A banner promoting North Korea’s 150-day economic production campaign in August. Photo: Ben Piven

Part 6 of 6 in our Inside the Hermit Kingdom series on the people and culture of North Korea. Worldfocus multimedia producer Ben Piven writes about the contrast between the North Korean economy and the booming economies of South Korea and China.

“Why does South Korea produce Samsung, LG, and Hyundai?” I asked Jong, our 25-year-old North Korean tour guide.

She said that North Korea will manufacture sophisticated goods once the essentials — electrification and rice production — are covered. But the blank look on her face suggested that she better not discuss the issue.

Then, she perked up when someone asked about her own ideal job. She replied matter-of-factly, “I’d be a businesswoman.”

Jong’s 5,000 KPW (Korean People’s Won) monthly salary is equivalent to around $1.67. The official rate for the North Korean won is 142 per U.S. dollar, but due to severe inflation since the mid-1990’s, the black market rate is over 3000 KPW to $1.

Housing, health care and education are free in North Korea. But with her meager salary, Jong on her own could never afford the television or computer which her family of four (including her mother, father and grandmother) possess. Euros, dollars and Chinese yuan are needed for major purchases.

In North Korea, tourists are not permitted to enter non-tourist shops or purchase the local currency, since a negligible amount of foreign currency could buy out an entire store. Opening up shops and currency to the market would cause economic humiliation.

North Korea’s GDP is $1,700 per capita, 1/15 of South Korea’s, according to the CIA Factbook. Tied with Cote D’Ivoire and just a tad wealthier than Chad, North Korea is poorer than Laos and Cambodia. North Korea went from one of the most prosperous East Asian countries in the 1970s to the least prosperous today.

A Yalu River bridge once connected North Korea with China but was bombed out by the U.S. during the Korean War. Photo: Ben Piven

It wasn’t always this way. Having relied on the Soviets for economic inputs, North Korea developed faster than South Korea in the aftermath of the 1953 armistice that concluded the Korean War. The country’s infrastructure was mostly built from the late 50s to the early 70s, when the Soviet system was strong.

But by the 1980s rural South Korea had transformed into a tech-savvy urban tiger, and the stunted north turned more repressive after a number of aborted attempts to liberalize the economy.

The Juche state ideology — which emphasizes economic self-reliance  — intensified around 1982, almost certainly in response to South Korea’s explosive economic growth. Today, the paradox is that North Korea may be isolated,  but it’s not self-reliant. The authoritarian state relies heavily on food and fuel aid from abroad — as well as, some say, criminal activities.

David Rose explains in Vanity Fair how the Office 39 slush fund supplies Kim’s personal coffers, his inner circle and the missile defense program. Annual revenues from decidedly un-Juche activities, including crystal meth sales and human trafficking, may surpass $1 billion.

North Korea suffers economically from a strict economic embargo. Photo: Ben Piven

According to Rose, the D.P.R.K. is also the world’s top producer of “supernote” counterfeit $100 bills. Since the government cannot legally borrow cash, military sales and criminal rackets generate enough hard currency to keep the regime from collapse.

Since Kim Jong-il implemented songun (military-first budget policy) in 1994, the nuclear program has propped up the regime but stunted the people’s health and welfare. And economic sanctions have further impoverished ordinary Koreans.

On our officially-sanctioned tour, we gawked at workers burning rubber shoes to pave roadways and saw only one functioning crane in five days. Like the country’s infrastructure, corn and rice plots were orderly but dilapidated. Peasants worked in large groups, then napped individually in tiny wooden shacks.

Except for one rainy day, our bus was lonely on the roadways. Endless queues of people waited for antique Soviet trams and buses, while government officials drove fancy German cars. The only billboards advertised Pyonghwa Motors, co-owned by Sun Myung Moon’s Unification Church and under license from Fiat.

Officially, 2012 (Kim Il-Sung’s 100th birthday, known as Juche 100) will mark the completion of several projects, including the pyramidal Ryugyong Hotel, begun in 1987 but halted in 1992 due to severe shortages. Though the country’s tallest structure, the 105-story building is absent from tourist maps.

