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SEOUL: North Korean workers at a South Korean-funded industrial complex have won their first pay rise in three years, bringing the basic monthly wage to 60 US dollars, officials said Friday.
The five per cent increase was the first rise since the Kaesong industrial complex opened in 2004 just north of the heavily fortified border. Seoul sees the complex as a way of educating its hardline communist neighbour about the market economy.
Representatives of South Korean companies had rejected the North's initial demand for a 15 per cent pay raise.
Under the new deal, the South's unification ministry said the workers, who put in a 48-hour week, will earn a total of 60.37 US dollars basic a month including insurance which accounts for five per cent of the total.
But they still will not get to see the money, which is paid to state officials. The officials, on average, return 15-20 per cent to the worker in North Korean won and the remainder in the form of food and other essentials.
Currently, 26 South Korean companies employ about 15,000 North Korean workers in Kaesong including construction and office workers.
South Korea predicts the number of workers will rise to more than 350,000 when the complex becomes fully operational by 2012.
Kaesong's supporters say it will narrow the huge economic gap between North and South, and could revitalise South Korea's small- and medium-size firms, especially textile companies struggling against cheaper Chinese labour.
But Human Rights Watch, in a report last year, said Kaesong fails to protect workers adequately.
It said labour conditions there represent an important step forward compared with the rest of North Korea, but the North Korean law governing the complex and some practices by South Korean firms operating there "still fall far short of international labour protection standards."
The US-based group said wage payments to North Korean officials rather than directly to workers violates the North's own law. - AFP/ac
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