SEOUL — North Koreans who have fled to capitalist South Korea send an estimated US$10 million a year to families left behind in the impoverished communist state, a report said Monday. South Korea’s Chosun Ilbo newspaper, citing Seoul officials and refugees, said the money has become a major part of the North’s underground economy in border areas. “With the number of North Korean defectors rapidly rising and diversified methods of money remittance, the total amount sent back is growing,” Chosun quoted a senior official as saying. More than 20,000 refugees have come south since the end of the 1950-53 war, half of them in the past five years. There are no official ways for individuals to transfer money from South to North. Seoul bans all unauthorized contacts. The remittances are arranged by brokers in China and in the North, who use their own bank accounts and cash reserves to transfer money with a commission of 30 percent, Chosun said. “Some North Koreans even say, ‘That family lives so well because their child had an interest in the outside world. I wish my children had the guts to cross the border and send some money,’” according to a refugee quoted by the paper. The refugee said a decent house in a mid-sized city in the North costs about US$620 to acquire — less than one third of the average monthly wage in the South. There is no official data on cross-border financial transactions by refugees in the South, said the unification ministry in charge of inter-Korean affairs. “We think the size of their bank remittances is growing … but we do not know yet how the money is being used in the North or what kind of impact it will have on society there,” ministry spokeswoman Lee Jong-Joo told AFP.
A botched attempt by the North in 2009 to revalue its currency worsened the already ailing economy.