Expert says higher brokerage fees likely account for increase, while poll also finds defectors financially better off
Fewer North Korean defectors are sending money to loved ones in the North in 2022, but the total amount of money they are sending back has increased, according to a new survey of defectors in South Korea.
The Database Center for North Korean Human Rights (NKDB) also found that North Korean defectors are closing the income gap with those born in South Korea and are overall financially better off than the previous year.
Experts say the statistics reflect the severe impact of DPRK’s COVID-19 border restrictions and the worsening economic situation for North Koreans, while the defector’s economic success shows the deepening economic separation between them and their North Korean relatives.
In 2022, 18% of the nearly 400 defectors surveyed by NKDB have sent money to family and friends in North Korea, down from 21% a year earlier. But the center estimated that the total amount this group sent to the DPRK this year was $195,000 (281 million KRW), $25,000 (36 million KRW) more than last year.
Peter Ward, an expert on the North Korean economy and NK Pro contributor, told NK News that the higher cost of remitting money explains why defectors are sending more cash.
“Some of the extra money being sent — maybe even all of it — is used to finance higher brokerage fees because brokers have to work longer and harder, taking larger risks to get funds into the country during the pandemic,” Ward explained.
Even before COVID-19, sending money to North Korea was a high-risk operation that could only be done with the help of brokers who operate along the Sino-North Korean border. Defectors typically wire cash to Chinese bank accounts, which brokers withdraw and then physically deliver to recipients in North Korea — for a heavy fee.
But this process has become even more difficult since North Korea beefed up border security with a shoot-to-kill order and other controls in an effort to keep COVID-19 out of the country.
“There are probably fewer brokers,” Ward said, “meaning that even if those brokers don’t need to take bigger risks and spend more time and money getting funds in, those fewer brokers can still charge more.”
Verifying whether remittances have arrived has also become more difficult, a defector told NK News in March, in part due to domestic lockdowns and movement restrictions within the country.
“The process used to be that a broker would take pictures of family members on the spot, and send them to me before and after handing over the money,” a middle-aged female defector explained on condition of anonymity.
But restricted communication channels between brokers, defectors and family members have disrupted this verification process, increasing the risk that things may go wrong and making it more of a gamble to remit funds.
On top of that, it has become harder for North Koreans living in central areas to receive money from defector family members.
“As a result of internal travel restrictions, people living further away from the border provinces face even more difficulties in engaging with brokers,” said Seongcheol Park, a senior researcher at NKDB told NK News.
Closing to The Wage Gap
But while life for North Koreans has gotten ever more difficult, defectors in South Korea are increasingly faring well.
Senior researcher at NKDB Soonhee Lim told NK News that the survey, which included 399 defectors interviewed between Sept. 19 and Oct. 2, 2022, shows “both the economic activity participation rate and the employment rate have increased.”
The average monthly wage has increased from 2.2 million won ($1,500) in 2021 to 2.5 million won ($1,720) in 2022, getting significantly closer to the average 2021 South Korean wage of 2.7 million won ($1,898).
Further, Lim said that only about 20% of defectors primarily relied on manual labor for wages in 2022, whereas 33% did just two years ago in 2020. “This shows that more North Korean defectors have been able to find more skilled jobs recently.”
Defectors are also increasingly becoming entrepreneurs, with the number of those self-employed increasing from 9% in 2019 to 17% in 2022, according to Lim.
Hanna Song, director of international cooperation at NKDB said that it is “encouraging to hear the success stories of North Korean defectors.”
North Korean defectors are “an important connection to the actual people of North Korea,” according to Song. “Their empowerment in South Korea directly impacts the livelihood of isolated North Koreans.”
“However, we can’t help but think of how one group grows in their success, their families in the North face greater economic hardships than ever,” Song added.
Source: NK News