| Yup, when I think 'extortion' North Korea certainly comes to mind ... |
The Unification Ministry said North Korea demanded that workers' wages are raised from the current US$75, including social insurance, to $300 per month. Most of the wages already go to the regime, not the workers.
It also demanded $500 million in rent for 3.3 million sq. m land put aside for the first phase of the industrial park, for which Hyundai Asan and the Korea Land Corporation in 2004 already paid in $16 million for a 50-year lease. In addition, the North wants another $10 per 3.3 sq. m for 1.98 million sq. m land currently allotted to the industrial park a year from 2010.
An intelligence officer said, "If we pay $500 million in rent and increase the per capita wage to $300 per month, North Korea will earn $600 million to $700 million in cash this year alone. That's nearly 70 percent of North Korea's annual export volume of $900 million" as of 2007.
| Which is why the Norks want the money -- they have precious few other ways to generate that kind of revenue. Arms sales only can do so much, and the drug trade and counterfeiting apparently have hit their natural limits. The smart move for the South Koreans and the U.S. would be to walk away from Kaesong and make every effort possible to starve the Norks of cash. That could strain the Norks further and cause them to go to the Chinese, and that would give us a lever. |
Prof. Nam Ju-hong of Kyonggi University commented, "North Korea may want to close the Kaesong industrial park unilaterally, but it also has to be mindful of Chinese and other foreign investors who have money in the North. It is apparently attempting to choke off South Korean firms to make them leave of their own accord."
| I think it's more likely that they're playing chicken, hoping that the investors will strong-arm the SKor government into making concessions and upping the yearly ransom. However, President Lee seems to be made of stronger stuff, so maybe Kaesong really will close. |