Archive for the ‘Labor conditions/wages’ Category

Umbrellas of Pyongyang (Update below)

Wednesday, August 19th, 2009

umbrellas.jpg

(click for larger version)

Traffic Control Platform beneath Umbrella Installed at Intersections of Pyongyang

Pyongyang, August 13 (KCNA) — Unique platforms under umbrellas are being set up in traffic control posts at intersections of Pyongyang these days, attracting attention of people.

The round platform under well-shaped large umbrella is clearly seen at far distance.

The umbrella shields the traffic controllers from sunrays and rain and the platform shuts out heat from the heated asphalt.

The female traffic controllers are commanding the traffic with a bright face on the platform under the umbrella even in the hottest period of summer.

Passers-by stop walking for a while to see the new scene.

They say it can be seen only in the country led by Kim Jong Il.

The traffic controllers are moved by the warm affection shown for them by General Secretary Kim Jong Il who saw to it that the platforms with umbrellas are being set up this time after raincoats, rain boots, sunglasses, gloves and cosmetics as well as seasonal uniforms were provided to them.

UPDATE: MarkT seems to have discovered similar technology (though much older) in Afghanistan:

afghanistan.jpg

Image from Military Photos

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DPRK restaurant in Dandong

Sunday, August 16th, 2009

China Daily reports on a North Korean restaurant in the Chinese border city of Dandong (hat tip to O.P.). According to the article:

Choe says she came to Dandong four months ago. Her restaurant is one of Dandong’s most luxurious and one of the few establishments in the Chinese city bordering the DPRK that is still seeing brisk business in the wake of Pyongyang’s nuclear test in May and subsequent missile launches.

The Korea Restaurant, is located near the only bridge linking Dandong and the DPRK, through which the Chinese army reached the DPRK and joined the Korean War in 1950. All of about 20 tables were full on the Saturday afternoon we visited recently, despite prices that are double that of common restaurants in Dandong serving the same food.

Some men from the DPRK in dark yellow or blue suits, with pins of DPRK leader on their chests, also dined there.

Choe’s colleagues, equally young and attractive, wait at tables in blue skirt suits and light makeup. They wear stylish, high-heeled shoes and watches, serving guests with smiles.

“The main reason for the restaurant’s good business is the DPRK waitresses. It’s the easiest way to meet people from that country,” said a taxi driver, surnamed Li.

“Though border trade has been slashed, more and more people are interested in the DPRK after the recent events. You can even see more Westerners here,” Li said.

Shan Jie, board chairman of the Dandong Federal Business Corp which runs cross-border trade, said the waitresses “are by no means common DPRK citizens”.

“They’re all children of DPRK cadres and graduates of Kim Il-sung University. They can speak Chinese, and are very talented in singing and dancing,” said Shan, who has conducted businesses with the DPRK for 16 years. Most of the DPRK cadres attend that university, he said.

The girls were sent to Dandong for training and will have “a promising future as civil servants” when going back home, Shan said.

“It’s a good opportunity for them to practice Chinese and meet Chinese people of all levels. Besides, they earn money for their country,” he said.

Pyongyang has many restaurants in Dandong, and many DPRK ministries such as the ministries of trade and security have their own restaurants there, Shan said.

Choe said the Korea Restaurant is of the same restaurant chain as Beijing Pyongyang Begonia Flower Restaurant, a famous luxury Korean restaurant said to be run by a DPRK merchant with a military background.

When asked whether she is the daughter of DPRK officials, Choe switched to speaking in Korean with a colleague before ending the conversation.

“The girls here mostly work for one and half years I’ll stay for about three years,” Choe said.

“Dandong is pretty and people here are quite nice. But I will go back to my country, Pyongyang is the most beautiful place in the world.”

If any readers in Dandong could help identify where these restaurants are, I would appreciate it.  I would like to mark them on Google Earth and Wikimapia.

Read the full article here:
DPRK waitress in China shares a day in her life
China Daily
Li Xiaokun and Wang Huazhong
8/14/2009

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DPRK eases Kaesong border crossing

Sunday, August 2nd, 2009

According to the Choson Ilbo:

The South’s Kaesong Industrial Complex Management Committee, which supervises the estate just north of the border, said Sunday visitors would no longer need to provide anything more than ID cards and travel permits.

