(2nd LD) N. Korea sends more workers to Kaesong despite stalemate

(ATTN: UPDATES with latest data on number of local workers, quote from business
council on labor shortage)
By Kim Hyun
SEOUL, July 13 (Yonhap) -- North Korea has recently dispatched 700 new workers to
South Korean firms at an industrial park on its soil despite a stalemate in
government-level talks over the joint venture, businessmen said Monday.
But Seoul officials downplayed the significance of the move, saying a large
number of the newcomers were replacements, not reinforcements.
"There has been a constant labor shortage, and North Korea is meeting its
obligation," said Lee Im-dong, a staffer with the Kaesong Industrial Council that
represents the firms investing in the park in the North's border town of Kaesong.
As their output grew from US$14.9 million in 2005 to about $250 million last
year, the businesses demanded an increase in the workforce at the joint park. But
the North refused to fill the labor shortage, citing the South Korean
government's delay in carrying out its promise to build a dormitory for local
commuting workers.
A businessman who operates a clothing factory at the park said on condition of
anonymity that the latest dispatch brought 50 more workers to his factory that
now has 350, but the figure is still far short of his sought-after level of
1,000.
The latest move raises questions about the intentions of North Korea, which has
clouded the future of the last remaining inter-Korean venture with a demand for
steep wage and rent hikes there.
Unification Ministry spokesman Chun Hae-sung cautioned against reading too much
into the North's action, saying the newly-arrived workers were mostly replacing
those who have left as part of regular rotations or merely switching workplaces.
"The employees were deployed within the existing work force," he said.
The park now hosts 109 South Korean firms, mostly small clothing, kitchenware and
electronic equipment manufacturers employing some 40,255 North Koreans there,
according to the latest ministry data available.
Ministry officials could not say whether sending the workers meant North Korea
intends to continue to develop the joint park or was a face-saving measure
preceding another hardline action, such as expelling South Korean firms who
refuse to meet its demands on wage and rent hikes.
The joint park has been seen by outsiders as a rare source of hard cash for North
Korea's frail economy, providing more than $26 million in wages last year. Some
analysts say, however, that Pyongyang is willing to risk economic losses to drive
home its political messages.
Three rounds of government-level negotiations over the past month made no
progress, with the latest round held on July 2 ending without even scheduling the
next meeting. North Korea demanded payment for a 50-year lease be raised to $500
million, scrapping a 2004 contract in which South Korean developers paid $16
million.
Pyongyang also refused to allow access to a detained South Korean engineer. The
Hyundai Asan Corp. employee was taken into custody in March on accusations of
criticizing the North's political system and trying to persuade a local female
employee at the joint park to defect to the South.
hkim@yna.co.kr
(END)