KAESONG, North Korea, May 24 (UPI) -- Can a small capitalist enclave in North Korea become a stronghold used to spread market elements in the reclusive communist country?
A total of 14,752 North Korean workers, mostly women in their 20s and 30s, are now working for 23 South Korean factories at the sealed-off joint industrial complex in the North Korean border city of Kaesong, a testing ground for mixing the North's cheap labor and the South's capitalism and technology. The number of North Korean employees is expected to reach more than 300,000 by 2020, working for 2,000 South Korean factories in the complex, according to the authorities.
North Korean workers are mingling with South Korean managers every day, mostly commuting from Seoul. They are often told about South Korean culture and lifestyle.
"Many North Koreans are hoping to work in the Kaesong industrial zone because of good working conditions and high wages," said Kim Dong-keun, the South Korean head of the Kaesong Industrial Complex Management Committee comprised of North and South Korean officials.
"The Kaesong project is providing expectations of a better life for North Korean workers," he said, noting the living standard of Kaesong workers is much higher than those in other areas of the country.
A North Korean worker at Kaesong was paid an average $68.10 per month for a 55.1-hour working week last year, including $7.80 for social insurance for state-provided residence and healthcare, and overtime pay. Under the regulations on management of the complex, which was agreed upon between the two Koreas in 2003, North Korean workers earn $57.50 a month for a 48-hour working week. The minimum monthly wage is $50 per employee.
The North has recently demanded a 30 percent wage increase for university graduates working at the complex and a 10 percent salary increase for two-year college graduates, in an apparent bid to earn much-needed cash. Some 20 percent of Kaesong workers are college or university graduates.
"The North has come to know the power of the dollar," said a South Korean investor at the complex who wished to remain anonymous.
Wages are not paid directly to the workers, but instead go to the North Korean authorities. In May 2006, Jay Lefkowitz, the top U.S. official for human rights in North Korea, raised concerns about possible worker exploitation at the complex and alleged that much of the wages might go into the pockets of North Korea's ruling elite.
According to the management committee, 20 percent of the salary is paid in cash and 80 percent is paid in coupons for food and other daily necessities.
"Payment in coupons seems better than cash for North Korean workers because the country is facing chronic shortages of food and daily necessities," Kim said.
According to sources, North Korean workers at the complex received 7,000 North Korean won in cash and coupons on average a month last year, much higher than a North Korean's average monthly salary of 2,000 to 3,000 won. The country's official exchange rate is 141 won to the dollar, but $1 buys some 3,000 won on the North's black market due to tremendous inflation since the country embraced an economic reform package in 2002.
"Kaesong workers are better off and that's why many North Koreans want to work in the complex," said another official at the management committee.
But North Korean workers at the complex deny they have a higher standard of living. "There is no difference in living conditions after working here," said Pak Gong Il, a North Korean worker at Romanson, a South Korean watch-maker that employs 1,000 North Korean workers in its factory in the complex.
Pak said he joined the complex a year ago after working at the North's state-run watch factory in Kaesong city.
"I am just working here because I believe this complex would help North-South economic cooperation and promote unification," said a female worker who was using a sewing machine to attach brand names to fabrics at an apparel factory, with a blaring song in the background that praised the North's founding leader Kim Il Sung's "revolutionary" activities against Japan's 1910-45 colonial rule.
The North's authorities are believed to select Kaesong complex workers on the basis of songbun, or hereditary background, and put them through ideological indoctrination programs to prevent the influx of capitalist culture. But such strict ideological screening is hardly possible if the number of North Korean workers at the complex is to reach the hundreds of thousands.
Many analysts in Seoul expect the border city of Kaesong to serve as a window to the capitalist world for communist North Korea.
"The Kaesong complex can serve as a center for North Koreans to learn market economy," said Koh Yu-hwan, a North Korea specialist at Dongguk University in Seoul. "As North Korea has opened the site to South Korean capital, it is a matter of time that it would spill over the rest of the North."
