North Korean Economy Watch

According to TradingMarkets.com:

Top South Korean steelmaker POSCO pledged Thursday to provide more jobs to North Korean defectors struggling to settle in their newfound capitalist homeland.

Under a memorandum of understanding (MOU) signed with the Unification Ministry, POSCO promised to hire more defectors at its “social enterprise” subsidiaries set up in part to help the underprivileged.

POSCO’s Songdo SE, one such firm, now employees 105 people from the needy classes of society, including 35 defectors from North Korea, and plans to increase the number of defector employees to 50 by next year.

The firm is in charge of building maintenance for POSCO Engineering & Construction’s new headquarters and POSCO Global R&D Center located in Songdo Free Economic Zone in the western port city of Incheon.

“What is most important for North Korean defectors is to help them to stand on their own economically,” Unification Minister Hyun In-taek said in a speech at the MOU signing ceremony attended by some 200 people, including the 35 defectors employed at Songdo SE and POSCO CEO Chung Joon-yang.

Chung said that Songdo SE will put priority on hiring North Korean defectors living in Incheon.

Since the 1950-53 Korean War, nearly 20,000 North Koreans have defected to the South to escape from hunger and political suppression in their communist homeland. But many of them have a hard time getting decent jobs due to their lack of South Korean-style education and social discrimination.

Read the full story here:
POSCO pledges to provide more jobs to North Korean defectors
TradingMarkets.com
11/9/2010

According to Radio Free Asia:

He said he has already received a Social Security Card, and in August 2011 will likely receive his green card allowing him status as a permanent resident of the United States.

But while he is excited about the opportunities he sees in America, Jo said his new life is not without its challenges.

“If there’s one thing that’s inconvenient here, that is the language barrier. I feel that I can hardly get a grip on everything I’m doing, including studying English,” he said.

“Time just flies by, and time is so precious… However, I finally feel at home —- free.”

The North Korean Human Rights Act, which allows the U.S. government to receive North Korean refugees, was signed into U.S. law by former President George W. Bush on Oct. 18, 2004.

It also allows the U.S. government to provide humanitarian assistance to North Koreans inside North Korea and provide grants to non-profit organizations which seek to promote human rights, democracy, rule of law, and the development of a market economy in the country.

The act also allows efforts to increase information flow inside North Korea and to provide humanitarian or legal assistance to North Koreans who have fled their nuclear-armed country.

The U.S. accepted a group of six North Korean refugees for the first time since the act was signed into law on May 5, 2006.

Read all about the defector here.

According to the Yomiuri Shimbun:

North Korean defectors appear to be traveling to [Japan] from South Korea to earn an income in the adult entertainment industry, with a series of arrests having been made in connection with two adult businesses in Ueno, Tokyo.

A woman who defected from North Korean was deported from Japan to South Korea in mid-October after being convicted of illegally operating an adult salon in Ueno, according to Metropolitan Police Department sources.

The woman fled North Korea for South Korea in July 2004, but she came to Japan in April 2006 after experiencing financial difficulties in South Korea.

She opened the adult salon in January last year, and was arrested in May this year, the police said.

According to MPD sources, the woman sent part of her earnings from the shop to North Korea.

Nine other defectors from North Korea, all women, have also been arrested, the MPD said.

One, a massage parlor manager in her 40s, is an acquaintance of the deported woman. Investigative sources said she was arrested Oct. 4 on suspicion of violating the Adult Entertainment Businesses Law by operating the parlor in an area of Ueno where such businesses are prohibited.

The other eight women worked at the two Ueno businesses, and were arrested on suspicion of breaking the Immigration Control and Refugee Recognition Law by working in violation of their visa status.

After defecting from North Korea, all 10 women entered a facility in South Korea that helps defectors settle in that nation, and all obtained status as South Korean nationals, according to the police.

However, the women found it hard to find work in South Korea. One was quoted by the police as saying: “We defected from North Korea because our lives there were difficult, but our lives didn’t improve in South Korea. In Japan, we earned a lot, partly thanks to the strong yen.”

