(5th LD) N. Korea demands steep wage, rent hikes at joint venture

(ATTN: MODIFIES lead to correct calculation)
By Kim Hyun
SEOUL, June 11 (Yonhap) -- North Korea on Thursday raised rents and demanded the
South more than quadruple wages for local employees at a joint park on its soil,
but left room for negotiation by setting a date for more talks, Seoul officials
said.
The inter-Korean talks held at the park in the North's border town of Kaesong
ended with no breakthrough over a detained South Korean worker, Unification
Ministry officials said. The two sides agreed to meet again on June 19.
"North Korea demanded the two sides reconsider its 'special favor' at the Kaesong
industrial park, in line with the changed inter-Korean relations and reality,"
ministry spokesman Chun Hae-sung said in a briefing.
Pyongyang claims that the joint park, an outcome of the 2000 inter-Korean summit,
is a special favor it granted to South Korean firms with low wages, rent and
taxes.
During the talks that lasted for about two hours, Seoul officials pressed for the
release of the Hyundai Asan Corp. worker, only identified by his family name Yu,
who was detained at the joint park in March for criticizing the North's political
system.
North Korea said Yu is "doing well" and told Seoul to wait, Kim Young-tak, head
of South Korea's 14-member delegation, told reporters as he returned through the
military demarcation line.
But North Korea still refused to allow access to the worker accused of a
"dishonest hostile act" against Pyongyang.
North Korea demanded that South Korean firms raise their average monthly wages
for North Korean workers to US$300 from the current $70~80 and guarantee an
annual increase of 10-20 percent from the current 5 percent, ministry officials
said.
Pyongyang also asked Seoul to increase the rent for the joint park to $500
million, they said. The 50-year rent contract was set at $16 million when the
park opened in 2004, to be paid by the South Korean developers, Hyundai Asan and
the state-run Korea Land Corp.
The talks were a follow-up to an April meeting -- the first government-level
dialogue in more than a year -- which broke down in less than half an hour, as
the two sides could not narrow differences.
The Kaesong venture, just an hour's drive from Seoul, is the last remaining
inter-Korean economic project to come out of the first inter-Korean summit in
2000. The park had grown steadily, and now hosts 106 South Korean firms producing
clothing, kitchenware, electronic equipment and other labor-intensive goods. More
than 40,000 North Koreans work there.
North Korea's new demands deepened already serious concerns about the joint park,
but Ok Sung-seok, chief of Nine Mode Co., a clothing company employing about 300
North Korean workers, said he believes North Korea left room for negotiation by
setting a date for more talks. The firms will meet on Friday to state their
position.
"North Korea was not saying, 'take it or leave it.' It set up the next talks, and
I believe there's room for negotiation, and there will be an agreement that we
can accept," Ok said.
A fur clothing company, Skin Net, said this week it will close its factory in the
North Korean park by the end of this month, citing the safety of its employees
and a decrease in sales.
The North last month declared all contracts regarding the joint park "null and
void," saying it will revise them, and that any South Korean firms that cannot
accept the new terms can leave.
hkim@yna.co.kr
(END)