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NORTH KOREA NEWSLETTEER NO. 175 (September 15, 2011)

All Headlines 10:41 September 15, 2011

*** FOREIGN TIPS

Minimum Wage at N. Korean Special Economic Zone Set at US$80

SEOUL (Yonhap) -- The minimum monthly wage for workers at a North Korean special economic zone has been set at US$80, a source familiar with the reclusive state said on Sept. 8, a small enough sum that could attract Chinese firms to invest there.

North Korea designated Rason as a special economic zone in 1991 with the aim of developing it into a regional transportation hub. Amid few signs of progress, the country broke ground in June on a joint project to develop it into an economic and trade zone with China. The northeastern port city borders both China and Russia.

"According to a booklet I obtained on the tax policy of the Rason economic and trade zone, the minimum monthly wage for workers is $80," said the source, who spoke on the condition of anonymity.

Under a North Korean law for the Rason economic zone, revised in January 2010, the minimum monthly wage for local employees at foreign firms is set jointly by the employer and the municipal authorities.

The amount is higher than the $63.814 recently set as the minimum wage for North Korean workers at the inter-Korean industrial park in Kaesong, the North's western city bordering South Korea, but less than the average salary of Chinese workers. According to the South's state-run Korea Trade-Investment Promotion Agency (KOTRA), Chinese workers are paid a minimum of $167 per month.

Experts say this wage gap could attract Chinese investors to Rason, as they have already started showing signs of relocating operations to Vietnam, Indonesia and other countries with cheaper labor than China.

The booklet also contains details of Rason's tax policy, including a five-year property tax exemption for buildings purchased through private funds and a corporate income tax rate of up to 14 percent, according to the source.

"The booklet was made by Rason's tax bureau in July-August to introduce foreigners to its tax policy," the source said.

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U.N. Humanitarian Chief to Visit North Korea in October

WASHINGTON (Yonhap) -- A top U.N. official in charge of humanitarian aid, Valerie Amos, plans to visit North Korea next month to assess the situation there, her office said on Sept. 8.

"It is true that plans are under way for Under-Secretary-General and Emergency Relief Coordinator Amos to visit North Korea from Oct. 17 to 21," Stephanie Bunker, spokeswoman for the U.N. office told Yonhap News Agency by phone.

It is to "get a firsthand look" at the humanitarian situation there, she added. North Korea is said to be in the grip of an acute food shortage.

It would be the first trip to the reclusive communist nation by Amos since she took up the current post a year ago, according to Bunker.

During her trip, the spokeswoman said, Amos will meet North Korean officials as well as representatives from U.N. agencies and nongovernmental organizations there.

Amos's office launched a US$218 million appeal for North Korea this year, but so far it has been less than 10 percent funded, according to Bunker.

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No positive Action Yet from N. Korea to Reopen Six-party Talks

SEOUL (Yonhap) -- North Korea has yet to take meaningful steps to re-start long-stalled six-party talks on its nuclear programs, South Korea's chief nuclear envoy said on Sept. 10 after a visit to the United States.

Wi Sung-lac met with Assistant Secretary of State Kurt Campbell and other senior U.S. officials to discuss the North's nuclear programs during his trip to Washington.

"There is no North Korean response yet, and South Korea and the United States are waiting," Wi told Yonhap News Agency by phone after arrival at Incheon International Airport.

North Korea calls for an early resumption of the talks without any pre-conditions but Seoul and Washington maintain that the socialist country should first prove in action before re-opening the forum that it will not renege again on its earlier promise to denuclearize.

Any such North Korean action could include the re-entry of U.N. nuclear monitors the country expelled at the height of the current nuclear crisis in 2002, Seoul officials said.

Wi said he has confirmed during the trip that the United States supports another round of inter-Korean nuclear talks. The nuclear envoys of the two Koreas met on the sidelines of a regional security conference in Indonesia in July for the first time in more than two years.

The inter-Korean nuclear talks paved the way for a rare high-level meeting between North Korea and the U.S. in New York later that month on nuclear and other issues pending between the two countries.

"I confirmed strong U.S. support for the second round of inter-Korean denuclearization talks," Wi said, adding that North Korea has shown no indication that it would go for another meeting with South Korea.

The envoy also said Washington was cautious about holding follow-up talks with North Korea.

The six-party talks, which involve the two Koreas, the U.S., China, Japan and Russia, were suspended in 2009 when North Korea walked out of it.