The deported woman made profits of about 35 million yen at her salon between its opening and April this year. The woman said she had sent part of the income to relatives in North Korea, according to the police.

The MPD believes word that good money can be made by starting an adult entertainment business in Japan has been spreading among North Korean defectors.

The arrested massage parlor manager, meanwhile, is rumored to have once been a member of North Korea’s secret police, the MPD said.

The MPD intends to thoroughly investigate the woman, who comes from a northern region of North Korea and visited Japan a few years ago, by exchanging information with South Korean police.

The majority of North Korean defectors seek asylum in South Korea after fleeing the country, often by crossing the Tumen River that runs along the North Korea-China border.

According to South Korea’s Unification Ministry, about 20,000 North Korean defectors currently live in South Korea.

However, many cannot assimilate to life in South Korea. Defectors’ employment rate is about 70 percent of that of the general public.

The Japanese government has accepted as North Korean defectors about 200 Korean-Japanese and their families who went to North Korea on its “return to the homeland” project, which began in 1959.

Most North Korean defectors were born and raised in North Korea, however.

Thought the exact number is not known, it is believed many North Korean defectors have visited Japan as South Koreans after obtaining South Korean nationality.

Also in the Korea Times:

Two pimps were arrested for trafficking female North Korean refugees in Japan and forcing them to engage in prostitution there, police said Friday. Police also arrested 13 female North Korean defectors for selling sex in red-light districts in Tokyo.

According to the Seoul Metropolitan Police Agency, the arrested female pimps, surnamed Tak and Lee, ran a massage parlor in Ueno since November 2008. The two are also North Korean defectors to the South.

The women defectors were forced to sell sex for 6,000 to 10,000 yen per hour, it said. The pimps racked up more than 1.1 billion won in illegal gains.

Investigators said they coaxed jobless female defectors here with the promise that they could make more than 15 million won a month in Japan.

Some of the trafficked women said during questioning they engaged in the illegal business to cover fees needed to take their family members still in the North out of the poverty-stricken state.

“This was the first case to catch a group of prostitutes and pimps, all of whom are North Korean,” a police officer said.

A growing number of female defectors leave for Japan voluntarily in recent years to enter into the sex industry there, a desperate move to escape from financial hardship in the South, the officer said.

Read the full stories here:
N. Korea defectors in vice busts / Arrested women drawn to Japan by earning potential in adult industry
Daily Yomuri
10/24/2010

North Korean defectors caught selling sex in Japan
Korea Times
Park Si-soo
10/22/2010

According to Yonhap:

Prosecutors said Friday they have arrested three people suspected of trying to defect to North Korea, allegedly disgruntled with South Korean society.

A medical doctor, identified only by his surname Shin, and two others are charged with attempting entry into the communist state via China last February, prosecutors said.

Seoul judges issued arrest warrants, citing that the suspects are feared to try to flee and destroy evidence.

The three returned to South Korea after failing to cross into the North, despite receiving help from an acquaintance in Sweden.

They met through an online pro-North Korea community and were quoted as having attempted defection because they were “sick of (South) Korean society,” prosecutors said.

Prosecutors have not found evidence of other parties’ involvement in the defection attempt, but are probing indications that the three had contact with the North during their stay in China.

Read the full story here:
Three suspected of attempting defection to N. Korea
Yonhap
10/22/2010

According to KBS:

Japan’s State Secretary for Foreign Affairs Takeaki Matsumoto says there are more than 100 North Korean escapees in Japan.

Matsumoto made the assessment on Thursday in response to a question posed by Democratic Party of Japan legislator Yosihu Arita during a meeting of a special House of Councillors committee on Japanese abductees.

Arita said a dozen North Korean escapees are under the protection of Japan’s diplomatic mission in China. He said there are reports that some of the escapees have been unable to leave China for nearly two years and urged the Japanese government to promptly address the matter.

