Sunday, September 13, 2009

North Korea offers olive branch in form of scaled down concessions on Kaesong

It looked earlier this year as if the Kaesong Industrial Park was dead in the water, what with Pyongyang's demand for a quadrupling of wages and a thirty-fold increase on land use fees. But in the wake of angry protests by Seoul over a discharge of water by North Korea that killed six South Koreans, Pyongyang is backing off on its demands:
North Korea shocked South Korea in recent months when it demanded an effective quadrupling of the monthly wage for its 40,000 workers at the Kaesong industrial complex. The current average is $75; the North wanted an increase to $300.

South Korean managers said the demand threatened the profitability of 114 South Korean factories operating at Kaesong, a North Korean border town.

Then on Thursday, without explanation, North Korea scaled back its demand to 5 percent, Lee Jong-joo, a spokeswoman of the Unification Ministry in Seoul, said in a news briefing.

North Korea also did not repeat its earlier demand that South Korea increase its payments on a 50-year lease of the land at the Kaesong complex. The North wanted a new lease of $500 million, up from the current $16 million.

The Kaesong industrial park, where South Korean factories hire North Korean workers to produce goods like kitchen utensils, has served as the most prominent symbol of inter-Korean reconciliation. It also has provided the North with a much-needed source of hard currency.

North Korea began softening its stance on Kaesong last month by lifting restrictions on travel by trucks and workers between the complex and South Korea. It also released a South Korean worker at Kaesong who had been held for four and a half months on charges of denouncing the North Korean government.
There are some who see the Kaesong Industrial Park as South Korea implicating itself in North Korea's evil by exploiting what is essentially slave labor and providing cold hard cash to the murderous regime in Pyongyang. They were pleased to see this flawed experiment fail, and I doubt this news will make them happy.

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