Gov’t to Reject N. Korea`s `Excessive` Demands

The government yesterday rejected North Korea’s demand to retroactively pay 500 million U.S. dollars in rent and give drastic raises to North Korean workers at the Kaesong industrial complex in the North.

Pyongyang made the demands in the second working-level talks at the inter-Korean complex Thursday.

The ruling Grand National Party in Seoul said Seoul must not accept Pyongyang’s excessive demands.

“The North’s behavior is apparently intended to hold negotiations, but we cannot afford to accept many of the requests,” a senior Seoul official said. “Seoul can neither afford to accept Pyongyang’s demand for 500 million dollars in rent for properties in the complex nor should accept it.”

“Hyundai Asan Corp. and the (South) Korea Land Corp. in 2003 agreed with the North to lease industrial property for 16 million dollars in the complex in phase one of the project in return for use of the land for 50 years. This agreement cannot be revoked and the South has no money either.”

Another South Korean official said, “Paying 500 million dollars in cash to Pyongyang is also impossible because it runs counter to the international financial sanctions against the North.”

South Korean Unification Ministry vice spokesman Lee Jong-joo told a regular news briefing, “If the Kaesong industrial complex is to operate stably, its competitiveness must be sustained to allow South Korean companies operating there to continue business.”

“We will prepare for the next meeting set for Friday next week by adequately gathering opinions from South Korean companies operating in the complex and developers.”

The ruling party also urged the North to withdraw what it called unilateral and irrational demands. Party floor leader Ahn Sang-soo told a meeting of party leaders, “South Korean companies have no choice but to withdraw from the complex if North Korea insists on such demands. It seems the North wants South Korean companies to pull out.”

“North Korean authorities must know that a growing number of South Korean companies operating in the complex want to pull out since they can no longer afford to operate there.”

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