N. Korean demands may undercut advantages of Kaesong complex: minister

(ATTN: MODIFIES lead, UDATES with details)
By Kim Hyun
SEOUL, April 28 (Yonhap) -- North Korea's demand for wage hikes at a joint
industrial complex may undermine the venture's business viability, South Korea's
minister said Tuesday, as Seoul was taking time to guage opinions before
responding to Pyongyang.
Unification Minister Hyun In-taek also said South Korea will bring up the issue
of its citizen detained by the North when the two sides meet again to review
contracts on the joint park.
"I agree with the view that should wages rise excessively or land charges soar,
the competitiveness of the Kaesong industrial complex will be substantially
reduced," Hyun said in a meeting with foreign correspondents in Seoul.
In government-level talks a week ago, North Korea complained that wages for its
workers hired by South Korean firms at the park -- between US$70 and $80 a month
-- are too low and need to be raised significantly. It also demanded that fees
for land used by those firms should be paid starting next year, four years ahead
of schedule.
Hyun said Seoul has yet to decide when to respond and with what position as it is
still weighing the position of South Korean firms operating at the park.
Cheap labor, free land use initially guaranteed until 2014 and a common language
had drawn more than 100 South Korean firms to the Kaesong park, just an hour's
drive from Seoul, over China and Southeast Asian states crowded by foreign
investors.
The companies, mostly small-sized firms producing garments, utensils, electronic
equipment and other labor-intensive products, currently employ about 39,000 North
Korean workers. Their combined output was worth US$250 million last year, with
$26 million in wages wired to North Korean government bank accounts.
"North Korea has raised these issues (of wages and land charges), so we have to
deal with them during negotiations to be held in the future," Hyun said.
North Korea will also have to respond to Seoul's calls to release the detained
worker if it wants to push the negotiations on wages forward, Hyun said.
In the previous talks -- the first government-level dialogue since the Lee
Myung-bak administration commenced in February last year -- North Korea refused
to discuss the matter of the detained South Korean, saying the meeting should
only deal with "issues related to the Kaesong industrial complex."
The employee of Hyundai Asan Corp., the developer of the joint park, was detained
by North Korean authorities in Kaesong on March 30 on charges of denouncing the
North's political regime and trying to tempt a local female employee to defect.
Seoul officials say North Korea refuses to grant access to the worker, identified
by his family name Yu and in his 40s, and insists he is healthy and in good
condition.
Concerns have mounted North Korea may try to hold him to increase its leverage in
negotiations over the Kaesong complex.
"Our government hasn't heard from North Korea any reason about why he has been
held and interrogated for a month, and we have not been able to meet him or
provide a legal representative for him. This is a very serious issue," Hyun said.
"The detention is unilateral and unreasonable," he said. "Our government sees
this as an issue that is fundamental to the Kaesong complex."
hkim@yna.co.kr
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