The Ministry of Unification (MoU) reiterated that hard currency earned from the Kaesong Industrial Complex (KIC) is used for developing nuclear weapon and long-range missiles on Friday at a press briefing.
Minister of Unification Hong Yong-pyo told journalists that the government has the relevant materials to back up the concerns that the money, including wages, going into the KIC is used for weapons of mass destruction.
“Despite the concerns, (the South Korean government) tried to maintain the KIC, explaining its meaning in inter-Korean relations to international society. North Korea’s continuous provocations in recent days, however, are creating instability for our citizens,” Hong said.
Hong, however, declined to reveal the relevant evidence in public, citing “intelligence.”
“Approximate $540 million was wages, among the $560 million in total expenses, as of the end of last year,” an official from the ministry told NK News.
The minimum salary of KIC workers is $73.873 a month, which was agreed upon by the two Koreas last August. Including overtime wages, bonuses and social welfare fees, the average personnel expenses per worker amounted to around $164.50 a month, according to the MoU.
“The procedure after giving a dollar to the ‘general office’ is not known to us,” an MoU official said, adding that the ministry has not been informed about the next step.
Social welfare fees, which take up 15 percent of the salary, are directly collected by the North Korean governmental organization called the “general office (chongguk),” the Hankyoreh reported.
Experts suggested that between 60-70 percent of the money is given to the workers.
Another 30 percent is taken by North Korean state organization called the Kaesong City People’s Council and 70 percent is provided to workers, Kim Jin-hyang, who served at KIC Management Council from 2008-11, told YTN Radio on Thursday.
“About 60 percent of the money to the KIC is distributed to workers and some of the salary is paid by vouchers,” Kim Young-yoon, president of the Korea Logistics Forum told NK News.
The currency given to the workers is exchanged from dollars to North Korean won according to the official North Korean exchange rate, Lim Eul-chul, professor of University of North Korean Studies, told NK News.
“North Koreans prefer vouchers to hard money, as they can exchange goods with money,” said Lim.
But South Korean media outlet TV Chosun, a subsidiary of the conservative Chosun Ilbo newspaper, reported that only 10-20 percent of money is given to North Korean workers and funds from the KIC may be used to buy a “handbag” for Ri Sol Ju, Kim Jong Un’s wife.
“The organization in charge of foreign currency is Office 39 of the Workers’ Party of Korea, so it is reasonable to see that that all of the money goes into Office 39,” professor Kim Jeong-bong of Hanjoong University said, quoted by TV Chosun.
Lim disputed this argument, saying the MoU had reversed its previous position.
“Like other countries, North Korea uses some of the taxes for national defense expenditures. It is difficult to prove with confidence that some of them are used for nuclear weapons and missiles,” he said.
Kim echoed this remark.
“It is hard to completely ensure that none of the income is used for weaponry, but it’s insignificant, compared to the trade scale between North Korea and China.”
The total amount of money entering KIC amounted $100 million last year and the total value of production from the complex amounted to $515 million, according to the MoU. The total value of trade between China and North Korea was $7.6 billion in 2014, according to KOTRA.
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