al wages, and even classify the goods as made in South Korea:
South Korean managers say privately that North Koreans see only a tiny fraction of the amount stated in glossy handouts given to foreign visitors. Instead, the money goes to the North Korean agency that is responsible for hiring them.
The issue of how much the North Korean workers are paid is, as one manager puts it, “a delicate question” as South Korea negotiates with the United States for a free trade agreement.
Under the agreement, South Korea wants products made here in the Kaesong zone, just across the border from South Korea, to be classified as made in South Korea. The United States insists they’re made in North Korea and beyond the scope of the agreement.
The North, meanwhile, earns some foreign currency while maintaining its inflexible control over its population. (See also here, on a North Korean “labour camp” near Prague.)
So what’s touted as a breakthrough in North-South relations ends up combining some of the worst aspects of each. Joshua at The Korea Liberator sums it up pretty well:
[T]he theory behind Kaesong is that there is a higher social purpose for this Gulag of Tomorrow, where high tech meets low wage. The idea is that Kaesong’s seductive, corrupting power will be the harbinger of North Korea’s gradual reform toward prosperity, and perhaps even a relative degree of political liberalization. It’s a new variation on an old idea, although it was catchier in the original German: Arbeit Macht Frei.
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