N. Korean KIC workers receive only 20% of wages

Lee Sang Yong  |  2016-02-16 16:32
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Amid reignited concerns on the appropriation of dollars paid to North Korea as wages for its workers at the inter-Korean Kaesong Industrial Complex [KIC], prompted by the zones closure last week, Daily NK has learned that the North Korean authorities have been skimming off 80% of the original sum before paying its workforce. 

Upon receiving funds from the South, the Central Special Development Guidance Bureau would hand it over, untouched, to above [the state], a source from Pyongyang close to this matter told Daily NK on Monday. Workers at the complex would receive their wages in North Korean money issued from the Central Bank. 

This information was confirmed by an additional source in Pyongyang. 

Official agreements, however, paint a much different--and far favorable-picture. Following a months-long dispute over wage hikes, the Koreas eventually reached a compromise in August 2015 to raise monthly wages for KICs North Koreans workers to 73.87 USD, which was still in effect until the industrial parks closure last week. Tack on compensation for overtime and special shifts, and this number amounts to roughly 150 USD, the source explained. 

But before any of these funds, in any currency, make their way to the workers, they must first pass through a convoluted path. Each South Korean company operating with the complex calculates their share of workers wages, withdraws the sum in dollars from a South Korean Woori Bank branch in Kaesong, and pays the Central Special Development Guidance Bureau, which promptly hands it in full over to the authorities. 

According to Daily NKs sources, up until the recent shuttering, North Korean KIC workers were receiving a monthly base wage of 200,000 KPW, with what the source described as a bonus 50,000 KPW. Paydays were also accompanied by strict orders warning the workers not to disclose any details about the payment system to anyone, including their own family members. 

When we consider that in Pyongyang 1 USD currently trades for 8,200 KPW, the injustice becomes even clearer. According to this rate, then, the 250,000 KPW eventually trickling down to the workers has been slashed to a mere 30 USD, or roughly 20% of the 150 USD they should be taking home. Tragically, this is still a considerable sum in a country where salaries paid to state-enterprise workers translate to less than 1 USD per month. 

And what of all the money siphoned off by the state? It funnels directly into Kim Jong Uns so-called revolutionary funds, which doubtless include the money spent on developing nuclear arms and missiles to bolster the might of the leadership, the source reported. The dollars earned from arms trade, mineral sales like iron ore,drug trade, and diplomat-smugglers are [for this same purpose] and not for use by individuals. 

Meanwhile, North Korean Kaesong workers have been told to "stand by" and have not gone to  work since February 10, the day before South Korean companies started pulling out of the complex. The source also confirmed that they have not yet been mobilized elsewhere. 

Not all workers are Kaesong residents, so I believe officials are still discussing where to place them, he said. Its not just a few workers were talking about; there are over 50,000 of them, so it looks like the authorities are going to take their time to try to think things through [about how to proceed]. 

While select officials mull over the fate of the workers, others are meanwhile said to be lecturing the suddenly jobless on the domestic version of the events precipitating the industrial parks shutdown. According to the source, the message repeated throughout the lectures claims, Our southern neighbors unilaterally pulled the plug on the complex, which directly violates the June 15 Joint Declaration. They are our enemies and can never be trusted. 

*Translated by Jiyeon Lee

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