How A North Korean Defector Sends Money Back Home
It may seem like North and South Korea are completely cut off from each other, but even after decades of separation, channels of communication persist. Defectors who have made it to freedom are bridging the gap, connecting people inside North Korea to the world beyond. Through extensive broker networks, they send back money and information, accelerating change in the world’s most authoritarian country.
Through this process known as remittances, millions of dollars are sent into the country every year, representing huge spending power. Here’s how they do it!
Reconnecting with Family
To send money back home, North Korean refugees must first contact their families. They hire brokers to find their relatives and arrange illicit phone calls close to the border with China, where smuggled Chinese cell phones can connect to international networks. In North Korea, people are often wary of such brokers, so they may have to be convinced with codewords or childhood nicknames that only the family would know, or recognizable handwriting and photos.
To avoid being caught, contact is often made from the mountain at night, or using a series of text or voice messages sent through apps like Wechat and quickly deleted. When the call finally happens, it can be emotional for both sides.
“You hear someone say, ‘Okay you’re connected, you can speak now.’ But no one says anything to each other. You just hear a high-pitched tone, and silence. Could this be real? You’re just crying, and can’t even speak.”
– Miso, escaped North Korea in 2010
How Remittances Work
There are different ways to send money to North Korea, but a simple version involves three parties: A North Korean resettled in South Korea, a remittance broker in North Korea, and the recipient in North Korea.
- A resettled North Korean, makes a request to a remittance broker to arrange a transfer. They wire money to a Chinese account controlled by that broker.
- The remittance broker in North Korea uses a smuggled Chinese phone to confirm receipt of the funds.
- After taking a hefty commission, they give cash to the refugee’s family. The family can confirm receipt of the money by sending a photo, video, or voice message back, so the sender can be confident that they’ve not been scammed.
With this process, the remittance broker in North Korea occasionally needs to replenish their cash on hand. This could happen through the physical smuggling of cash, but oftentimes money from their Chinese bank account is used to buy goods in China that are then sold in North Korea, generating cash. In this way, physical money never actually has to cross borders.
The Power to Change Lives
North Korea is one of the poorest countries in the world, whereas South Korea is one of the richest. Therefore remittances from relatives in South Korea or elsewhere can be absolutely transformative. The money is spent on almost everything, including food, clothing, shoes, medicine, housing, transport, and bribes to keep the family safe.
“I’ve sent money back to North Korea ever since I resettled in South Korea. I send an average of $1,500 a year. My parents used the money to buy a house! They’re also going to use it to help my younger brother escape and come to South Korea.”
– Jeonghyuk, resettled North Korean refugee
With new resources also comes new opportunities. North Koreans who never had the means before can now think about starting a business at the Jangmadang, or market. Since the collapse of the regime’s socialist economy in the 1990s, the markets have become essential to making a living. The flow of remittances is increasing trade, food security, marketization, and entrepreneurship, empowering ordinary North Koreans to gain autonomy.
A Ripple Effect
Along with money, North Korean refugees send back news and information from the outside world. At first, family members back home may not want to hear about life beyond the border. Decades of propaganda villainizing the outside world can be difficult to overcome, and if caught in communication with defectors, they could face serious punishment.
But as money continues to flow in, many people can’t help but be curious- what do their relatives outside do to make a living? What kind of house do they live in? Is life there like the K-dramas smuggled into North Korea? Conversely, defectors ask their family members, what they can do with the money in North Korea? This exchange of information is incredibly valuable, providing a glimpse into the most closed society on earth.
The flow of information into North Korea erodes the regime’s propaganda and changes worldviews. As the people learn more about the wealth and opportunities of the outside world, some may also risk their lives to escape. Money sent from remittances can also be used to fund this dangerous journey.
“When I first contacted my family back in North Korea after I resettled in South Korea, they didn’t believe that I was doing well here. My parents even resented me a little for leaving. But after I sent them money and told them more about my life here, their views changed. Now they realize that the regime has been lying to them and they’re not as loyal anymore. I have become a pioneer of freedom to my family back in North Korea.”
– Jo Eun, rescued by LiNK in 2017
Agents of Change
Remittances are about more than just the movement of money. Refugees who have been separated from their families aren’t able to go back home themselves, but can still care for their loved ones in some way. Every phone call into the country and every dollar sent back represents one small step towards the day when the North Korean people finally achieve their freedom.
More than 33,000 North Korean refugees have made it to freedom, and although it has become more difficult during the pandemic, surveys report that 65.7% have sent money back to North Korea. At LiNK, we’re committed to working with and building the capacity of North Korean refugees so they can succeed in their new lives and make an even bigger impact in their communities and on this issue.
North Korea 101: The History of North Korea
Watch The History of North Korea in Under 3 Minutes
If you want to go even further back, here's how North Korea came to be!
