Five Trillion Went Abroad as Overseas Remittances or Emigration Expenses

The money which flowed to other countries as overseas remittances or emigration expenses from January to April of 2004 exceeded five trillion won, which was an increase of more than twenty percent compared with the same period last year.

When taking the decreasing number of people who emigrate into account, it is analyzed that the larger amount of money than in the that past slipped out of Korea with higher speed was thanks to the wealthier classes’ lead.

According to statistics of international income and outgoing funds kept by the Bank of Korea (BOK) on May 30, “overseas payments as ordinary transfers” and “overseas payments as capital transfers” from January to April amounted to 4.5222 billion dollars. This was an increase of 21.1 percent compared with the same period last year, and it equals 5,270 billion won when converted to won by the average exchange rate of this period.

An executive of BOK, Chung Sam-yong, explained, “Remittances which were sent to relatives or families living in other countries take up most of overseas payments as ordinary transfers and emigrants’ expenses for emigration, and assets taken out by overseas Koreans take up most of overseas payments as capital transfers.”

Overseas payments as ordinary transfers from January to April amounted to 3,965.6 million dollars, which increased by 20.2 percent compared with the same period of last year’s 3,299.9 million dollars. Overseas payments as capital transfers were also increased by 28.2 percent from 434.3 million dollars of last year to 556.6 million dollars. Meanwhile, the money which flowed into Korea as ordinary or capital transfers during this period amounted to 2,902.7 million dollars, which increased by 16.2 percent compared with the same period in 2003.

Accordingly, the deficit of ordinary and capital transfers reached 1,619.5 million dollars, which increased by 31 percent compared with the same period of 2003’s 1,235.9 million dollars.

Bae Sang-gun, a researcher of the Korea Economic Research Institute (KERI) pointed out, “Even taking the expansion of the economy and the liberalization of foreign exchange into account, the increase in emigration expenses with the number of emigrants decreased implies that more of the wealthier classes are leaving Korea than before.”

The number of emigrants from January to April was 2,631, a decrease of 35.7 percent compared with the same period of 2003, which recorded 3,569.

Meanwhile, the Financial Supervisory Service (FSS) decided to carry out an inspection to examine whether money that slipped out of Korea was illegally invested into overseas real estate.

“When people at home acquire overseas real estate or golf membership cards, they should report that to the BOK,” said an executive of the FSS, Oh Gab-su, adding, “Yet there were no reports concerning acquisition of real estate, and the reports concerning golf membership cards reached only ten or more, so an inspection into the actual conditions is necessary.”

Joong-Hyun Park Chang-Won Kim sanjuck@donga.com changkim@donga.com