North Korea demands pay rise for factory park workers

By Lee Jae-won

PAJU, South Korea (Reuters) - North Korea on Thursday demanded a four-fold wage rise for its workers hired by South Korean firms at a factory park in the communist state.

The demand, made at talks held between officials from the rival Koreas, confirmed expectations that impoverished North Korea would try to squeeze more money out of the Kaesong project, one of the North's few sources of foreign currency.

In New York, the Security Council ended more than two weeks of discussions by agreeing on a draft resolution written by the United States expanding sanctions to punish the North for its May 25 nuclear test.

The draft resolution calls for the inspection of North Korean shipments suspected of violating an arms embargo. Arms sales are another major source of hard cash for the North.

North Korea has demanded wages of $300 (182 pounds) a month per person for about 40,000 workers employed in Kaesong, up from about $70 they are paid now, a South Korean official said.

The North also demanded a lease of $500 million over the 50 years that the firms will use the land, a more than 30-fold increase, the official said. The two sides will resume negotiations next Friday.

A South Koran fur coat maker became the first company to pull out of Kaesong when it applied this month for liquidation of its manufacturing operations there, citing declining orders from wary buyers and concerns about the security of its workers.

North Korea in May said it was cancelling all wage, rent and tax agreements at Kaesong in what analysts said was likely a bid to squeeze more money out of the nearly 100 South Korean companies at the park, about 70 km (45 miles) northwest of Seoul.