Posted July. 18, 2015 06:54,
The first inter-Korean dialogue in one year amid strained relations have failed to reach an agreement over the minimum wage for North Korean workers employed by South Korean companies operating at the joint industrial complex in the North Korean city of Kaesong. The North is attempting to arbitrarily operate the Kaesong Industrial Complex, disrespecting an agreement that the industrial park will be operated through bilateral consultations. Considering that Pak Chol Su, the chief North Korean delegate, said there would be no need to hold such talks in the future, an agreement is unlikely even if the two Koreas hold dialogue again. In the current relations, the two Koreas cannot even smoothly operate the Kaesong Industrial Complex, the only channel of communication between them, although the 70th anniversary of national liberation and division is less than a month away.
The two Koreas sat at the negotiating table for the first time in a year mainly to adjust the 5 percent ceiling of the minimum wage increase rate. Last November, the North unilaterally revised the labor rules for the Kaesong complex, saying that it would increase the minimum wage by nearly 4 U.S. dollars, or 5.18 percent, to 74 dollars on March 1. As the announcement escalated inter-Korean disputes, Pyongyang took a step back and said it would maintain the previous minimum wage until the two sides reach an agreement. At the latest meeting that began Thursday, the North adamantly insisted that the proposed minimum wage increase was a matter of North Korea`s sovereignty and thus unnegotiable. Then, the North avoided discussing in detail the South`s proposal to improve transportation, telecommunication and customs procedures at the complex.
North Korea has earned 375.4 million dollars from the Kaesong Industrial Complex over the last decade. The South Korea-China free trade agreement recognizes Kaesong-produced goods as South Korean-made, paving the way for the products` exports to China. Russia has also announced that it is ready to participate in the complex. If Pyongyang ignores previous agreements and tries to unilaterally operate the industrial park, however, who would invest in North Korea? Likewise, the North has unilaterally increased land rents for Chinese companies at the Rason special economic zone and curtailed the land lease period from 50 years to 20.
According to South Korea`s central Bank of Korea on Friday, North Korea`s economy grew 1.0 percent last year, achieving four consecutive years of expansion. As marketplaces have become active since the launch of the Kim Jong Un regime, elements of market economy are burgeoning similarly to the early stages of China`s opening. The food situation has also improved from the Kim Jong Il era. If Pyongyang gives up its nuclear program, it is possible for the North to achieve a rapid economic development the way China and Vietnam did. If the North wants to learn market economy and attract international investors through the Kaesong Industrial Complex, Pyongyang should change its attitude.