Kaesong Move Threatens 200,000

On Monday, the authorities in Pyongyang declared that they would withdraw all North Korean workers from the Kaesong Industrial Complex (KIC). Not only is the move sure to have repercussions for both inter-Korean relations and many of the South Korean enterprises operating in the zone: it will also put the livelihoods of the North Korean workers and their families under great strain.

Currently, around 50,000 such workers are employed by enterprises in the KIC, meaning that, based on families of four, the livelihoods of approximately 200,000 people in the wider Kaesong region are directly or indirectly supported by it.

According to the South Korean government’s 2012 Unification White Paper, the monthly cost of each of these 50,000 workers is $134, a sum that includes overtime, insurance and bonuses. Notably, the North Korean authorities say that 45% of this sum is taken up by two de facto taxes, one levied at 15% and the other at 30%, but they claim the remaining 55% is passed on to the workers in the form of coupons and a small quantity of North Korean Won. It is impossible to verify whether this is the case.

Despite these levies, while workers in the KIC are not affluent by any means, when compared with those in many other regions of the country they can be said to enjoy comfortable lives. In particular, the snacks they receive, ‘Choco Pie’ and coffee mix sachets, are known to be a sought after perk. Currently, the former can be sold for around 2000 won in markets all over North Korea, while the latter sells for roughly half that price.

Thus, when added to the general situation in Kaesong, a city that lies in the heavily militarized area close to the inter-Korean border, meaning that trade and transportation are more difficult than elsewhere, the decision to withdraw all workers puts the lives of these 200,000 people in direct danger, and threatens to undermine the economy of Kaesong City.

Seo Jae Pyeong of NKnet explained more, telling Daily NK today, “The 50,000 workers will be unemployed so the 200,000 family members will suffer a serious hit. Kaesong workers had been making a more secure living than the people of many other areas prior to this, but the latest measure risks making beggars of them.”

“Are they going to give 200,000 people special distribution for the duration?” Seo went on to ask. “Kim Jong Eun is prioritizing his foreign policy interests, without any interest in the starvation of the people.”

Kang Mi Jin is a North Korean defector turned journalist who fled North Korea in 2009. She has a degree in economics and writes largely on marketization and economy-related issues for Daily NK. Questions about her articles can be directed to dailynkenglish@uni-media.net.