostitution in night-time establishments they operated in the north-eastern Chinese city of Qingdao between 2007 and 2009.

The two, now aged 30 and 40, left China for South Korea in 2009. Seoul police launched an investigation following complaints from some of the victims who had managed to escape to the South, said Mr Park Chu Ung, a police officer in charge of the investigation.

Two ethnic Korean Chinese living in the South were also arrested for working with the pair in China. Police also suspect that another North Korean refugee in China and a South Korean who lives overseas acted as accomplices.

Read the full story here:
N.Korean refugees accused over China sex trade
AFP via Straits Times
4/12/2011

According to the AFP via the Straits Times:

North Korea has tightened security along parts of its border with China as part of a growing effort to clamp down on a stream of refugees, a Seoul radio station which broadcasts to the North said on Monday.

Open Radio For North Korea said the communist state last week started laying tripwires which send flares into the air when triggered.

The devices make it easier for border patrols to catch those trying to flee their impoverished homeland, it said, citing a source in the northeastern border city of Hoeryong.

‘The authorities are planning to install the devices eventually along most border areas commonly used for defection and smuggling by North Koreans,’ its source said.

A few days ago we reported how the Chinese are boosting border security as well.

Read teh full story here:
N.Korea boosts security on China border
AFP via Straits Times
4/11/2011

USA Today published a story on the ROK’s transition program for DPRK defectors, Hanawon (하나원).  There is not much new information in the story, but I wanted to address some of the criticisms the program receives.

Here is the most salient part of the article:

North Koreans who’ve gone through the program say it is helpful but not enough to prepare one for a Western-oriented society after a life in a Stalinist dictatorship cut off from the outside world.

Gwang Il Jung, who attended the program six years ago and runs an advocacy group, Free NK Gulag, says the courses have good intentions but gloss over too many details.

“They will tell you the basics,” he says. “But what can you really learn in three months? How do you teach someone to use an ATM or ride the metro in a classroom setting? The classes need to be more hands-on.”

He says the requirement that North Koreans remain on the school grounds for three months is unhelpful.

“They just got here in pursuit of freedom. And they’re locked in again. It’s like prison for them. All they think about is getting out. Let them live. They’ll make their share of mistakes, but many are eager and able to learn,” Jung says.

The two Koreas share a common heritage and language, but much has changed since the two countries were divided in 1948 after the United States and the Soviet Union agreed to temporarily occupy the country as a trusteeship following the Allied victory in World War II.

The students must complete 130 hours of language courses to get a better grasp of the Southern dialect that has been infiltrated by English and other foreign vocabulary, such as the words “Internet” and “computer,” “chicken” and “phone.”

“They may find a job as a waitress, but if they can’t take orders or understand a command like ‘Go get that key from the cabinet,’ it’s just a matter of time before they’re fired,” Youn says.

Personal finance courses, ranging from basic money management skills to the concept of private property ownership, are also mandatory, as many North Koreans are ill-equipped to handle the sudden exposure to welfare and settlement payments the South Korean government provides.

Stories of defectors falling victim to financial scams or bouts of compulsive shopping are common.

Students take lessons on using computers, child-rearing skills and even hairdressing.

First of all, there is no program that is going to suitably address the individual needs of all the defectors that enter the ROK. Individual capacities, experiences, and needs are simply to heterogeneous for a single government program to address.  This diversity of needs, however, presents a market opportunity for non-profits and education entrepreneurs.   Indeed I can think of  a few organizations that offer “continuing education” to former North Koreans as they adjust to life in their new homes.   So Hanawon should not be criticized for failing to meet all needs of all defectors, it should be seen as simply the first step.

Hanawon also draws criticism in the article for keeping North Korean defectors isolated on campus for three months.  This criticism stems from the fact that Hanawon serves more than one mission.  The first mission is to facilitate the transition of North Korean defectors to their new lives in the south.  The second mission is to facilitate the gathering of information on the DPRK and to protect South Korea (and the North Korean defector community) from infiltration by North Korean agents.  There are now 20,000+ North Korean defectors in the South and some +% of them are active agents.  Given the potentially high and visible cost of failing to catch a North Korean agent, South Korean policymakers have a bias toward preventing type 1 errors (allowing DPRK agents to enter the country).  They try to reduce this cost by extending the amount of time defectors spend under scrutiny while confined at Hanawon.  However, this produces a type 2 error: the unnecessary “holding” of innocent DPRK defectors who just want to get on with their lives.  These particular individuals (the vast majority) have every right to feel “mistreated” by this system, but the only politically feasible way to minimize this cost is to improve the ability of the South Korean security services to detect North Korean agents–something few people are able to do anything about.

It is also worth pointing out that there are quite a few North Koreans that don’t go through Hanawon when they come to the South.  I wonder why that is?

Previous posts on Hanawon here.  Previous posts on North Korean defectors here.

You can read the full USA Today story here.

According to the Rumsfeld Papers there were 69  North Koreans serving active duty in the US armed services in April 2003.

Source here (PDF).

Much more discussion in the comments.

(h/t to a colleague)