N. Korea unlikely to close Kaesong complex over wage row

North Korea is not likely to shut down an inter-Korean joint industrial park in the North due to a row over Pyongyang's unilateral wage hike, a South Korean businessman said Monday.

The two Koreas have been in dispute for over three months following the North's unilateral move to raise the minimum wage by 5.18 percent for about 53,000 North Korean workers at the Kaesong Industrial Complex at the border city of the same name.

In what may be a relief to the drawn-out row, the North accepted the South's tentative offer in late May to pay wages at the current level, but the talks over the more sensitive issue of a wage cap have not been held.

Jeong Gi-seob, chairman of the association of 124 South Korean small and medium-sized companies operating at the zone, said that they are facing business setbacks amid frayed inter-Korean relations and the wage row.

But he added that North Korea is not likely to suspend the operation of the factory zone due to the wage row, given that the project is a legacy of the father of the North's current leader, Kim Jong-un.

"The North seems to have a lot of complaints about the current development at the industrial zone," Jeong told a group of reporters. "But North Korea is not expected to close down the zone just because of the wage issue."

The joint industrial complex, which opened in 2004, is the last remaining symbol of inter-Korean reconciliation. It has served as a major revenue source for the cash-strapped communist North, while South Korea has utilized cheap but skilled North Korean laborers.

The operation of the complex has been highly affected by inter-Korean relations. The Seoul-Pyongyang ties have been strained since 2010, when the South imposed sanctions banning economic and cultural exchanges following the North's torpedoing of a South Korean warship and its shelling of a border island.

In April 2013, the North unilaterally shut down the industrial park for about four months, raising concerns about the viability of the factory zone. Four months later, the two Koreas decided to set up a joint committee in charge of running the industrial park.

Seoul has rejected Pyongyang's unilateral wage hike, saying it is in breach of a 2004 agreement that calls for the two sides to set wages through consultations. The wage hike cap has been set at 5 percent per year.

Touching on the talks on a wage cap, Jeong claimed that the South needs to show "flexibility" over the issue although the matter should be resolved through consultations by the two sides.

When it comes to the Middle East Respiratory Syndrome, Jeong said North Korea has "grave" concerns about the disease.

Concerns about the spread of the MERS virus are growing in the South as it has killed six South Koreans so far, while the number of those infected has increased to 87.

The communist country has been highly sensitive to the outbreak of contagious diseases due to its weak health care system. Last year, Pyongyang imposed an entry ban on foreign tourists for about five months due to concerns over the deadly Ebola virus.

"It is certain that the North has grave fears about the newly-found infectious disease," Jeong said, adding that North Korea had asked the South Korean firms at the zone to unveil measures to counter the Ebola virus last year.

"But there have been no requests from the North over MERS except for its recent demand for the supply of thermal scanners and masks," he added.

At the request of the North, South Korea on Monday installed three thermal scanners for those who move in and out of the complex to prevent the spread of the virus in the reclusive country.

The communist country still bristled at any criticism of its medical system, saying the South could not even contain the spread of MERS.

"Recently in the South, a respiratory infectious disease has been spreading rapidly and pushing people into extreme anxiety and fear," said a report carried by the Rodong Sinmun, the mouthpiece of the North's ruling Workers' Party. "Who are they slandering in such a situation?"

The paper also criticized South Korea's National Assembly speaker, Chung Ui-hwa, who cited the North's poor health care in proposing a bill for cross-border exchanges in health and medicine. (Yonhap)