South Korea to hold talks with North on Kaesong wage row

The Kaesong Industrial Complex. Established in 2003, it covers 3.3 million square meters and is occupied by 123 small South Korean factories which employ some 53,000 North Koreans.
The Kaesong Industrial Complex. Established in 2003, it covers 3.3 million square meters and is occupied by 123 small South Korean factories which employ some 53,000 North Koreans. PHOTO: ANDREW SALMON

SEOUL (AFP) - North Korea has agreed to hold talks with the South over a protracted wage dispute at the Kaesong joint industrial zone, Yonhap news agency reported Thursday.

The North had accepted an offer to hold talks next Thursday, it said, citing the unification ministry in Seoul.

The two sides have been mired in a months-long row over wages at the Kaesong estate, just 10 kilometres over the border in North Korea, with Pyongyang insisting on unilaterally imposing a pay rise for its workers.

Seoul had insisted that any wage change must be a joint decision.

The industrial estate, a joint enterprise between Pyongyang and Seoul, hosts around 120 South Korean firms employing some 53,000 North Korean workers.

The South Korean companies get cheap labour on top of preferential loans and tax breaks from their government, which also effectively underwrites their investment.

Kaesong opened in 2004 and had survived repeated inter-Korean crises that closed off every other avenue of cooperation.

But in 2013, the North effectively shut down the zone for five months by withdrawing its workers following a surge in military tensions. Many firms are still reeling from financial losses from the shutdown.

Kaesong is a key earner for the cash-strapped North. The hard currency wages are kept by the state, which passes on a fraction - in local currency - to the workers.