Responding to complaints about inconvenience, the North agreed to allow the South’s office to process some paperwork on behalf of individuals.

“The extra documents were redundant because they carried exactly the same information as ID cards and travel permits,” the South’s office spokesman told AFP, adding the new rules would take effect from Monday.

Despite the easing of border controls, the fate of Kaesong remains uncertain because of the North’s demand for huge pay and rent increases, along with its holding of a Seoul worker.

Pyongyang detained the South Korean male worker on March 30 for allegedly criticising its political system and trying to incite a female North Korean worker to defect.

Kaesong, which opened in December 2004, is the last remaining large-scale reconciliation project between the communist North and the capitalist South.

Some 40,000 North Koreans work for South Korean firms in Kaesong.

Read previous Kaesong Industrial Zone posts here.

Read the full story here:
N.Korea agrees to streamline border crossing
AFP
8/2/2009

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Education and student labor in the DPRK

Friday, July 17th, 2009

The Daily NK has run a series of interesting articles on education in the DPRK.  I have posted interesting excerpts below:

The Warped Nature of Gifted Student Schooling
Daily NK
By Moon Sung Hwee,
7/17/2009    
 

The birth of education for the gifted generated a new social trend which placed great value on science. First senior middle schools grew out of that trend.

In first senior middle schools, students are educated in the natural sciences using high quality text books produced especially for the task.

Only the graduates of these schools can enter elite science universities such as Pyongsung-ri College of Science, Kangkye College of Defense or the elite KimChaek University of Technology. Since 1992, the first generation of graduates has been distinguishing itself in professional fields. Naturally, they have had a great affect on military and scientific technological developments.

Being a first middle school student is even an exemption from compulsory military service.

In addition to being a shelter from undesirable military obligations, as graduates from the school tend to work in better positions in society, the first senior middle school is a great path to a comfortable future.

However, powerful and wealthy parents lobby hard to get their children into a first middle school, and as a consequence what was supposed to be national education for gifted students has degenerated into a school for the children of the rich and politically powerful classes. To add insult to injury, as the numbers of elite first middle school graduates rises, the number of opportunities for other, general students falls even further.

And indeed, since the March of Tribulation in the mid-1990s, this discrimination has grown more and more serious, so now there is practically zero opportunity for average children to enter the first middle school at all, and therefore little chance to use their innate abilities to climb the social ladder.

This is because, during and after the March of Tribulation, ideological training, “[proletarian] class spirit education,” seriously distorted the system of gifted-student education.

Through this “(proletarian) class spirit education,” under the slogan, “Without the revolutionary and proletarian classes we cannot maintain the achievements of the revolution,” the authorities emphasized the need for the Juche Ideology to dominate society. The classes encouraged abhorrence of capitalists and the bourgeoisie via lessons about capitalist contradictions and the superiority of socialist system.

Since 1998, revolutionary education facilities for (proletarian) class spirit education have been built in every province, city, county and neighborhood. This has changed society markedly, because since the Kim Il Sung period, until the March of Tribulation, the only area of life where class or family background had not had an effect on an individual’s chances was education.

This has resulted in the concept of three classes and 51 groups in society, formed originally in the 1970s, being more rigorously applied: the core class (workers, former farm hands, party members, intellectuals educated after 1945, etc.); the unsettled class (traders, intellectuals educated before 1945, former Confucian scholars and etc.); and the hostile class (former rich farmers, former landlords, pro-Japanese factions, religious persons, criminals’ families, those who have been exiled etc.). The unfavorable classes and groups have since grown more sharply defined and discriminated against, with different classes receiving vastly different treatment.

This has cemented a hereditary social system, and the vicious cycle of family background and class being passed down to descendants has irrevocably formed. Of course, the standard for admission to a school is also class. Ability is no longer of any relevance whatsoever. Now, countless young minds just wither on the vine.

General students feel defeatist when evaluating themselves, thinking they are losers with no social footholds. Since they are not elite students, and are not of a favorable class background, their chances are vanishingly small.