In response, Foreign Minister Seiji Maehara said Tokyo will seek the early departure of the escapees in line with the interests of related countries.

Read the full story here:
‘More than 100 NK Escapees Have Entered Japan’
KBS
10/21/2010

According to the AFP:

North Korean refugees struggling to adapt to a bewildering new life in South Korea are increasingly getting sucked into insurance frauds as their first taste of capitalism.

Insurance scams have for years been common in the South, and fraudsters in recent years have targeted the refugees as sometimes unwitting accomplices.

“Sometimes defectors get involved because they don’t know how the insurance system works. They just have no idea what they are doing is wrong,” an official at the Hanawon resettlement centre told AFP.

All North Koreans who flee their impoverished communist homeland for the South must spend their first 12 weeks at the centre, which lies about 80 kilometres (50 miles) south of Seoul.

It offers job education, information on South Korea and basic survival skills — such as buying a subway ticket, opening a bank account and using a credit card.

From May it has also offered a new two-hour course on insurance fraud, with investigators from the Financial Supervisory Service (FSS) warning about the possible consequences.

“We expect that through education, defectors will think twice before making a decision to become an accessory to fraud,” the official, who supervises the course, told AFP on condition of anonymity.

Newly arrived refugees get government financial help but often must repay big debts to the brokers who arranged their escape via China.

This makes them susceptible to taking part in frauds, which focus on bogus medical insurance claims.

After the refugee has bought a private policy or enrols in a state scheme, or both, insurance company workers typically conspire with hospital administrative staff to issue fake certificates of treatment.

When a refugee has been reimbursed by the insurance company, and sometimes by the government, he or she hands over a portion to the accomplices.

“I received about three million won (2,700 dollars) and used the money to pay debts when I came to South Korea,” one woman in her late thirties told the JoongAng Daily newspaper.

Police in Gyeonggi province surrounding Seoul, a known centre for the scams, said that over the past five years ending March refugees received a total of 3.1 billion won from 31 insurance companies in bogus claims.

“It’s prevalent and we are constantly investigating to catch them,” said a provincial police investigator.

The watchdog FSS says refugees typically send 30 percent of their takings from the frauds to brokers in China and the rest to family still in the North.

In one case in 2008, police said they had charged 41 refugees accused of receiving a total of 420 million won through bogus medical claims.

“Insurance fraud has become almost the common thing to do among defectors after they come to South Korea,” Chun Ki-Won, a priest who helps the refugees, told AFP.

“The primary reason why insurance fraud is rapidly increasing is because it’s becoming harder for defectors to adapt to a new environment.”

Refugees find it harder than their southern-born counterparts to find well-paid jobs and some complain of discrimination.

In a survey conducted by legislator Kim Young-Woo, 66 percent of refugees described their living conditions as difficult.

Some 56 percent said their monthly income is below 500,000 won (450 dollars) — officially deemed to be the lowest sum on which families can manage.

About 17,000 North Korean defectors have gone through the Hanawon centre since it opened 11 years ago, and it is currently holding about 500 people.

Read the full story here:
Insurance fraudsters target North Korean refugees
AFP
10/17/2010

According to the Donga Ilbo:

More than half of North Korean defectors living in South Korea say they earn under 500,000 won (440 U.S. dollars) per month and suffer hiring discrimination, the results of a survey released Thursday said.

A combined 222 defectors nationwide were surveyed Sept. 15-30 and the study’s results were given to ruling Grand National Party lawmaker Kim Young-woo.

Of the respondents, 76 percent were women in their 20s to 40s. The gender and age ratios were similar to those of the estimated 20,000 defectors in the country, including those expected to enter South Korea by year’s end.

The study said 118 (56 percent) of 211 respondents said they earn under 500,000 won a month, or less than the minimum cost of living (504,344 won) per capita set by the Health and Welfare Ministry. Those who earned more than 500,000 won but under one million won (880 dollars) accounted for 21 percent (44), between one million and 1.5 million won (1,320 dollars) 16 percent (34), and between 1.5 million and two million won (1,760 dollars) five percent (10).