668 A.D: Ancient Korea
People have been living on the Korean peninsula since prehistoric times, slowly developing their own distinct culture and civilization. The Korean people were first united by the Silla Dynasty in 668 A.D. Since then, Korea has had to contend with the expansionist ambitions of its neighbors.
1910: Japan Colonizes Korea
In 1910, the Chosun Dynasty ended with Japan’s annexation and colonization of Korea. Koreans remember the Japanese colonial rule as a brutal experience. Resistance groups formed in Korea and China, mostly adopting leftist politics in reaction to the right-wing Japanese administration. Memories of the Japanese Imperial Administration’s oppression continue to haunt relations between the people of both Koreas and Japan today. Korea also began to modernize during this period, and the city of Pyongyang in particular became a vibrant center for Christianity and western culture.
1945: The Division of the Korean People
Following Japan’s defeat in 1945 the Soviet Union and United States agreed to split the post-war control of the Korean peninsula between themselves. On August 10, 1945 two young U.S. military officers drew up a line demarcating the U.S. and Soviet occupation zones at the 38th parallel. The divide should have been temporary, a mere footnote in Korea’s long history, but the emergence of the Cold War made this a seminal event. Seeking to ensure the maintenance of their respective influences in Korea, the U.S. and USSR installed leaders sympathetic to their own cause, while mistrust on both sides prevented cooperation on elections that were supposed to choose a leader for the entire peninsula. The United States handed control over the southern half of the peninsula to Syngman Rhee, while the Soviet Union gave Kim Il-sung power over the north. In 1948, both sides claimed to be the legitimate government and representative of the entire Korean people.
August 15, 1948
Syngman Rhee declares the formation of the Republic of Korea in Seoul, claiming jurisdiction over all of Korea..
September 8, 1948
Kim Il-sung declares the formation of the Democratic People’s Republic of Korea in Pyongyang, also claiming jurisdiction over all of Korea.
1950: The Korean War Begins
June 25, 1950
In 1950, Kim Il-sung attempted to unify Korea under his rule through military force, starting the Korean War. By far the most destructive and divisive event in Korean history, the war altered the life of almost every Korean person. Some historians claim that the U.S. military dropped more napalm on urban centers in Korea than Vietnam. The bombing campaigns reduced Pyongyang to rubble, and North Korea’s population was reduced by 10%.
July 27, 1953
Both sides eventually signed the armistice ending major hostilities in 1953. The DMZ (demilitarized zone) was established at almost the same position as the border before war broke out, separating millions of families caught on opposite sides of the border.
1953-1970s: Building a Stalinist State
From 1953 to the 1970s North Korea was considered by some outside observers to be a successful state. During this period, many North Koreans were actually better off than their southern brethren.
Kim Il-sung remodeled North Korean society along the lines of Juche—North Korea’s radically nationalistic ideology promoting Korean autonomy. The state-seized control of all private property and organizations. Officially, everything in the country, from businesses to the clothes on one’s back, belonged to the North Korean state. The regime rebuilt Pyongyang as a socialist capital and erected numerous monuments to Kim Il-sung, part of nationwide efforts to build a cult of personality to secure obedience by the people. The state took control of all media and restricted international travel. Kim Il-sung also worked constantly to centralize power under the Workers’ Party of Korea under his rule, and implemented a perpetual purge to rid the country of potential internal opponents to his rule.
Songbun
Massive inequalities began to emerge in North Korean society. The regime introduced the songbun system, which is still in place today. Under this system the entire population were sorted into different social classes according to one’s perceived loyalty to socialism and the regime. This classification determined the course of people’s lives. One’s songbun dictates the schools one can attend, the occupations one can be placed in, and even where one can live.At the time, the regime expelled around a quarter of the population of Pyongyang to the outer provinces for being of low songbun. For more on songbun, see this blog post.
The regime silenced anyone who opposed the system with extreme prejudice. Free speech became an offense punishable by imprisonment or even death. Worse, when one was arrested, up to three generations of their family would be sent to political prison camps. The regime instructed children to inform on their parents, and neighbors to inform on each other. Under these conditions, the North Korean people became fearful and distrusting of each other.
Stagnation
By the 1970s, the initial gains of postwar reconstruction and modernization had dissipated, and Kim Il-sung’s ideologically driven governance failed to produce prosperity. North Korea was also highly dependent on trade and aid from the Soviet Union and the Eastern bloc, so when the economies of those countries began to decline it greatly affected North Korea’s economy. The people’s quality of life stagnated in the 1980s and began to decline until the collapse of the USSR in 1991, at which point the North Korean socialist command economy stopped functioning. Poor agricultural policies and environmental mismanagement increased vulnerability to extreme weather conditions and brought increasingly meager crop yields. To make matters worse, the regime had lost allies to fall back on when the economy failed. North Korea’s reserves were quickly running out. These were the circumstances the country found itself in when Kim Il-sung died in 1994.