So, what do such groups do? Well, parents in lower classes who would have used education to help their kids escape from poverty or an unstable class have developed an interest in other methods, beyond the school gates. Money.

Since they cannot change their family background, these parents and students have started to believe that they need to earn a great deal of money to be able to give their children a chance. Not a side effect the authorities had hoped for. 

Private Education Is Most Effective for Every Class
Daily NK
By Moon Sung Hwee
7/24/2009    
 

Since the devastation wrought by the March of Tribulation in the late 1990s, education in North Korea has been firmly on the back burner.

When state food distribution ceased, teachers either could not go to school or simply handed in their resignations, while starving children simply stopped attending school. Therefore, even the basic operation of schools was extremely difficult.

One Seoul-based defector, who used to be in charge of military recruitment, explained the situation vividly, “More than half the candidates for military service came to take their physical examination wearing no underwear during the March.”

A Starving Student Rarely Attends School

Children whose parents had starved to death started appearing in large numbers, wandering the streets. People called them “kotjebi.”

Among those parents lucky enough not to starve, very few in the poorer classes bothered educating their children at all, saying, “Since you can’t move up due to your social status, you don’t need to go school. The only things you need are the reading and arithmetic that are needed in the jangmadang.” This has generated a vicious circle of poverty which continues to this day.

Meanwhile, most children in the middle social classes did not go to school either, but to the markets to do what business they could.

Declining attendances in schools wreaked havoc, of course. Since 2000 the North Korean authorities have been trying to bring schools back to life by harshly punishing parents whose children do not come to school.

Nevertheless, even elite children with politically and financially sound family backgrounds have given up on school. However, their reason is different; their parents are dissatisfied with the poor standard of education in public schools, so they have shifted into the private education field.

In reality, schools are equipped with ageing facilities, suffer a severe lack of materials and receive little state investment, so effective education is all but impossible.

For example, since 1985 there has been a chapter on computers in mathematics text books, and computer education has been nominally on the curriculum. However, IT education is purely theoretical, because there are no computers in any but the First Middle Schools.

A Starving Teacher is not a Good Teacher

A teacher who is not able to live on his or her wages alone will always have difficulties paying attention to teaching students, and either the teacher, or the students, or both, will seek alternative ways to achieve their goals.

From the late 1980s, informal private education started to appear in North Korea for the first time, in the form of music lessons. At the time, those who used to work for art units started teaching the accordion or violin to senior school students.

However, a decisive turning point in bringing about a boom in private education was the appearance of DVD players. Since around 2005, DVD players have become almost a necessity for senior school students.

Households use legal educational DVDs produced by Education and Culture Broadcasting, which is publicly aired only in Pyongyang, and illegally copied ones which feature recorded lectures by First Senior Middle School teachers. It is more effective than public school education, because they can see well-edited lectures by good teachers, rather than attending half-hearted ones by the disillusioned teachers in the general school system.

This home-schooling method has spread widely, even extending to elementary students.

In March this year, during the enrollment period for elementary school, an unprecedented “freshmen enrollment notice” containing a list of children required to start school was stuck up in public areas. This was due to rapidly declining freshman enrollment.

North Korea Intellectuals Solidarity (NKIS) released the story on March 17, quoting a North Korean source as saying, “Such a notice is the first in North Korean history.” Additionally, the source reported, “Affluent people can educate their children privately with the money which they would have to provide to public school every month plus a bit more. Therefore, they will not send their children to school. Private math or physics tutors can earn up to 30,000 North Korean won per month, and music or art tutors as much as 50,000 won.” 

Student Labor Utliized in Every Field
Daily NK
By Moon Sung Hwee
7/28/2009    
 

As the Kim Jong Il period started in the 1980s, students became subject to many more kinds of unwelcome social mobilization.

For example, students were made to carry water from local rivers in order to build a skating rink every winter, and to take part in the construction of railroads, swimming pools and many other construction projects in their neighborhoods almost daily.

Farm support activities, the domain of third grade middle school students, have long been a conventional method of exploiting North Korean child labor. Every spring the kids have to build seedbeds of corn, transplant rice for more than ten days in summer and then help bring in the harvest for a full month in fall.