On discrimination in hiring, 93 of 216 respondents (43 percent) said they felt “slight” discrimination and 41 (20 percent) “strong” discrimination. Among 213 respondents, 115 (54 percent) said they earn less than a South Korean for the same work, and 58 (27 percent) out of 206 respondents said they felt ostracized due to their identity.

On their living conditions, 105 (48 percent) of 219 respondents said they are “poor” and 39 (18 percent) “very poor,” while 64 (29 percent) said they lead “moderate” lives, five (two percent) “affluent,” and six (three percent) “very affluent.”

A 40-something North Korean female defector urged South Koreans to show consideration for defectors on the questionnaire.

“We are a family of five. My husband is in bed due to hip surgery. Those unable to work due to illness have a very hard time making a living. I do my best to earn a good living but realize that this is impossible for those who have no power. We are heartened by your words of encouragement. We’d be very happy and grateful if you understand our difficulties and take care of us,” she said.

Read the full story here:
NK Defectors Complain of `Cold Lifestyle` in S. Korea 
Donga Ilbo
10/1/2010

According to Yonhap:

An increasing number of North Korean defectors have been attempting to seek asylum in foreign countries, hiding their newly-won South Korean nationality and pretending to be fresh from the communist nation, a lawmaker said Wednesday.

Britain and Norway have been among the popular targets for these fake asylum seekers, Rep. Hong Jung-wook of the Grand National Party said, citing data from the foreign ministry. Hong said the government should make sure the issue does not escalate into diplomatic problems.

Apparently over concerns about fake defections, Britain has stopped granting asylum to North Korean defectors since last year. In 2008, Norway found more than 50 North Korean defectors with South Korean passports or identity cards during an inspection of a refugee camp, according to the lawmaker.

Since 2004, a total of 695 North Korean defectors have formally filed for asylum in Britain, with the number of applications rising from 20 in 2004 to 410 in 2007. Of those applicants, 373 were granted the asylum, 185 were denied and 135 under consideration as of March of last year, according to the lawmaker.

But the British government estimates that the actual number of North Korean defectors who had come to the country for asylum purposes since 2004 would be about 1,000 and suspects that 70 percent of them would be of South Korean nationality, the lawmaker said in a release.

Britain reached the estimate after a survey of three dozen North Korean asylum seekers, who agreed to provide their fingerprints for the investigation, found that 75 percent, or 24 people, were found to be of South Korean nationality, the lawmaker said.

“Based on this problem, the British side has been asking that our government provide it with broader information on the fingerprints of North Korean defectors, and even demanding a treaty be signed on this,” the lawmaker said in the release.

Hong also said that about 600 fake asylum seekers are believed to be still staying in Britain or Norway, and called on the government to take steps to bring them home.

“The increase in fake asylum attempts by North Korean defectors is because their life in South Korea is difficult,” Hong said. “The government should allow them to return by granting a grace period so as to prevent the issue from growing into a diplomatic problem.”

The foreign ministry denied that Britain had asked South Korea to take back the fake asylum seekers or demanded a treaty on fingerprint information.

“As this issue is related to our nationals, we have been cooperating with related countries within the necessary bounds and are in talks with related countries to work out appropriate measures,” the ministry said in a statement.

Since the 1950-53 Korean War, nearly 20,000 North Koreans have defected to the South to escape from hunger and political suppression in their communist homeland. But many of them have a hard time getting decent jobs due to their lack of education and social discrimination.

Read the full story here:
Increasing number of N. Korean defectors in S. Korea seek asylum in foreign countries
Yonhap
Chang Jae-soon
9/15/2010

According to the Korea Times:

Approximately 20,000 North Korean defectors are living in South Korea nowadays. Frankly, this number is not particularly large: in comparison some 689,000 East Germans defected to East Germany between 1961-1989, and the number of defectors/refugees from other Communist countries was also counted in the hundreds of thousands.

