N.Korea Keeps Sending More Workers to Kaesong Complex

      May 17, 2011 13:03

      The number of North Korean workers at the Kaesong Industrial Complex has been growing even as Seoul halted all other trade with the North after deadly attacks on the Navy corvette Cheonan and Yeonpyeong Island last year.

      There were 46,420 North Korean workers at the industrial park at the end of February, up 11 percent from 42,415 a year ago, according to the Unification Ministry on Sunday. This represents a monthly increase of 334. The industrial park's output rose from $256.47 million in 2009 to US$323.32 million last year.

      A ministry official described the rise as "strange." "Though the number of North Korean workers at the complex has steadily increased since it went into operation in 2005, that couldn't have been the case last year given the circumstances," he said.

      The number of workers had risen in the past because some 20 to 30 new South Korean firms started operating there every year. But the government banned new investment in Kaesong as part of sanctions after the attacks last year, and no South Korean companies have set up shop there since.

      It may seem odd that the North is sending more workers to the complex despite its belligerent behavior, but it "has no other alternatives at the moment," a government official said.

      Since all other inter-Korean trade has been suspended, the Kaesong Industrial Complex is the sole window for the North to obtain a steady legal supply of hard cash. The monthly wage of workers at the complex averages at around $100, but they only see between 30 and 50 percent while the rest goes to the regime.

      "The workers get their wages in North Korean won or daily necessity coupons, and the North Korean authorities take all the dollars," said a North Korean source. That amounts to some $4.6 million every month.

      If the number of workers keeps increasing at the same rate, the North is expected to earn nearly $60 million this year. With the sources of hard currency exhausted, the North finds it profitable to assign even one more workers to the complex, but that also benefits the South Korean firms there. "North Korean worker wages are far more competitive than those in China and Southeast Asia," said a staffer with an apparel firm at the complex. "At present we employ 1,200 North Korean workers, and the more we employ, the more profit we can make."

      And Lee Im-dong, a former secretary-general of the businesses association at the complex, said, "We have asked the North Korean authorities for additional manpower of 20,000. As far as the Kaesong Industrial Complex is concerned, our interests completely coincide with those of North Korea."

      The supply of additional workers is not easy. The available labor force in Kaesong and vicinity was already exhausted several years ago, so there is even a joke that "all the healthy in Kaesong now work at the industrial park." The authorities have turned old buildings in Kaesong into boarding houses for workers recruited from Pyongyang, Pyongan and Hamgyong provinces, said the source.

      "The fact that the North is going extra mile to bring more workers to Kaesong shows how desperately it needs dollars," opined the Unification Ministry official.

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