They are made to harvest crops until late in the evening, while five or six students are put up in each farmer’s house for the duration. In summer, schools give the students ten days vacation, in which they are ordered to collect fresh bracken and other wild plants.

The authorities in cities and towns periodically mobilize students and factory workers to repair railroads or roads as well. Sunday, the only official day-off in North Korea, is now a day for mobilizing students instead.

Since social mobilization comes frequently, students are often far from their studies, so teachers simply devote themselves to the maintenance of schools.

Since the March of Tribulation in the late 1990s, the atmosphere in the education sector has changed a lot. Since that time, the authorities have found it difficult to push students into social mobilization, since they can’t even afford lunch, or to manage schools, because the number of those who are willing to give up their chance of an education has drastically increased.

A source from Hoiryeong, North Pyongan Province reported recently that the percentage of students who go to school is now 62 percent, according to a recent report from the education department of Hoiryeong’s municipal Party Committee.

Absence from school is more serious on Saturday than on any other day because there are weekly evaluation meetings on the students’ daily lives, and several other onerous and to-be-avoided tasks like the offering of rabbit furs or metal scraps.

Meanwhile, the North Korean authorities have been focusing on inspiring student loyalty to the ongoing 150-Day Battle, but the result has been quite the opposite.

In 1980, the first work on the daily student routine was a “Sincerity Task;” cleaning up the surroundings of the local Kim Il Sung statue, portraits and the like. Students naturally addressed the task with care and diligence.

However, the number of students seen even doing such things has decreased markedly since the early 1990s, let alone doing it well. Moreover, students who are prepared to undertake such tasks are branded “brown noses.”

One recent example can be found in Hyesan: in advance of the anniversary of Kim Il Sung’s death on July 8, the authorities mobilized local students to clean up the Bocheonbo Battle Monument. Yet, on one of the allocated days only a few students turned up, while on other days there was no one there at all, according to our source. 

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DPRK continues to supply new laborers to KIC

Thursday, July 16th, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-7-15-1
7/15/2009

Despite the fact that inter-Korean relations continue to be stalled, North Korea authorities reportedly provided approximately 1,300 new workers in June for businesses entering the Kaesong Industrial Complex (KIC). Despite the fact that there has been no progress in inter-Korean working-level talks between authorities involved in the KIC, the North is continuing to provide a labor force for South Korean businesses in the complex.

An official from the Kaesong Industrial District Management Committee verified that “approximately 1,300 new laborers were supplied last month,” and that “there are some young workers, as well, but the majority are 30 to 40-year-old women.” The official also explained, “the number of laborers was reduced slightly at the beginning of the year; while [their number] was insufficient, laborers continue to come…up until June of this year, while the number fluctuated, an average of around 700 per month [were provided].” Last year, the number of new workers each month was around 1,000.

New workers continue to be provided to the KIC, but there has also been a sharp increase in the number of workers quitting or being removed from their positions. At the end of June, there were 40,255 North Korean laborers; the overall number of workers provided by the North has only increased by 1,324 since the end of last year.

The source explained that at the beginning of 2009, more than 2000 construction workers quit. It appears, according to the numerous reports on the status of employment in the KIC, that the supply of workers is still insufficient, but that the North Korean authorities are working as hard as possible to provide what manpower they can.

North Korea’s Central Special Zone Development Guidance General Bureau recently held a general assembly for all North Korean labor representatives, and ordered them to “work to the max” in order to alleviate all complaints by South Korean businesses. However, as there has still been no resolution to the issue of constructing additional dormitories for the workers, this issue will continue to restrict growth in the number of North Korean laborers, regardless of the attitude in Pyongyang.

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North Korea, 1949

Thursday, April 30th, 2009

Anna Louise Strong (November 24, 1885 – March 29, 1970) was a twentieth-century American journalist and activist best known for her reporting on and support for communist movements in the Soviet Union and the People’s Republic of China.

In 1949 she wrote a pamphlet for Soviet Russia Today titled, “In North Korea: First Eye-Witness Report” (Many will be familiar with the DPRK equivalent, Korea Today, which has survived long enough to be published on the internet)

The text is relatively short, but since this is exam season, I will not get around to it for a couple of weeks.  Enjoy.

