S. Korean border province offers relocation help to Kaesong firms

SEOUL, June 28 (Yonhap) -- The governor of South Korea's Gyeonggi Province said
Sunday he will help companies operating at a North Korean industrial park to
relocate if they are forced to withdraw due to political tensions.
The remarks by Kim Moon-su came as South Korean businesses at the joint park,
located in the North Korean border town of Kaesong, faced increasing fiscal and
security concerns.
North Korea has demanded the South Korean firms pay wages and land fees that are
sharply higher than previously agreed. It is also holding a South Korean worker
incommunicado on charges of criticizing its political system.
Twenty four companies formerly based in Gyeonggi Province, which shares a border
with North Korea, relocated to Kaesong after it opened in 2004. Three of them now
want to return, the governor said in an interview with Yonhap News Agency.
"If they want, we will give them some space in our industrial parks," he said.
Kim said the central government should bear the foremost responsibility for any
pullout from the North Korean park and support withdrawing firms with its
inter-Korean cooperation fund, but added his province will "also come up with
supportive measures."
More than 100 South Korean firms operate at the joint park, employing about
40,000 North Korean workers. The companies are mostly small-sized firms producing
clothing, kitchenware, electronic equipment and other labor-intensive goods.
The industrial park is the last remaining cross-border project, an outcome of the
first inter-Korean summit between President Kim Dae-jung and North Korean leader
Kim Jong-il in 2000. Other joint ventures including tours to historic North
Korean sites were all suspended last year ties between the countries began to
fray.
The political tensions have taken a toll on the Kaesong park. North Korea
demanded in a government-level meeting last month that the South Korean firms
quadruple monthly wages for employees to US$300 from the current $70-80. It also
raised fees for 50-year development rights to $500 million, a massive jump from
the 16 million paid in 2004.
Adding to the tensions, a South Korean worker from Hyundai Asan Corp., the
developer of the joint park, was detained in March for "slandering" the North's
political system and has not been allowed to speak with officials from his
government.
The two Koreas are set to hold a third round of talks on the Kaesong complex on
July 2.
hkim@yna.co.kr
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