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NORTH KOREA NEWSLETTER NO. 118 (August 5, 2010)
*** INTER-KOREAN RELATIONS

S. Korean Firms in Kaesong Park Accept N. Korea's Request for Pay Raise

SEOUL (Yonhap) -- South Korean firms operating in a joint inter-Korean industrial park have accepted North Korea's demand to raise their North Korean workers' wages by 5 percent, the association of the companies said July 30.

   North Korea has asked for the pay raise for months, but the South Korean government has refused to negotiate, citing productivity and the competitiveness of the industrial complex.

   Seoul imposed travel restrictions on the Kaesong industrial complex just north of the Demilitarized Zone following the March 26 sinking of its navy ship that killed 46 sailors, which the South blamed on North Korea.

   An umbrella association representing some 120 businesses operating in the North's border town of Kaesong decided to accept the 5 percent wage raise, although rising inter-Korean tension endangers the operations of the approximately 4,300 companies that have factories in Kaesong or supply components to the joint industrial complex.

   As the association has made the decision, the Kaesong Industrial District Management Committee in Seoul will have to discuss the issue with its North Korean counterpart.

   If the wage raise is finalized, the monthly minimum wage of a North Korean worker will increase from US$57.88 to $60.78 from Aug. 1, 2010 to July 31, 2011.

   "In return for the pay raise, we will call for the personnel management of North Korean workers and a sufficient supply of labor," said the association.

   According to a poll of the 121 companies in the Kaesong complex conducted by the association, 74 percent of the respondents supported the 5 percent raise.

   The Kaesong park opened in 2004 as a result of the first inter-Korean summit four years earlier, and is the only venture still standing as a symbol of cross-border reconciliation efforts.

   About 120 South Korean firms in Kaesong employ some 42,000 North Korean workers to produce price-competitive goods by combining the South's capital with the North's cheap labor.

  
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South Korea Rejects Request by Civic Aid Group to Visit North Korea

SEOUL (Yonhap) -- South Korea has turned down a request to visit North Korea by an association of civic relief groups as tension persists between the two countries over the sinking of a South Korean warship, an official said on Aug. 2.

   The request was made by the Korea NGO Council for Cooperation with North Korea, which claims a membership of over 50 South Korean non-governmental organizations sending aid to the North. The group has been seeking to open an office in the North to monitor the distribution of aid donated by its members.

   Lee Jong-joo, spokeswoman for the South's Unification Ministry, said the government will not allow members to travel to North Korea for their trip that was scheduled for later this week because it would be "inappropriate."

   "It was judged that approving the visit would be inappropriate at this point of time," when punitive measures for the March 26 sinking of the Cheonan warship near the Koreas' Yellow Sea border are still in effect, she said in a briefing.

   North Korea denies any role in the sinking that claimed the lives of 46 South Korean sailors. The U.S. and South Korea have begun to hold a series of maritime drills in the East Sea to protest the sinking that they blamed on a North Korean submarine torpedo attack.

   Since the incident, South Korea has also stopped relief groups from sending aid to the North except on a handful of occasions.

   Lee said the government "reviewed opinions from related offices, the purpose of the visit and the overall inter-Korean relations" before turning down the request.

  (END)