(hat tip Alina)

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Kaesong Update: Deteriorating relations and trade

Tuesday, April 28th, 2009

This week, The South Korean government announced that if the North unilaterally files formal charges against a detained South Korean worker it will reevaluate regulations for its citizens to enter the zone which would require each border crosser to obtain a written guarantee of his safety from Pyongyang before leaving South Korea.  Although the number of South Korean workers allowed to cross the DMZ was reduced after the North’s missile launch, this would effectively prevent South Korean managers from entering the Kaesong Zone and would likely bring an end to operations there.  According to Yonhap:

South Koreans may be barred from visiting North Korea if the communist country takes legal action against a Hyundai Asan employee who has been unlawfully detained by Pyongyang, a government source said Sunday.

The Hyundai employee, who works at the Kaesong Industrial Complex and is identified only by his family name of Yu, has been held for 28 days for allegedly criticizing Pyongyang’s political system and trying to lure a North Korean female worker to defect to the South.

The worker in his 40s has yet to be interviewed by South Korean authorities to determine the exact nature of the detention.

“Under the special arrangement governing the Kaesong complex, the two Koreas must reach an understanding on how to deal with serious offenses involving South Koreans (that carry punishments) exceeding warnings, fines and expulsions,” the source, who declined to be identified, said.

“If Pyongyang takes unilateral action to indict the worker, it will be a violation of the fundamental rules related to cross-border interactions and will compel Seoul to rethink its stance on allowing South Korean to visit the North,” the source stressed.

The bilateral agreement makes clear that Pyongyang should respect the rights of South Korean workers, dwellings and property in Kaesong and the special tourist region in Mount Kumgang on the east coast. The latter has been closed since the shooting death of a female tourist by North Korean guards last July.

He said that if protection for South Koreans nationals cannot be ensured, Seoul will be compelled to review its policies on allowing visits from scratch.

“If this is the case, even employees working at Kaesong will have to get individual, written permission from North Korea that they will not be detained,” the official said.

Such a move could effectively make it hard for South Koreans to go to North Korea, crippling normal operations at the complex just north of the demilitarized zone that separates the two countries.

As of March, 101 South Korean factories operated in the complex, employing about 39,000 North Korean workers. The Kaesong park opened in 2005 and produces labor-intensive goods such as clothing, kitchen wares and watches. (Yonhap)

Given the trajectory of North-South relations this year, it is no surprise that inter-Korean trade dropped 30% in March.  According to Yonhap:

Monthly trade between South and North Korea fell more than 30 percent on-year in March, as tensions ran high over South Korea-U.S. joint military exercise, government data showed Monday.

The two Koreas exchanged goods and services worth US$108.74 million over the last month, down 31.1 percent from $157.9 million in the same period in 2008, the data from the Unification Ministry said.

North Korea sealed the border three times in March, disrupting South Korean production in a joint industrial complex in the North’s border town of Kaesong. Pyongyang imposed the ban in retaliation against a joint military exercise South Korea staged with the United States from March 9 to 20 south of the border.

Pyongyang blasted the joint exercise as a rehearsal for a “second Korean War,” while the two allies say the annual drill is purely defensive.

More than 100 South Korean firms operate in the Kaesong industrial venture, just an hour’s drive from Seoul, joining their capital and technology with North Korea’s cheap but skilled labor.

North Korea demanded the South raise wages, pay fees for land use and revise existing contracts for the Kaesong venture during inter-Korean government talks last week, the first official dialogue in more than a year. Seoul is gathering opinion from South Korean firms and plans to respond to the North Korean demand as early as this week.

Hyundai Asan, which has seen a dramatic reversal of fortune in the last year, has launched a new tourism project to make up some of its lost revenue.  Unable to offer trips to Kaesong and Kumgangsan, they are still trying to capitalize on the mystery of the DPRK:

Hyundai Asan said its new programme includes one-day tours costing 46,000 won (34 dollars) per person to border areas at Paju and Yeoncheon, north of Seoul.

Two-day tours to the border area at Yanggu, 175 kilometres northeast of Seoul, and to Mount Sorak on the east coast, will cost 118,000 won.

