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North Korea Demands Huge Pay, Rent Increases at Industrial Complex


North Korea has presented South Korea with sharply elevated rent and wage demands for running a joint industrial facility just inside the North Korean border. At the same time, Pyongyang is refusing to release a detained executive it has held with no outside contact for more than two months.

North Korea said a South Korean executive who has been detained for more than two months is "doing well," but is still refusing the South any contact with him.

That word came after about two hours of working level talks Thursday between the two sides concerning the Kaesong Industrial Complex, a joint industrial zone in North Korea.

North Korea also made steep demands for more money to continue operating the zone, including a fourfold increase in workers' wages. South Korean Unification Ministry official Kim Young-tak headed Seoul's delegation.

He said the North made the wage demands considering the workers' productivity, and by looking at wage levels in other countries.

The Kaesong complex was conceived as a practical laboratory in reconciliation between the two Koreas, which remain technically at war. South Korean companies employ nearly 40,000 North Korean workers to make simple manufactured items, from sneakers to cookware.

North Korea's actions over the past year, however, have raised serious questions about the zone's viability. Pyongyang has on several occasions restricted access across the North-South border by suppliers of raw materials, and last month announced the nullification of wage and rent contracts there.

The North has also detained a South Korean who has helped manage the zone since March. The executive, known by his surname Yu, is accused of making inflammatory comments about the North Korean leadership and possibly encouraging a North Korean female worker to defect.

Kim said the South told the North the detainee is the "essential" issue facing the Kaesong complex,and expressed how much his family was worried about him. He says the North assured him Yu is in good condition.

The security concerns surrounding Yu's case led one South Korean clothing company to pull out of Kaesong this week. Analysts said safety fears and rising costs are creating the risk of a domino effect, in which companies pull out of the complex en masse.

The two Koreas agreed to talk again next Friday, June 19.
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