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Pyongyang drained 70% of Kaesong wages into weapons: Seoul

SEOUL — South Korea yesterday defended its decision to abruptly pull out of an inter-Korean industrial zone, claiming 70 per cent of wages for North Korean workers were used to fund Pyongyang’s nuclear and missile development for years.

SEOUL — South Korea yesterday defended its decision to abruptly pull out of an inter-Korean industrial zone, claiming 70 per cent of wages for North Korean workers were used to fund Pyongyang’s nuclear and missile development for years.

“Any foreign currency earned in North Korea is transferred to the Workers’ Party, where the money is used to develop nuclear weapons or missiles, or to purchase luxury goods,” said Unification Minister Hong Yong-pyo in a televised interview. “About 70 per cent of the United States dollars paid in wages are taken by the government, while the workers are only given tickets to buy food and other essential items, as well as some local currency.”

The Ministry did not detail how it arrived at that percentage.

Over the years, South Korean firms have paid wages worth US$560 million (S$783 million) — including US$120 million last year alone — to the North’s state authorities supervising 53,000 workers at the complex.

Seoul was aware of the problem but had maintained the project regardless, because of its status as a symbol of inter-Korean cooperation, said Mr Hong. “But the project continued to siphon off so much money (to the North’s regime), and the concerns we had about the complex remained unsolved,” he added.

The Kaesong industrial zone, which sits 10km north of the border between the two sides, was officially shuttered last Thursday after North Korea expelled all South Korean managers and placed the complex under military control.

The move came a day after Seoul announced that it would withdraw from the industrial complex — where South Korean firms operated factories that employed North Korean workers — to punish Pyongyang for its latest nuclear and missile tests staged in violation of United Nations resolutions.

The isolated North staged its fourth atomic test on Jan 6 and weeks later put a satellite into orbit with a rocket launch that most of the wider international community condemned as a disguised ballistic missile test.

The shock shutdown of the complex — a major symbol of inter-Korean cooperation since opening in 2004 — sharply escalated tensions and caused massive damage to the 124 South Korean firms operating there.

Born out of the “sunshine” reconciliation policy of the South’s government in the late 1990s, Kaesong had remained largely immune to turbulent inter-Korean relations. The last time the park was closed was in 2013 during a period of heightened cross-border tensions, when Pyongyang effectively shut down the zone for five months by withdrawing its workers. AFP

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