A North Korean phone on the country’s only cellular network. Photo: Ben Piven

The top two floors are being renovated as an office for Egyptian telecom magnate Naguib Sawiris, whose Orascom employees are also installing the nation’s first cell service, KoryoLink. The company has already enlisted over 50,000 subscribers at $25 per month. Sawiris also recently launched Ora Bank, another joint venture with a North Korean government partner. (North Korea’s ties with Egypt date back to the 1973 Yom Kippur War. In return for air force squadrons, North Korea later received scud missiles).

Some Americans believe that more economic engagement is the best way to bring North Korea in from the cold. There are some signs that the Juche nation is slowly bending to Western commercial pressures - witness the Taedonggang beer ad, Pyongyang pizza craze, and a new Singaporean-owned fast food restaurant.

But for now, despite the rapid globalization on its borders, North Korea remains in an economic deep freeze.

- Ben Piven

Sabatini discusses how globalization, democracy and the search for natural resources are contributing to the increase in indigenous political movements. He also explains who is being effected and how activism is impacting countries across the region.

An employee of Logistique Petroliere in Madagascar. Photo: Flickr user DavidDarricau

Ayo Johnson, a Worldfocus contributing blogger, writes about extraction of natural resources in Africa. The piece is excerpted from his blog, Africa Speak International.

The truth is that Africa is the next new frontier of mineral exploration. With major stakeholders battling, wilding and conniving their charm against a complex network of shady deals to outwit the cool, smart and calculative moves of the Chinese.

Africa’s strategic importance cannot be underplayed nor its value cheapened. Its geographical positioning and untapped mineral wealth make it a unique selling proposition to any investor. The trading ability of any multinational company is dependent on contracts signed and memorandum of understandings reached between hosts and investing governments.

African countries, dissatisfied by unequal trading relationships with the rest of the world, have hardened their political stance. China’s current interest in Africa is only a convenient opportunity for African governments to support another would-be investor.

China’s relationship building with Africa over the past 10 years has left the continent in relatively decent shape. African governments have realized that they need trade far more than aid. They need fair term without carrot and stick approach linked to investment. Africans clearly understand that they can choose between China from the East versus the rest of the world.

China has stolen the lead in Africa with over $60 billion worth of investment and untold influence.

Virtually in slow motion, overnight the Chinese had taken a grip of mineral extraction with Europe and the U.S. a distant fourth. Behind Russia and Brazil — both major players in their own right.

Industrialized nations’ appetite for oil goes unabated despite calls from pressure groups. Governments need to diversify into large scale production of new greener cleaner technologies of wind, solar and hydro. Wars in the Middle East, combined with strained relationships with many other oil-producing countries, have forced the West to look for new suppliers of oil.

China is also desperate; its rapid growth and technological advancement have increased its appetite for energy to fuel its enormous economy. This is the central driving force that justifies it presence in Africa. China’s dominance across the continent has come at a price. The Chinese have built bridges, road and general infrastructure all for free — in a bid to guarantee access to Africa’s precious minerals.

China has also provided soft loans to African governments, namely Angola, Sudan, Zambia, Congo and Rwanda as a means of raising much needed private capital outside of the framework of the IMF and the World Bank.

The Chinese have not imposed conditionality packages as part of their loan agreements, unlike the stringent and detrimental conditionality packages imposed by industrialized nations. Instead China has requested that African governments in receipt of Chinese money do business with Chinese companies and buy goods from Chinese firms.

Guaranteeing that the circulation of money is kept strictly with the China-Africa trade zone squeezes Western products and firms out of the picture. There are now little Chinatown enclaves popping up all over Africa with cheap Chinese goods replacing Western brand names.

It is therefore not surprising that President Obama visited Africa, flagged by an extended trip to various mineral hot spots by Hillary Clinton. The U.S. is eager to show support to Africa and to rekindle influence in a bid to up root and dislodge the Chinese iron grip on the continent.

