South Korea said 70 percent of the U.S. dollars paid
as wages and fees for the suspended Kaesong industrial project, run jointly
with the North, had been diverted for Pyongyang's weapons program and luxury
goods for leader Kim Jong Un.
It is the first formal acknowledgement by the South
that the 55,000 North Korean workers at the Kaesong complex saw little of the
$160 they were paid on average a month.
South Korea on Wednesday suspended the project as
punishment for the North's long-range rocket launch on Feb. 7 saying it would
no longer allow the funds paid to Kaesong to be used in the North's missile and
nuclear programs.
The North conducted its fourth nuclear test last
month.
The North called the South's move to suspend
operations "a declaration of war" and kicked out all South Korean
workers on Thursday and froze the assets of the South Korean firms.
"The wages for the North's workers and other
fees were paid in cash in U.S. dollars to the North's authorities and not to
the workers," South Korea's Unification Ministry said on Sunday.
"This is believed to be channeled in the same way as other foreign
currency it earned."
The cash is then kept and managed by the ruling
Workers' Party's Office 39 and other agencies, the ministry said. The ministry
said it had confirmed the movement of the money through various sources but did
not specify them.
Office 39 is widely believed to exist to finance the
luxurious lifestyle of the North's leader. The office is also believed to be
part of the North's agencies that fund the country's missile and nuclear
program.
The South Korean government and companies had
invested about 1 trillion won ($829 million) in Kaesong including 616 billion
won in cash since it opened more than a decade ago, Unification Minister Hong
Yong-pyo said on Wednesday.
Kaesong's North Korean workers were given a taste of
life in the South, working for the 124 mostly small and medium sized
manufacturers that operated there, about 54 km (34 miles) northwest of Seoul.
The minimum wage for North Korean workers was about
$70 a month, although the companies paid more than double that amount after
overtime and bonuses - still low compared with wages in the South.
The Kaesong project resulted from the first summit
meeting of the rival Koreas in 2000, where their leaders pledged reconciliation
and cooperation. It was the last remaining symbol of that effort in volatile
North-South relations over the years.
Kaesong had been shut only once before, for five
months in 2013, amid heightened tensions following North Korea's third nuclear
test, although its continuing existence often seemed tenuous.
Reuters
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