Businesses operating in the Kaesong Industrial Complex (KIC) are undergoing severe financial hardship as orders have decreased since the complex re-opened in September, a source has revealed.
Kim Hyeon Seong (pseudonym), of a textile company, contacted Daily NK on the 10th. “Following the re-opening of the KIC, small and medium-sized businesses were in uncomfortable circumstances, but were reluctant to share this fact with the media. They are covering it up, as they are concerned that business may be impacted if word gets out,” he said.
“Operations became very difficult during the five months the complex was closed,” Kim continued. “To top it all off, buyers who had had their main supply interrupted cancelled their orders, or just didn’t place an order at all. This is harming an increasing number of businesses. Products cannot be securely delivered, so domestic buyers are going elsewhere.”
According to Kim, these circumstances have had a noticeable effect on production output, with a “tremendous decrease” in the current rate of operation.
“Of the 123 businesses at the complex, I know of two that are jumping ship and selling off. This will increase in future, too,” Kim added.
It was also acknowledged that the supplementary living allowance (60% of base pay) provided to those North Korean laborers currently out of work is burdensome.
“Although the complex started up again last September, business has not returned to its pre-shutdown level. Fixed fees must continue to be paid, and since there is not really any profit to be made, business owners are hemorrhaging funds.”
Mention was also made of the North Korean laborers; “15-20% of the pre-closure workforce has resigned. All the workers are aware that the complex shut down due to a souring of North-South relations.”
“There is a will to work,” Kim noted. “But it will take more than that to foster a conducive environment.”