African leaders and their advisers have finally awakened, realizing what the new type of global politics is all about. Who are the new major players, and what choices have to be made?

Africa finds itself in a very unique position to be able to choose among multiple investors all bidding for the same job. This increases the value of Africa’s currency, ensuring that the best deals are signed.

Africa’s choice will be at the expense of Western governments and their respective multinational companies. A liberalized continent is voting with its feet and changing suppliers, manufacturers and investors all at the same time. This is ground-breaking and truly unprecedented.

U.S. soldiers training Afghan military and police. Photo: Flickr user USAarmy

In a reminder of just how bad the problem of corruption is in Afghanistan, today’s Washington Post quotes an American official as saying that the Afghan minister of mines accepted a $30 million bribe to award its largest mining project to a Chinese firm.

According to the report, the minister received payment in exchange for awarding the Chinese company the rights to one of the world’s largest reserves of copper. The minister is now also reviewing offers for an iron ore project, and the Chinese bidder is said to be the front runner.

Should the United States continue to give aid if Afghanistan doesn’t clean up corruption?

Worldfocus regulars Marcus Mabry, the International Business Editor for the New York Times, and Roben Farzad, a senior writer for BusinessWeek, join Daljit Dhaliwal to discuss the implications for the Obama administration.

They talk about whether the Chinese will influence U.S. policy on issues ranging from Afghanistan to health care because of this new reality.

A recent report found that China is the world’s leading renewable energy producer.

Daljit Dhaliwal speaks to Emma Duncan, deputy editor of the Economist, about the future of green growth around the globe.

Is the United States lagging too far behind other countries in developing renewable energy sources and businesses?

Tell us what you think in the comments section below. Please remember to be respectful and on-point in your comments. Malicious or offensive comments will be deleted and repeat offenders will be banned.

While Obama has spoken with Chinese leaders in depth about business and trade, human rights issues have not been the main topic of the bilateral dialogue.

Daljit Dhaliwal talks about China’s new role with Jamie Metzl, executive vice president of the Asia Society. He says that China may emerge as a strategic partner.

During the town hall meeting, Obama emphasized how much work needs to be done on climate change and other areas of multilateral cooperation.

Melissa Chan of Al Jazeera English reports from Shanghai.

And Steve Chao of Al Jazeera English reports on China’s meteoric rise and the country’s multifaceted influence.

President Obama at the Shanghai town hall meeting. Photo: Al Jazeera English video

In his maiden voyage to East Asia as commander-in-chief, President Obama has emphasized how the U.S. and China need to work together on global issues.

As China becomes a more visible player on the world stage, the U.S. is ambivalent about how to balance trade interests with concern for human rights.

Given the importance of the China-U.S. economic relationship, is the United States putting too much emphasis on human rights in China?

Tell us what you think in the comments section below. Please remember to be respectful and on-point in your comments. Malicious or offensive comments will be deleted and repeat offenders will be banned.

Air Koryo stewardesses with delicately coiffed hair and impeccable red suits directed us to our seats in the stuffy Tupolev aircraft. Flimsy seat backs folded completely forward onto the seat cushions. Pyongyang-bound tourists, businessmen, and North Koreans fanned themselves ferociously, as the temperature hit 80 degrees.

Forget Bill rescuing Laura and Euna in a private jet. Our Soviet-made plane first arrived in Pyongyang when Richard Nixon was conducting ping-pong diplomacy with China.

Banned in the E.U., Air Koryo is the only international carrier with the lowest 1-star Skytrax rating. Luckily, flight JS 156 from Shenyang was only 50 minutes.

We touched down, sweaty and relieved. The head stewardess announced, “Welcome to the Democratic People’s Republic of Korea!” We blue-state Americans were ready to challenge the hermit kingdom’s concept of “imperialist dogs.”