“Along with trips to front-line fences, tourists will be allowed to see wildlife and other places which remained untouched for decades,” a Hyundai Asan official told AFP.

Visitors will not be allowed inside the DMZ itself.

Hyundai Asan said the new programme would help ease its financial woes, which began when a South Korean woman tourist was shot dead when she strayed into a military zone at Kumgang last July.

The Seoul government halted tours to Kumgang after the shooting, while Pyongyang barred the one-day tours to Kaesong city as relations worsened.

The company’s other major joint project, the joint industrial complex near Kaesong city, is also facing problems due to sour cross-border ties.

The communist North has expelled hundreds of South Korean staff and restricted access to the Seoul-funded complex.

On March 30 it detained a Hyundai Asan employee for allegedly criticising the North’s regime and trying to persuade a local woman worker to defect.

Read the full stories below:
Gov’t warns it can bar S. Koreans from visiting N. Korea
Yonhap
4/26/2009

Inter-Korean trade drops 30 percent in March during political tension
Yonhap
4/27/2009

South Korean firm to start tours along North Korea border
Channel News Asia
4/27/2009

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DPRK seeks to “renegotiate” Kaesong contracts

Wednesday, April 22nd, 2009

According to Yonhap (excerpts):

The two Koreas met Tuesday for their first government-level talks in more than a year, during which the North demanded negotiations begin on operational changes at the joint complex in its border town of Kaesong. Pyongyang said it will reconsider all “special benefits” that have been granted to South Korean firms, such as low wages for North Korean employees and free land use.

The proposed measure, if actualized, is expected to deal a serious blow to more than 100 South Korean firms in Kaesong, mostly small manufacturers producing garments, utensils, watches and other labor-intensive products and already struggling to survive the global economic downturn.

Under a contract signed between Hyundai and the North Korean government in 2000, South Korean firms pay their North Korean employees between US$70-$80 on average a month, but the wages are wired directly to North Korean government bank accounts. The annual wages last year amounted to $26 million, according to ministry data. About 39,000 cheap but skilled North Korean workers are employed there.

North Korea also said it will begin charging land fees starting next year. North Korea initially set a 10-year grace period on rent when the complex opened, allowing the South Korean firms to use its land in Kaesong for free until 2014.

The [South Korean Unification] minister criticized North Korea’s prolonged detention of a South Korean worker as “against justice.” Pyongyang officials did not answer questions about the Hyundai Asan employee during Tuesday’s talks, he said.

The inter-Korean talks opened after a half-day delay due to procedural disputes but lasted only 22 minutes, during which the two sides exchanged documents laying out their demands and positions.

Read the full story here:
S. Korea reviewing N. Korea’s call to revise industrial contracts: minister
Yonhap
4/22/2009

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Kaesong labor costs

Thursday, March 5th, 2009

Following up on a previous blog post, the Choson Ilbo informs us of the DPRK’s new policies designed to collect “back wages” for North Korean workers in the Kaesong Industrial Zone:

South Korean firms will be ordered to close down or pay fines if they delay pay for North Korean staff at the joint Kaesong Industrial Complex, North Korean authorities reportedly told the firms in November.

The Kaesong Industrial Council on Wednesday said North Korea last November notified South Korea’s Unification Ministry and the Kaesong Industrial Complex management committee of 27-point labor rules in the Kaesong Industrial Complex. Under the rules, South Korean firms will be fined up to US$2,000 if they delay a month’s pay and ordered to suspend operations for 10 days and pay an additional 300 percent of basic pay to staff who have worked for more than 24 hours without a break if they delay pay for two months.

The council worries that now firms in the Kaesong complex are receiving fewer orders due to the recession, they could face heavy costs if the rules are strictly applied.

A total of 93 South Korean firms are currently operating in Kaesong. They are paying about $75, including the minimum wage and social security, per month on average to each North Korean worker.

To get a better idea of the context of this story see a previous post here

The full article can be read here:
N.Korea Warned Kaesong Firms Over Staff Pay
Choson Ilbo
3/5/2009

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DPRK feeling some effects of global econ downturn

Sunday, March 1st, 2009

The global financial crisis/recession is affecting some of the DPRK’s most visible assets. 