Economic Collapse
Kim Jong-il took power in the post-Cold War era when North Korea was on the brink of disaster. Realizing the need to handle both external and internal threats, Kim Jong-il instituted a “military first” policy that prioritized the military and elites over the general population to an even greater extent than before. This policy made the coming crisis even worse for the average North Korean. Many North Koreans blame Kim Jong-il’s leadership for the famine. In reality, Kim Jong-il’s policies exacerbated a crisis that was long in the making.
The economic collapse and subsequent famine in North Korea had its peak in the mid-to-late 1990s. It is estimated that up to one million people died—roughly 5% of the population. Even many of those that survived suffered immensely. Starvation in childhood has stunted the growth of an entire generation of North Koreans. The North Korean government had to lower the minimum required height for soldiers because 145 cm (4 feet 9 inches) was too tall for most 16-17 year olds.
In Barbara Demick’s book “Nothing to Envy”, a North Korean doctor tells of how even she became desperately hungry. After fleeing to China, she discovered a bowl of food left out for a dog. Upon examining the white rice and generous chunks of meat, she concluded that “dogs in China ate better than doctors in North Korea.”
July 8, 1994
Kim Il-sung dies and his son Kim Jong-il takes over as leader.
Social Changes
The collapse of the command economy led to widespread social changes. The need for food drove the North Korean people away from the regime’s control, as when the government stopped providing food, the survivors found other ways to feed themselves. People foraged and sold anything they could to buy food at small, illegal markets that began to spring up, creating a process of bottom-up marketization. Some fled to China, leading to a wave of refugees from North Korea, while information about the outside world slowly began to flow back into the country. Some resorted to prostitution or crime. What was once a highly ordered and controlled society gave way to a disorganized and fluid society, with new independent paths to wealth and power for those who defied the regime and pursued the markets. These social effects would continue even after the worst of the famine had passed.
2000s: The People & Markets Prove Their Resilience
By the early 2000s, the people began to recover. The markets, which initially emerged as a survival mechanism, gradually grew to encompass a broader range of goods and services and became better established. The markets today are the major source of food for ordinary North Koreans. South Korea also adopted the “Sunshine Policy”, in which it gave unconditional aid to North Korea, and increased economic cooperation between the Koreas. Established in 2003, the Kaesong Industrial Complex just north of the DMZ was part of this policy and now allows South Korean companies to hire over 50,000 North Korean workers. China also gradually strengthened its economic relationship with North Korea, and today is by far North Korea’s most important economic and political partner. Nevertheless, ordinary North Koreans continue to face the severe challenges of chronic food shortages and grinding poverty, while their basic freedoms are curtailed by a repressive regime whose number one concern is staying in power.
Always uneasy about the growth of the markets, in late 2009 the regime made their most drastic attempt to restrain the markets to date: a currency reform aimed at wiping out private wealth. The resultant market disruption and rapid inflation reversed the people’s hard-won progress, and even regime projects were derailed. North Korean refugees have described this as a watershed moment in their diminishing belief in the regime, with anti-regime sentiment so strong that it even rose to the surface in some communities. It is now absolutely clear to the regime that the markets are a fact of life they must learn to live with.
December, 2011
Kim Jong-il dies and his son Kim Jong-un takes over as leader.
Now: The Third Kim Era
In December 2011, Kim Jong-il died and his son Kim Jong-un inherited control of the nation. Thought to be just 27 or 28 years old at the time of his succession, Kim Jong-un was largely unknown to the North Korean people as well as to the outside world. North Koreans that escaped the country in 2011 told us that there had not been a lot of propaganda about Kim Jong-un during that year. By contrast, Kim Jong-il was much better known to the North Korean people when he came to power in 1994.
In his first years in power, Kim Jong-un has implemented a new PR style that has portrayed him as a modern version of his grandfather, while purging, demoting and promoting regime officials to secure his power base. The new leadership also moved to crack down on illegal cross-border movement and the inflow of foreign media, increasing repression in the border regions and reducing the number of defectors who managed to make it to South Korea by almost half. Meanwhile, there have been signs of cautious experimentation with economic liberalization in order to adapt to the reality of the entrenched de facto market economy inside the country.
North Korea’s history is far from over. In fact, it may be entering its most interesting phase. The people are becoming increasingly empowered and the grassroots changes spreading across North Korean society are steadily increasing the people’s physical and psychological independence from the regime, making the system as it is currently structured unsustainable. We cannot know the pathway that North Korea’s change and opening will take, but change and opening will happen, and the future of North Korea will be increasingly driven by the North Korean people themselves.