North Korean refugees are very dissimilar from the refugees from Eastern Europe who crossed over to the western borders in large numbers during the Cold War.

Until the mid-1990s escape from North Korea was almost impossible, but things changed when North Koreans began to move to China which became the major stopover for nearly all refugees. Now the community of illegal North Korean refugees in China is estimated to be around 30,000-40,000. These people are usually members of the underprivileged social groups who once lived in areas of North Korea which are close to the border with China.

People of the borderland areas began to cross over to China in large numbers in the mid-1990s (an illegal crossing is not difficult since the border rivers are not broad, and also freeze in winter). In the first stage those people were fleeing starvation, but from around 2000, most of them have been attracted by jobs available in China. For most people these jobs would not appear lucrative: in that part of China a construction worker can earn a wage of $80-$90 a month (free accommodation provided), while a humble waitress is usually paid some $50 a month. However, the average salary in North Korea is now about $2-$3 a month, so this income is extremely attractive to poor North Korean farmers.

Of course, crossing to China and working there illegally is not risk-free. Chinese employers might be cheating, refugees are hunted by the Chinese police and if found extradited back to North Korea.

Nonetheless nowadays the punishment of extradited refugees tends be lenient ― by the cannibalistic standards of the North Korean regime, that is. If an extradited refugee can handle a few days of intense beatings and moderate torture without confessing that he or she did something politically dangerous in China ― like contacting Christian missionaries, South Koreans or foreigners ― chances are that the refugee will get away with just a few months of imprisonment.

This situation determines the composition of the refugee community in China. The typical North Korean refugee in China is a middle-aged woman (women outnumber men roughly three to one since it is easier for them to leave the village and reach the border). She has spent all her life working at a farm in a remote North Korean village. At best she might be a primary school teacher or a low level clerk in the local administration. Of course there are elite refugees, but those constitute a small minority.

Most of these people would like to move to South Korea if they are given the opportunity. Such a move is impossible for the vast majority. Contrary to the official rhetoric, South Korean government agencies in China are not excessively eager to help the run-of-the-mill defector (those few who have intelligence or political value might be a different matter).

Nowadays defection is, above all, business, controlled by defection specialists known as “brokers’. If they are paid a fee which currently fluctuates around $2000-$3000 per head but in some special cases might go higher, they can move a person from borderland areas to a third country where they would go to a South Korean consulate or embassy (usually, in Thailand or Mongolia). In third countries (but not in China) South Korean diplomats issue defectors with provisional travel documents and a ticket to Seoul.

The money which is necessary to pay for the broker’s service comes from different channels. In most cases, the sum is provided by a family member who has already reached Seoul. Acquiring this money independently is well beyond the means of the average North Korean refugee in China.

Upon arrival defectors go through a few weeks of debriefing by the South Korean intelligence agencies (admittedly, most of them don’t have much of interest to tell the South Korean authorities). This is followed by three months of readjustment training at Hanawon, a special reeducation facility for refugees. There the new arrivals are briefly lectured on the wonders of liberal democracy as well as provided with somewhat more useful knowledge about foodstuffs available in South Korean shops and the way to pay for a subway ticket in Seoul. Then they are provided with a modest accommodation (heavily subsidized by the government) and some stipend for the initial expenses (the sum varies, but the rough average is around $10,000 per person).

From that moment on, the North Korean refugee starts his or her life in the South. And, as one can easily predict, this life is usually quite difficult. Seoul is a tough place for a former North Korean housewife.

Read the full story here:
Lives of N. Korean defectors
Korea Times
Andrei Lankov
8/15/2010

Andrei Lankov writes in the Asia Times:

Sisa Journal, an influential and well-informed South Korean weekly, recently published interesting statistics. It is well known that some 20,000 North Korean refugees currently reside in South Korea. However, the magazine reports that an estimated 200 of them are not here any more. Surprisingly, they have moved back to the North.

