Mick Hartley

From the Times, on the Kaesong industrial complex, located just north of the de-militarised zone between the two Koreas:

Seoul considers this to be the blueprint for future economic relations between two nations who have been divided since the 1950-53 Korean War and are technically still at war.

Others see it as a solution for businesses from the South who want nothing more than low-cost labour to produce cheap goods, and have no interest in improving relations between the two countries. […]

Fifteen South Korean factories are established in this enclave of capitalism, which covers 25 acres. About 6,000 North Korean workers labour under South Korean management, producing pots, footwear and textiles for the southern market. The future vision is grander: by 2012, the zone plans to expand to 160,000 acres, becoming a regional hub marrying southern capital with the skills of 700,000 cheap northern laborers.

Standing amid a vast, dusty plain of excavated ground, it includes a bank, a convenience store and accommodation for the 500 South Koreans who currently work here — and for which they receive a 50 per cent hardship bonus. […]

“The North Korean workers are very diligent, with high manual skills,” said Kim Dong Keun, the president of the complex’s industrial district management committee. “Their productivity level is, on average, 80 per cent that of South Korean counterparts.”

The monthly wage paid to northern workers is £31, one twentieth of what employers pay in the South. The only currency used in the complex is US dollars.

Barbara Demick, of the LA Times, was on the same journalists’ tour (via):

North Korean patriotic music in praise of Kim blares over the loudspeakers of a futuristic warehouse where North Korean women in crisp blue uniforms stitch athletic shoes using brand-new sewing machines.

The monthly salaries of $57.50 for each North Korean worker — regardless of position — are paid directly to the North Korean government, which in turn gives the workers about $8, more than double the average monthly salary. South Korean companies have asked repeatedly to pay the workers directly and to give bonuses for better work, but have been refused.

Even New Year’s gifts such as extra food and warm clothing could be given only after elaborate negotiations to make sure everybody was getting the same.

South Koreans, many of whom live for weeks at a time in modular housing in the complex, have their own cafeteria and their own medical clinic, all off limits to the North Koreans.

Last year, articles appeared in the South Korean press about a purported Romeo and Juliet romance between a North Korean woman and a South Korean man. But people at Kaesong said the story was apocryphal because the North Korean women are never alone.

“They even go to the toilets in pairs,” said a South Korean employee who asked not to be quoted by name. “There are big social differences between us. There is no sense of the individual in North Korea.”

So, this “jewel in the crown of co-operation between the capitalist South and the communist North” is in effect a slave labour camp, where South Korean companies can pay minimal wages, and even classify the goods as made in South Korea:

South Korean managers say privately that North Koreans see only a tiny fraction of the amount stated in glossy handouts given to foreign visitors. Instead, the money goes to the North Korean agency that is responsible for hiring them.

The issue of how much the North Korean workers are paid is, as one manager puts it, “a delicate question” as South Korea negotiates with the United States for a free trade agreement.

Under the agreement, South Korea wants products made here in the Kaesong zone, just across the border from South Korea, to be classified as made in South Korea. The United States insists they’re made in North Korea and beyond the scope of the agreement.

The North, meanwhile, earns some foreign currency while maintaining its inflexible control over its population. (See also here, on a North Korean “labour camp” near Prague.)

So what’s touted as a breakthrough in North-South relations ends up combining some of the worst aspects of each. Joshua at The Korea Liberator sums it up pretty well:

[T]he theory behind Kaesong is that there is a higher social purpose for this Gulag of Tomorrow, where high tech meets low wage. The idea is that Kaesong’s seductive, corrupting power will be the harbinger of North Korea’s gradual reform toward prosperity, and perhaps even a relative degree of political liberalization. It’s a new variation on an old idea, although it was catchier in the original German: Arbeit Macht Frei.