Fearlessly led by three 2009 Brown University graduates, our Five Passes group had 18 scholarly Americans — including a Berkeley sociologist and an assistant director at the Asia Society — and 1 Chinese citizen. The tricky visas for the five-day North Korea tour had been arranged through North Korea’s consulate in Shenyang by a Chinese travel agent of North Korean origin.

After landing, airport officials escorted one of our guides and me to a back room to take our temperature. (Back in New York, I had half-joked whether a senator would rescue me from ping-pong with the dictator). They said we were warm - probably false - but maybe the result of the steamy plane ride. Twenty minutes of detention were disconcerting.

We had left forbidden items in China - several iPhones, a Blackberry, Star of David necklace, and a large zoom lens. Our group was anxious that customs officials might find a New Yorker cartoon of Kim Jong-il.

After leaving the terminal, we boarded our old tour bus and saw five half-smiling North Korean hosts - our guide, guard, minder, driver — and cameraman. We instantly became the subjects of a government travel documentary. Our tailor-made Truman Show had begun — in a 1950’s dystopia behind the Korean curtain.

We stayed at the grand Yanggakdo Hotel, on an island in the middle of the sluggish Taedong River. While the rooms looked like those in a 1970’s Ramada, we delighted in the 9-hole golf course, revolving rooftop restaurant, and Chinese-owned casino.

We mingled with Westerners and local families at the outdoor bar on the island’s edge. Bar matrons tended tables until after midnight — and even remembered our Koreanized names when we stepped into the fluorescent light of the breakfast hall by 6:30 a.m.

On the third day of our 92-hour time warp to the world’s most secretive country, we drove to Mt. Myohyang, 90 miles north of Pyongyang. Bob, a University of Colorado professor and our most quintessential American, bowed awkwardly at a waxen Kim Jong-il inside the International Friendship Exhibition. We chuckled about Bob’s homage to the “dear leader.”

Walking past thousands of treasures received by the reclusive leader and his late father, our guard commented on the U.S.-D.P.R.K relationship. “When the general plays with that ball, it proves that he controls the whole world in his hands,” said Lee, glaring at the Michael Jordan-autographed basketball Madeline Albright gave to Kim Jong-il in 2000. We then nicknamed our guard “Serious-Lee.”

His diametric opposite was our baby-faced 33-year-old minder with Buddha ears - also Lee - whom we called “Happy-Lee.” Neither Lee told us his first name, enabling our good cop/bad cop monikers. “Naive-Lee” versus “Stern-Lee.” And “Nice-Lee” versus “Malevolent-Lee.”

Nice-Lee charmed us with awkward English, using “representative” and “condensed” to describe our experience. But Serious-Lee, who stars in the 2008 Vice Guide to North Korea, prevented us from causing real trouble.

Nice-Lee fondly recalled the American and North Korean flags displayed side-by-side at the February 2008 Pyongyang performance of the New York Philharmonic. He was also impressed by the orchestra’s many Asian-Americans.

Our guide was an pretty 25-year-old woman who cheerfully promoted government dogma but tired of our questions. Our postmodern sensibilities overwhelmed her, especially when we spoke candidly about diplomatic rapprochement. But we did our best to transcend ideology by discussing nonpolitical issues.

On our tightly managed tour, objectivity and authenticity were in short supply. Though culturally sensitive, we critiqued claims about the economy and the allegedly hostile U.S. government. Bearing our American soft power, we were lucky to visit in the footsteps of our ex-president. Although we feared becoming pawns of Pyongyang’s public relations campaign, we hoped that our educational tour benefited the broader diplomatic thaw.

On our last day in Pyongyang, we said goodbye to plentiful Kimjongilias and Kimilsungias, the country’s revered flowers. At the airport, we noticed only two flights listed that day.

The return flight was the most terrifying part of the entire trip. Taiwanese passengers twice shrieked when the plane dropped dramatically. The plane was a microcosm of the country: in complete disrepair, while most people inside remain mum about their plight.