Who are those returnees? Broadly speaking, from this correspondent’s personal knowledge of North Korean refugees, they belong to three separate categories.

To start with, some returnees – a few dozen, perhaps, are North Korea spies who completed their missions and went back to Pyongyang to receive their medals and promotions. Indeed, as a recent attempt to assassinate Hwang Chang-yop, the highest-ranking defector from the North, demonstrated once again, it is not too difficult to plant a few intelligence agents into the steadily growing stream of refugees.

To complicate things further, most refugees have their families in the North, so it is easy for the North Korean intelligence agencies to recruit even a bona fide refugee by blackmail.

However, one should not make too much from the presence of espionage agents in South Korea. They usually have no access to sensitive information, since refugees are seldom employed in jobs that give them such access (and if they are, they are watched carefully). So, the only area where they can gather meaningful intelligence is the activities of refugee groups from North Korea. Indeed, many of the refugees who have gone missing in recent years once demonstrated suspicious interest in defectors’ groups and organizations.

Another group of returnees are those refugees who were disappointed with life in South Korea. Most of the North Koreans went South with great and often inflated expectations, but soon they discovered the life they had to lead was far less glamorous than the life they saw in smuggled copies of South Korean TV dramas.

North Korean refugees are not faring well in the South. Their average income is about one million won (US$625) a month, roughly half of the national average. They do not have many useful skills, so they have to do only badly paid unskilled work. Last but not least, they are often discriminated against by “locals” – to the extent that many of them try to pass for ethnic Koreans from China (those are discriminated against, too – but to a somewhat lesser degree).

The situation is aggravated by a sense of loneliness and alienation. So, some North Koreans begin to perceive their past life in the North as an attractive alternative, and move back.

Technically, it is easy: since the refugees have South Korean passports, they can always depart from China after using a North Korean embassy or consulate there.

It helps that the North Korean regime follows a lenient policy towards returning refugees. They are allowed to settle down in their native towns and villages, and if they make a sufficient donation (reportedly, a few tens of thousand dollars) they can even be granted good positions and privileges. They are often used for propaganda, telling horror stories about life in the capitalist hell down south. Professional propaganda mongers help them to prepare such stories in which the personal experiences of the returnees (bitter, to be sure) are liberally mixed with necessary inventions.

And finally, some refugees cannot stand the thought of the families they left behind. Many of them move back to reunite with their families. In recent years, family defections can be arranged via a professional defection broker, but there are people who due to different reasons prefer a do-it-yourself defection. They go back and sometimes perish somewhere in China or North Korea.

So, even the tremendous material advantage of the South does not always make it more attractive. Yes, merely a few hundred refugees have chosen to move back (less so, if we take into account spies and those who went to get their families). Still, this is a discomforting reminder about their position in the prosperous and sophisticated South. It also does not bode well for unification.

South Korean society is not doing well when it comes to absorbing 20,000 North Koreans, most of whom are active and even adventurous people. However, sooner or later it will have to accommodate 20 million. How will it handle this task? The experience of the refugees makes one suspect that the first few decades of a unified Korea will be a tough.

UPDATE: Chris Green at the Daily NK takes issue with the source of Lankov’s numbers:

However, the department within the Ministry of Unification, which controls defectors settlement in South Korean society, asserts that there is more to it than that. “As far as the Ministry has confirmed, only two defectors have so far returned to the North, one of them came back again,” an official with the Ministry explained to The Daily NK this evening. “That number (200) seems to be exaggerated. There are many cases where police officers who are supposed to take care of defectors and their lives lose a defector’s contact details or where defectors leave their places without notifying our officers.”

Among those who disappear from where they live, many simply move to China to live with Chinese families. Therefore, the official noted, there are “insufficient grounds” for the assertion that the 200 who disappeared have actually returned to North Korea.

Read the full story here:
North Korean refugees head for home
Asia Times
Andrei Lankov
8/13/2010