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Cablegate: Rok Church Foundation Helping North Koreans Start

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DE RUEHUL #1010/01 1370809
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P 160809Z MAY 08
FM AMEMBASSY SEOUL
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INFO RUEHBJ/AMEMBASSY BEIJING 4296
RUEHMO/AMEMBASSY MOSCOW 8732
RUEHKO/AMEMBASSY TOKYO 4438
RHMFISS/COMUSFK SEOUL KOR
RHMFISS/COMUSKOREA J5 SEOUL KOR
RUACAAA/COMUSKOREA INTEL SEOUL KOR
RHEHNSC/NSC WASHINGTON DC
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RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/EAP//

UNCLAS SEOUL 001010

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PREF ELAB KS KN
SUBJECT: ROK CHURCH FOUNDATION HELPING NORTH KOREANS START
NEW LIFE IN SOUTH


1. (U) SUMMARY: In an effort to provide essential job
training and employment for North Korean refugees who have
been resettled in South Korea, a local church group formed
the "Merry Year Foundation" in 2007. The Foundation is
funded by donations from congregation members who generously
donated enough funds to start a box-making company from the
ground up. A South Korean CEO and several engineers will
provide the technical expertise while the 20-50 North Korean
employees will provide the low-tech labor. Workers will be
compensated above minimum wage in addition to other benefits
uncommon in similar South Korean operations. The North
Korean employees will also attend regular training sessions
to learn how businesses operate with the hope that they can
start up their own business in the future with the financial
backing of the Foundation. Projects such as this one are
rare but important because reports estimate that 18 percent
of North Korean defectors in the ROK are unemployed; a rate
five times greater than the South Korean unemployment rate.
End Summary.

2. (U) The God's Will Soong Eui Church was founded in 2001 by
Pastor Kim Dong-ho on the principle that wealth should be
used to help those in need. Two years after its founding the
church started a micro-credit program designed to provide
financing for poor South Koreans who showed potential for
running a business. In the five years since the program's
inception, the church has provided financing to 48
individuals who opened 20 businesses. Although some of the
businesses have since failed and closed their doors, Pastor
Kim Bum-suk said that about two-thirds have succeeded. A
group of twelve credit recipients each received approximately
USD 60,000 and opened a Korean-style fast food chain that has
seen strong success. Each of the recipients was able to
repay the principal of their loan plus the two percent
interest associated with the loan. (Note: The church
subsequently returns the interest payment to the business
owner as a bonus for successfully paying off the principal
amount. End Note.)

3. (U) Building on their success in the micro-credit field,
the church decided in 2005 to expand their efforts to
encompass North Korean refugees who have been resettled to
South Korea. Operating originally under the name "Council
Preparing for Unification," the church launched its North
Korean refugee support program with an investment of
approximately USD 14 million in donations from 5000
congregation members. In August 2007, the church established
the "Merry Year Foundation" to independently manage both
micro-credit programs and North Korean resettlement
assistance programs, originally run directly under the
church. The new organization also purposely dropped the
reference to "unification" given the public sensitivities to
the term.

4. (U) With the large cash donation in hand, the Merry Year
Foundation opened its own office and appointed staff from
within the ministry to being operations. Pastor Kim Bum-suk
from the church's education ministry was appointed as
Director General of Merry Year. DG Kim was also previously
involved in the micro-credit programs. Merry Year's goal was
to find ways to assist North Korean refugees who faced many
challenges in South Korea, especially in finding stable
employment and integrating into South Korean society. Merry
Year drafted a plan to build a business from the ground up
that would employ North Koreans while also teaching valuable
business and work-ethic skills. Those North Koreans who
exhibited solid work habits and business savvy would then
become eligible for micro-credit funding to start their own
business using the same model the church had used for poor
South Koreans.

STARTING FROM SCRATCH
---------------------

5. (U) Merry Year hired an experienced CEO to start and run
the business operations of a small box manufacturing company
to be located in Paju, near the DMZ north of Seoul. Merry
Year also hired ten other South Korean engineers with factory
experience who will maintain equipment and keep the operation
running. The 20 North Korean employees who were recently
selected to work at the factory will initially only provide
the manual labor associated with the box-making process with
additional responsibilities added in the future.