The stalled six-party talks were a major issue when North Korean leader Kim Jong-il met with Russian President Dmitry Medvedev in a Siberian city in August.

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U.S. Gov't Accuses N. Korea of Oppressing Religious Groups

WASHINGTON (Yonhap) -- North Korea shows no signs of addressing longstanding international concerns over its crackdown on religious activities, the U.S. State Department said on Sept. 13 in an annual report.

In an update to the International Religious Freedom Report, the department said the communist regime deals harshly with people who engage in religious practices it deems unacceptable, while using some state-sponsored religious organizations as a propaganda tool.

"The government of the Democratic Republic of North Korea continued to violate individuals' right to choose and practice their religious faiths," it said. "The government reportedly used authorized religious entities for external propaganda and political purposes and barred citizens from entering places of worship."

The department admitted that its findings on North Korea's stance on religion depends on claims by nongovernmental groups, defectors or refugees, due to its limited access to the reclusive nation.

The report, submitted to Congress, quoted them as saying that the North executed some people engaged in "religious activities such as proselytism and contact with foreigners" in recent years.

"Defector reports indicated the government increased its investigation, repression and persecution of unauthorized religious groups in recent years, but access to information on current conditions was limited," it added. "Reports from NGOs, refugees, defectors, and missionaries indicated that persons engaged in proselytizing or who had ties to overseas groups operating across the border in China, have been arrested and subjected to harsh punishment."

The department has designated North Korea as a "Country of Particular Concern" since 2001 under the International Religious Freedom Act for particularly severe violations of religious freedom.

"Some governments, such as Iran and North Korea, seek to control religious thought and expression as part of a more comprehensive determination to control all aspects of political and civic life," it said.

On South Korea, the report said the government "generally respected religious freedom in law and in practice."

But it gave detailed information on South Korea's punishment of those who refuse mandatory military service for religious beliefs.

"The law does not allow for conscientious objectors, who can receive a maximum three-year prison sentence," it said.

As of September 2010, there were 141 conscientious objector cases on appeal in the Supreme Court and nine cases before the Constitutional Court, two of which involved reservists, added the report, based on information from a civic group.

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China Agrees to Provide Power to N. Korea's Rason Economic Zone

SEOUL (Yonhap) -- China has agreed to provide electricity to a special economic zone in North Korea's northeast, a source said on Sept. 13.

The agreement to provide power to the Rason economic zone was signed between Jang Song-thaek, vice chairman of the North's powerful National Defense Commission, and China's Commerce Minister Chen Deming, during an economic meeting on June 8, the source said.

The source cited Chinese officials familiar with the project.

The project calls for laying high-voltage power distribution lines between the Chinese border city of Hunchun and the North's city of Rajin as well as building a thermal power plant in Rason, the source said.

Construction for the power lines is likely to begin soon while the two sides are in talks to work out details for the envisioned power plant, the source said.

"Power is an important infrastructure in developing the Rason special economic zone," said Cho Bong Hyun, an expert at the Seoul-based IBK Economic Research Institute. "China's agreement to provide power increases the chances of the zone's success."

The North designated Rason as a special economic zone in 1991 and has since striven to develop it into a regional transportation hub, though no major progress has been made.

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Russia to Write off 90 Percent of N. Korea Debt: Media Report

MOSCOW (Yonhap) -- Russia plans to write off most of the debt owed by North Korea as the North is struggling with dire economic situations, a Russian media report said on Sept. 14.

According to the report by the Russian newspaper Izvestiya, Russia will write off about 90 percent of debts worth US$11 billion owed by the North before the collapse of the Soviet Union in 1991.

Citing an unidentified official of Russia's finance ministry, the report said that the decision was reached after negotiations between Russia and North Korea resumed in June following a three-year hiatus.

Russia also proposed investing the remaining 10 percent of the debts in joint business projects to be launched in the North down the road. Pyongyang accepted the proposal, the report added.

The write-off decision is apparently based on the current dire economic conditions in the North, which still receives food and energy aid from Russia, according to local sources.

Russia's finance ministry declined to confirm the report but admitted that negotiations on the North's debt have resumed. It noted that a decision has yet to be made.

The report comes after North Korean leader Kim Jong-il visited Russia in August for talks with Russian President Dmitry Medvedev.

During the meeting, both reportedly discussed a project to build a pipeline to carry natural gas to South Korea via the North. Currently, the two nations are also in talks for other joint projects, such as building railway lines.
(END)

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