North seeks $500 million for land use of Kaesong
Kim Young-tak, left, of the South Korean Unification Ministry, in Paju, Gyeonggi, yesterday before leading the South Korean delegation for talks with the North Korean delegation at the Kaesong Industrial Complex. By Kim Seong-ryong
The North’s position was made clear at the year’s second inter-Korean talks concerning Kaesong. More talks are scheduled for June 19.
North Korea insisted that the South pay $500 million to use the 330 hectares (815.4 acres) of land at the complex, according to Seoul’s Unification Ministry. South Korea paid $16 million for that very land in 2004 under an inter-Korean agreement.
Also, the North requested that the South raise the monthly wage for North Korean workers to around $300, up from the current $55. After that, the North is asking for wage increases of 10 to 20 percent a year. Under current agreements, wages cannot be raised by more than 5 percent annually.
But Kim Young-tak, a senior Unification Ministry official in charge of the inter-Korean talks, said the North left room for further discussions and negotiations on its demands. “I expect the two sides to reach a compromise after extended negotiations,” Kim said, after returning from Kaesong.
On April 21, in the year’s first inter-Korean meeting, North Korea made less specific demands on land use fees and wages. Then in May, North Korea unilaterally declared invalid all existing contracts and agreements on Kaesong.
But Kim said North Korea didn’t just force demands this time.
“North Korea said, ‘Here’s what we think. What about you?’” Kim explained. “We told them we needed to discuss [the wage issue] with our companies, and the North agreed there would be further talks on the matter.”
For South Korean companies operating in Kaesong, the relatively low wages for employees has given them a competitive edge. But if the Kaesong salary was raised to $300, companies said they might have little option but to close operations.
“We’d pay $300 per month to experienced labor workers or office workers in an advanced industrial zone in China,” said a head of a textile company who declined to be named. “Unless we can get the productivity that warrants such a big raise, then it’s just ridiculous.”
Only three days before the meeting, a South Korean company decided to withdraw from Kaesong, becoming the first South Korean firm to do so since the industrial zone opened in 2003. The move raised concerns that more companies could follow and put the future of Kaesong in doubt.
The company cited threats to the safety of its employees as the main reason and pointed to the detention of the South Korean worker as the triggering incident. The worker has been held in Kaesong since March 30 on charges of criticizing the North Korean regime and encouraging a female North Korean co-worker to defect.
South Korea has yet to be granted access to the worker and North Korea yesterday rejected the South’s call for his release.
Kim, the official who led the South Korean delegation, said, “All North Korea told us was that the worker was all well and good.”
The meeting convened at 10:40 a.m., 40 minutes later than scheduled. After adjourning at 11:30 a.m., the talks resumed at 3 p.m. and lasted another 40 minutes.
According to the Unification Ministry, the meeting began with South Korea calling for the release of the detained worker, followed by the North Korean delegation’s detailing its demands on Kaesong.
The first such meeting in April began nearly 12 hours late as the two sides wrangled over procedural details. Once under way, the meeting lasted only 22 minutes with the North asking the South to pay land use fees next year, four years earlier than stipulated, and to raise wages to “a realistic level.”
The Kaesong Industrial Complex opened in 2003 following the first-ever inter-Korean summit in 2000, but its future has come under cloud as relations deteriorate between the two Koreas.
By Yoo Jee-ho [jeeho@joongang.co.kr]
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)