6. (U) In addition to building a business from the ground up,
DG Kim said that he also needed to provide the North Korean
employees with extensive education and training before they
would be ready to take on full-time employment in a typical
South Korean workplace. Kim said the North Koreans typically
do not understand the concept of overtime work. They often
call in sick and show up late, lack concern for productivity
and quality, and exhibit a general lack of honesty in their
dealings with others, he said. Kim said that there is also a
propensity for physical altercations among North Korean
refugees that often erupt over "trivial" matters. These were
all unique challenges that Merry Year would need to address
in order to keep the box company operating and to achieve the
broader goal of helping the North Koreans graduate beyond the
manual labor tasks associated with box making.

MAN CANNOT LIVE ON TOOTHPASTE ALONE
-----------------------------------

7. (U) Despite this long list of challenges, Kim said that
the North Koreans were genuinely interested in making a
living and saw the job at the box factory as an important
opportunity to help secure their future. According to Kim,
it took an average of two years after arriving in South Korea
before the North Korean refugees came to the realization that
they would need to find a permanent job to provide for their
needs. Many North Koreans were able to get by using
subsidies from the government but recent cut-backs and
changes in the nature of the subsidies have begun to change
the way North Koreans think about employment. (Note: The
Korean government now provides financial support for six
months plus a USD 15,000 stipend to North Koreans who have
maintained steady employment for a three-year period. In the
past, all North Koreans received financial support for an
entire year with no consideration of their employment status.
End Note.) North Korean refugee groups were often
recipients of donations (both cash and goods) from various
church and civic groups within South Korea. Kim described
the goods donated by these groups as only basic hygiene and
household items and generally lacking in food and nutritional
goods. Indicative of the aid provided by these groups, Kim
said that the North Koreans have begged Kim and other donors
to not give any more toothpaste as they typically already had
dozens of tubes from previous donations.

MERRY OUTLOOK FOR MERRY YEAR?
-----------------------------

8. (U) Director General Kim said that he expected it to take
at least a year and a half for the North Korean employees to
learn financial independence as well as the workplace skills
necessary to transfer to a typical South Korean business
environment. In addition to the structured work environment
at the box factory, scheduled to begin operations later this
month, Merry Year will also provide training sessions to
teach other basic business principles on a regular basis. In
addition to the 20 employees already slated to work at the
factory, Kim said they will plan to hire another 20 next
month with capacity for another ten at a future date.
According to Kim, the box factory will be self-supporting as
it is expected to earn about USD 3 million in revenues in the
first year. The CEO has already secured contracts to provide
a variety of packaging boxes for a number of companies
including the Seoul Milk Company.

9. (U) The employees will receive a salary equivalent to
approximately USD 1200 per month, well above the minimum wage
of USD 900. With additional incentives linked to production,
salaries could reach up to USD 2000 per month; more than
double the required minimum. Employees will also be provided
with a free lunch at the factory as well as free
transportation to and from work on a shuttle bus that will
depart from their home neighborhood. Kim said that he
expected word of mouth about the lucrative package of
compensation and benefits to increase interest among North
Koreans for future job openings. In the first round of
hiring, 82 candidates showed up for the initial briefing but
only 20 chose to accept a position and begin the training.
DG Kim said the sharp drop in interest was expected given
that most of the respondents did not know what to expect in
their first foray into the job market.

10. (U) Outside of Merry Year's efforts, Kim suggested that
the ROKG could also do more to support employment initiatives
for North Koreans. Even if the ROKG planned to rely mostly
on civic groups to provide the job training and employment
support activities, Kim said that the government should be
doing more to bring the various players together to better
coordinate their activities and share ideas. This idea,
along with other recommendations, was included in a report
that the Merry Year Foundation drafted and submitted to the
Ministry of Unification as a way of prompting the ROKG to get
more involved. Kim said that one reason the government was
not doing more was because of the ever increasing numbers of
North Koreans arriving in the South, adding that the ROKG has
not been able to build the internal capacity to adequately
support these new arrivals in a timely fashion.
VERSHBOW

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