We cursed that the embargo prevented Air Koryo from updating its ancient fleet. I’ll wait until new jets arrive for my next voyage to the perfectly preserved Cold War museum, our beloved Hermit Kingdom.

- Ben Piven

Nina Hachigian with Deputy Secretary of State James Steinberg. Photo: Flickr user CenterforAmericanProgress

I haven’t much posted recently because I just finished a report about China’s role in the international system.

China’s New Engagement in the International System looks at China’s engagement on four transnational threats that the Obama Administration has prioritized — global warming, the global economic crisis, nuclear proliferation and global pandemics like the swine flu.

The bottom line conclusions I reached were these: China’s transformation on the international stage has been profound, moving from a hostile, aggressive “rogue” state outside the international system to a full and active participant in global institutions.

China is deeply engaged in international institutions and initiatives. Chinese officials show up to all meetings, they are serious, and they often contribute to policy discussions in a constructive manner. This is no minor milestone.

Yet the quality of China’s engagement today on these four transnational issues leaves something to be desired from an American point of view. While China does play by the international rules to a large extent in these four areas, China does not reliably use its clout or leverage either to solve global problems or strengthen the system.

Rarely does it show proactive leadership on global problems, though the cases of North Korea’s nuclear program and pandemic flu are hopeful exceptions.

We launched the report this week at an event at the Center for American Progress with Deputy Secretary of State (and my former boss) Jim Steinberg. I asked him all questions about the framework for US-China relations and the upcoming trip. You can watch it here.

I’ll write more on this topic and the President’s upcoming trip to Asia in posts to come.

Pottery, glass and ceramic making are ancient industries in Hebron, Palestine. The city’s leather, stone, glass and ceramic goods are found throughout Palestinian, Israeli and Arab markets — but this is changing with the advent of economic globalization and fierce competition from inexpensive Chinese goods. Additionally, the political instability that has plagued the region for many years scares away tourists.

Emad El Natche and his family own and operate a Hebron glass and ceramics factory. Mr. El Natche spends hours in front of a gas oven melting recycled glass bottles at high temperatures. No two pieces that Mr. El Natche creates are alike; he prides himself on the attention to detail each piece gets. He says all of his creations are unique because of the process that no machine can replicate.

Despite the challenges from globalization and a lack of master craftsmen, El Natche remains hopeful that this ancient craft is not going to disappear without a fight.

- Mohammad al Kassim

Last year, the Economist magazine slotted Ethiopia as the fourth fastest growing economy in the world, ahead of China. The World Bank report “Doing Business 2010” ranks Ethiopia in the top 10 African nations in terms of the ease of doing business. The Ethiopian government is trying to strengthen local and regional businesses and attract foreign direct investment.

Martin Savidge, Ethiopian businessman Ermyas Amelga and economics professor Phillip LeBel discuss how easy it is to do business in Ethiopia, who’s investing and what this means as Ethiopia moves from an agrarian society to a more urban society. The entrenched poverty hinders the robust investment environment, saddling the country with drought, food shortages and inadequate infrastructure.

Some highlights from the show:

• Ethiopia is not a resource-based economy. The sectors that are thriving in Ethiopia are real estate, construction, services, manufacturing, textiles and commercial agriculture with arable land leasing
• A growing population topping 80 million people make Ethiopia a strong consumer society
• Major investors in Ethiopia: China, India, Turkey and Egypt — the U.S. is not a major investor
• Ethiopia’s poverty-stricken image and government-controlled electronic communications and the Internet are potential hurdles to foreign investment
• Ethiopia’s Diaspora community is driving Ethiopia’s real estate boom

Martin Savidge hosts the following guests:

Ermyas Amelga is an Ethiopian businessman based in Addis Ababa. In 1996, he returned to Ethiopia after academic training and working in investment banking in the U.S. He has founded or acquired 11 companies, overseeing more than 2000 employees in the mining, oil, agriculture and financial services sectors. Ermyas also consults investors on entering the Ethiopian market.