The first example comes from the Kaesong Industrial Zone, where South Korean firms are obliged to pay North Korean workers’ wages in $US directly to the North Korean government.  Since the South Korean Won/$US exchange rate has risen significantly in recent months, companies in the Zone have seen their labor costs (denominated in $US) soar.  Since wages are fixed and firms are unable to lay off workers, some have responded by simply not paying wages—which does not affect the workers so much as it does the North Korean government’s finances, since it keeps most of the funds.

Quoting from Radio Free Asia:

Authorities in North Korea have warned South Korean companies in its Kaesong industrial area they must pay workers’ wages or face fines, as many investors begin to feel the effects of the economic downturn.

Lee Lim-dong, secretary general of the Committee of the Association of Enterprises Invested in the Kaesong Industrial Complex, said the issue of unpaid salaries was brought up late last year but had now become a formal demand.

“This time around, official notification was issued to all South Korean enterprises invested in Kaesong, through the Kaesong Industrial District Management Committee (KIDMC),” Lee said.

South Korean businesses invested in Kaesong have already incurred serious losses due to the depreciation of the South Korean won against the U.S. dollar, according to Kim Kyu Chol, head of the Forum for Inter-Korean Relations, a Seoul-based group monitoring inter-Korean business relations.

“They already have to spend 30-45 percent more on labor [because of this],” he said, adding that the lives of South Korean entrepreneurs in the Kaesong economic zone would now be even more difficult.

… 

According to Park Yong-man, director of Green Textile Co.—a South Korean company invested in Kaesong—“The official notification was sent to all South Korean companies in Kaesong on Feb. 10.”

Meanwhile, Kim said, one South Korean electroplating company had already failed to pay its North Korean workers for more than three months and had been suspended.

Seven South Korean companies in Kaesong are currently unable to pay their North Korean workers on time and will soon be in bigger trouble because of the new measures, Kim said.

South Korean companies operating in Kaesong are not allowed to recruit or dismiss North Korean staff directly, and North Korean authorities impose quotas of staffing numbers on them.

In early February, North Korean officials said that salaries of North Korean supervisors watching over the night shift at South Korean enterprises in Kaesong would have to increase by 200-300 percent, putting further pressure on labor costs.

And companies can be suspended from operations for failing to pay their employees for more than a month.

Kim said South Korean companies in Kaesong don’t need more supervisors or clerical workers, which the North Korean side has sought.

“They are already facing a managerial crisis, and a [demanded] 50 percent increase in the number of North Korean managerial staff is pushing it too hard,” he said, adding that South Korean enterprises would find this hard to accept.

Until recently, the Kaesong Industrial District Management Committee (KIDMC), a joint North-South panel overseeing the complex, was responsible for half of the U.S. $10 a month transportation allowance given to North Korean workers in Kaesong.

North Korea demanded as of Jan. 1 that South Korea Kaesong companies must now pay the entire cost.

Now hard bargaining can pay off sometimes, especially for North Korea, but with all that has happened in the Zone recently it seems as if the DPRK actually wants these businesses to leave.  The DPRK’s negotiators are smart enough to know that the pie is shrinking and they naturally want to protect their share, but unfortunately they don’t yet seem to appreciate that their actions will have serious ramifications on future investment in the Zone once the global economy turns the corner.

Example No. 2: Unfortunately, recent economic conditions have also reduced the number of South Korean tourists venturing abroad where they might enjoy diversions such as eating in a North Korean-owned restaurant.

Quoting from Japan Probe:

Ever since a North Korean government restaurant opened in Bangkok two years ago, the Japanese press have been regularly visiting the place with hidden cameras to catch a glimpse of its dinnertime performances. However, it has now been discovered that the restaurant recently went out of business.

Most of its business had come from South Korean tourists, but the weakening of the won and the decline in tourism to Thailand due to the airport protests seem to have dealt a death blow to the restaurant. Attempts to contact North Korea-run restaurants in Cambodia and Vietnam failed, suggesting that those restaurants may have also gone under. It has also been said that a similar North Korean restaurant in China has suffered a big drop in business.

Read the RFA article here:
North Korea Warning Over Labor
Radio Free Asia
J.W. Noh
9/26/2009

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