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SEOUL : South Korean firms operating in a Seoul-backed industrial estate in North Korea have accepted the North's demand to raise workers' wages by five percent, a spokesman said Saturday.
An umbrella association representing around 120 businesses operating in the Kaesong industrial estate agreed to the hike, the body's spokesman said.
The Kaesong project continues its perilous existence despite heightened tensions between the two Koreas following the sinking a South Korean warship in March.
Under the agreement, the monthly minimum wage of a North Korean worker will increase from 57.88 dollars per month to 60.78 dollars from August 1 until July 31, 2011, he said.
"In return for the pay raise, we call for greater rights to control North Korean workers and an increased supply of labour," the spokesman, Lee Im-Dong, told AFP.
The South Korean firms in Kaesong employ around 42,000 North Korean workers to produce labour-intensive goods such as garments and footwear, providing a key source of hard currency for the impoverished communist state.
Both Koreas have previously hailed Kaesong as the most important cross-border venture. The estate opened in 2004 as a result of the first inter-Korean summit four years earlier.
Tensions are high on the Korean peninsula after a South Korean warship, the Cheonan, was destroyed in March, claiming 46 lives.
South Korea accuses the North of torpedoing the ship, and in May suspended most trade with the North, banning its merchant ships from Seoul's waters, vowing to make it "pay a price".
Pyongyang denies any involvement in the sinking, accusing the conservative South Korean government of seeking to shift the blame in order to justify its hardline policy toward the North.
- AFP/ch
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