Phillip LeBel is an economist and business professor at Montclair State University in New Jersey. He specializes in economics of developing countries, with emphasis on Sub-Saharan Africa and East Asia. This Spring, he was a Fulbright senior fellow in Addis Ababa teaching natural resources economics. He has consulted for USAID, the World Bank, UNESCO, WHO, FAO and the U.S. State Department on various subjects pertaining to economic policy issues.

For more coverage on Ethiopia, watch Worldfocus’ signature videos on the coffee industry, a remote village and Ethiopia’s history and beauty. Watch the PBS Wide Angle film “The Market Maker” about one woman who has created a commodities exchange and revolutionized agricultural distribution in the country.

Credits:
Host: Martin Savidge
Producers: Lisa Biagiotti and Ben Piven

Valijagate threatens to embroil at least one South American leader. Photo: Flickr user quecomunismo

There’s a story in Argentina that has become widely known under a simple title: La Valija (the suitcase). It should be destined to become that country’s version of Watergate. “Valijagate” refers to the discovery in August 2007 that Guido Antonini, a Venezuelan-born American, was carrying a suitcase containing $800,000 in U.S. currency when he arrived on a private plane at the Buenos Aires city airport, Aeroparque Jorge Newberry.

A new book, Los Secretos de la Valija (The Secrets of the Suitcase), is just out in Argentina, written by an Argentine colleague, Hugo Alconada, a journalist with La Nacion and the newspaper’s former Washington correspondent. (Full disclosure: Hugo is a friend, and he mentions me in the acknowledgments of the book, but I didn’t work on the investigation itself).

Alconada’s story percolates with intrigue and new revelations about the suitcase and Antonini, who ultimately said in a Miami trial that he was carrying the loot on behalf of a top Argentine official and that the money was from the Venezuelan oil monopoly, PDVSA.

But that came only after he wore a wire and became a cooperating witness with the U.S. Government. In resulting tapes, Venezuelan handlers promised him protection for claiming the suitcase was his, and not revealing that the suitcase was sent to the presidential campaign of the now-president of Argentina, Christina Kirchner.

Argentinian officials have denied involvement and Venezuelan president Hugo Chavez has charged Antonini was employed by the Bush administration in a campaign to malign his government.

Alconada’s book, so far only in Spanish, deserves publication in English in the United States. His extensive investigation reveals:

• The plane carrying Antonini and the suitcase that was transporting much more than the $800,000 — a total of $5 million.

• Despite government denials, Antonini went to the Argentina presidential palace, the Casa Rosada, after the money was seized at the airport. Moreover, the book details a plan in which Argentine and Venezuelan officials coordinated a cover-up of the case.

• It also notes that Antonini had a history of working for Chavez. He helped organize trips to 24 countries in Africa, Southeast Asia and Pacific islands in a 2006 vanity campaign by the Chavez government to promote Venezuela’s appointment to a temporary slot on the UN Security Council.

There’s an interesting sidelight to the cloak and dagger story. A funny thing happened earlier this month as Alconada answered questions at a bookstore to promote his story. At some point, possibly when a questioner approached him as a distraction, his briefcase, which contained notes about three of his current investigations, disappeared.

A similar black briefcase was left in its place.

Alconada doesn’t get it and jumps to no conclusions. “My newspaper wrote a small piece about it, and it became a big deal. I don’t know how to explain what happened.”

- Peter Eisner

The Hong Kong International Finance Center. Photo: Flickr user swisscan

Most world markets seem to be on their way upwards. Some countries have indeed pulled their economies out of recession, and many economists say that the U.S. is moving in that direction.

Although leading economic indicators signal increasing strength in the American economy, jobs remain scarce. Analysts predict that third-quarter growth will be positive for the first time in four quarters.

From your perspective, is the economy getting better?

Tell us what you think in the comments section below. Please remember to be respectful and on-point in your comments. Malicious or offensive comments will be deleted and repeat offenders will be banned.

But since Zelaya’s ouster in a coup late June, most foreign donors have cut off aid to Honduras’ de facto government. If the Honduran political crisis continues, the legitimacy of next month’s elections will be called into question.

