N. Korean KIC workers receive only 20% of wages

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 zone’s 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 KIC’s North Koreans workers to 73.87 USD, which was still in
effect until the industrial park’s 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

According to Daily NK’s 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 Un’s 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. “It’s
not just a few workers we’re 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 park’s
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.”