This would mean that the cessation of foreign aid could continue, leaving many impoverished communities to fend for themselves.

Craig Mauro of Al Jazeera English reports from the village of La Ceibita.

Should the United States cut off aid to governments it considers illegitimate, if ordinary people end up suffering?

Tell us what you think in the comments section below. Please remember to be respectful and on-point in your comments. Malicious or offensive comments will be deleted and repeat offenders will be banned.

Pyongyang residents at the Arch of Triumph. Photo: Ben Piven

The South Korean government says that the number of North Korean refugees in South Korea has surpassed 16,000, and recent immigrants are generally uneducated and underemployed. Worldfocus contributing blogger Jamblichus writes about their plight.

South Korea’s Unification Ministry has requested 9.3 billion won (US$7.9 million) to beef up its resettlement facilities for defectors from the North as the number of refugees arriving from its destitute neighbor keeps climbing.

According to the ministry’s 2010 budget proposal, Seoul plans to spend just over four million dollars to build a second Hanawon, a resettlement center for defectors and around three million dollars to establish smaller “Hana” support centers across the nation.

Lets hope that those doling out the cash take the request seriously (the ministry has requested a 25% budget increase for next year) for North Korean refugees are becoming a growing underclass in the South whose needs current resettlement facilities are hugely under-equipped to accommodate.

Until the late 1990s, the number of North Koreans defecting to the South remained insignificant, totaling just 86 between 1990 and 1994 and remaining in double-digits each year until 1999. Numbers began to shoot up thereafter — following a devastating famine in the North — with 583 arriving in South Korea in 2001 and 1,139 the following year.

On February 16, 2007, the unification ministry pulled a cracker for Chairman Kim Jong-il on his birthday by announcing that the total number of Northern refugees arriving in the South had reached 10,000; just 32 months later there are now more than 16,000. You do the math.

The first wave — in fact more a gentle ripple — of defectors were largely drawn from the North Korean elite. But recent defectors have often been young and unskilled, hailing from the communist state’s North Hamgyong province. The sheer numbers have meant they are treated no longer as romantic escapees deserving of full approbation by the southern public — but a burden on the taxpayer, somewhat unsophisticated and potentially threatening to the social order.

The South’s rigid and hyper-competitive education system looks almost designed to alienate young defectors further from an already difficult-to-crack South Korean society. And while there are success stories — from world champion female boxer Choi Hyun-mi to journalist Kang Chol-hwan — the vast majority wind up unemployed.

A survey of 654 defectors that was conducted in December 2006, showed that 45.1% were unemployed, 30% had part-time employment, 13.1% had temporary employment, and only 11.8% were either self-employed or had full-time employment. Another survey conducted by Professor Park Sang-an of Seoul National University in the same year came up with an unemployment rate of over 67%.

Things may have improved since then, but I’m guessing not dramatically, particularly given the sheer increase in numbers arriving. Another survey reported by the Chosun Ilbo in 2007 found more than half of North Korean teens in South Korea drop out of school, a staggering figure compared to the 1-2 per cent drop out rate for South Korean students.

Given the numbers, seven million bucks doesn’t sound like all that much. There’s only so long South Korea can afford such a failure of integration — as defector numbers burgeon — before the problem becomes significantly more visible. Let’s hope the Unification Ministry gets its money.

Remittances of 2.5 billion dollars make up Afghanistan’s entire national budget.

Richard O’Regan reports from Tehran.

Worldfocus correspondent Edie Magnus and producer Ara Ayer interviewed Velasco in Santiago in July.  His interview will be featured in several Worldfocus stories on Chile, including Chile squirrels away copper fortunes and spends prudently. This is part of our ongoing series looking at how other nations tackle complex policy issues.

In this wide-ranging discussion,  Velasco speaks about Chile’s privatization of social security, its past and present economic policy, and the lessons advisors have learned from economic cycles of the past.