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Tourism with a North Korean
twist
By Andrei Lankov
This
month, Hyundai Asan Corp stated that the number of
tourists to have visited the Kumgang Mountain
Tourist Project in North Korea since it began
operations in 1998 had finally reached one
million. This is seen as a reason for some major
celebration - as any sufficiently round figure
would.
However, in January 1999 Hyundai
Asan leaders assured that by the end of 2004,
there would have been an accumulative 4.9 million
visits to the North. The actual figure was about
900,000. At the same time, Hyundai Asan managers
predicted that in 2004 alone some 1.2 million
tourists would visit the project. Yet the actual
number of visits that year was 274,000.
Does this mean the Kumgang project is a
failure? Not quite, since it remains in operation
- unlike many other much-trumpeted intra-Korean
projects. But it is kept afloat only due to
persistent political and financial support from
the South Korean government (or, in other words,
due to the deepness of the pockets of South Korean
taxpayers). Within its short history, the project
has been on the verge of bankruptcy, and has even
seen its chief executive officer driven to
suicide.
The project was conceived in
1989, when Chung Ju-yung, the founder of Hyundai
Group, spent a week in North Korea negotiating
with the Pyongyang leaders, including president
Kim Il-sung himself. The chairman of Korea's
largest industrial conglomerate was born in what
is now North Korea, and in last years of his long
and eventful life he demonstrated a sentimental
attachment to his native land, being the most
enthusiastic proponent of South Korean investment
in the North.
One of the schemes briefly
discussed during his 1989 visit was the idea of
setting up a large tourist park in North Korea, to
be used by South Korean tourists. The park was to
be located in the Kumgang ("Diamond") mountains,
which for centuries have been seen in Korean
culture as an embodiment of scenic beauty. The
mountains conveniently lay near the Demilitarized
Zone, or DMZ, the border between the two Korean
states.
However, it took a decade and some
major political changes to start the project
moving. By the mid-1990s, Seoul realized that the
collapse of North Korea was both unlikely and
undesirable, since a German-style unification
would be prohibitively costly. Hence, investment
to the North and all kinds of direct and indirect
aid came to be seen as a necessity by the new
left-leaning administration of president Kim
Dae-jung, who was elected in 1997.
That
meant Chung Ju-yung's plans received government
support. He moved ahead with his characteristic
energy, and in November 1998, the Kumgang project
began to operate.
The idea was simple. The
North Koreans agreed to create a sort of ghetto
for South Korean visitors. A part of the Kumgang
mountains was fenced off, with all the local
population moved away. The South Korean tourists
took a cruise ship to the area. The ship moored in
a local harbor while the visitors ventured out for
mountain walks and sight-seeing. Typically, a tour
lasted for four days and three nights, and
tourists lived onboard the cruise ship, which
doubled as a floating hotel.
This clever
scheme solved the problem of information flow,
which was seen by Pyongyang as the major obstacle
in its interactions with the South. North Korean
commoners are supposed to believe that their South
Korean brethren suffer under the cruel yoke of US
imperialists. Understandably, their government
does not want them to know that the per capita
gross national project (GNP) in South Korea is 20
to 30 times higher than in the North. The sight of
well-dressed South Korean crowds would be damaging
for public morale and even political stability,
but in the tourist scheme the rich southerners
could be kept out of sight of average North
Koreans, being accompanied only by a handful of
carefully selected minders.
The South
Korean visitors also had to behave themselves.
They were warned that they could not criticize the
North Korean system and its leaders, and that, in
general, talking politics with North Korean
personnel was not advisable. Transgressions could
be punished.
In June 1999, Min Yong-mi, a
35-year-old housewife from Seoul, was engaged in
talks with a North Korean minder. She told him a
few words about South Korean prosperity and said
something to the effect that North Korean
defectors in the South were doing well. The
reaction was swift: the talkative lady was
arrested and spent one week in detention, accused
of espionage. Of course she was not put into a
real prison, but the ordeal was tough enough to
undermine her health. There are good reasons to
suspect that the entire affair was a deliberate
provocation: the North Korean authorities were
waited for something like this to happen to
demonstrate that no quasi-political activities
would be tolerated. They wanted to make an example
of Min, and they generally succeeded: since then,
tourists have become far more cautious.
Moneywise, the North Koreans were doing
very well, too. The Hyundai Group built all the
necessary infrastructure (presumably including the
fences to keep the South Korean visitors under
control), and also paid US$12 million every month
as a fee for the use of the area. Some additional
income was earned by North Korea through the sale
of grossly overpriced local products and
souvenirs.
Initially these conditions were
accepted, not only because Chung Ju-yung was
sentimental (and over-optimistic) about investment
to North Korea, but also because a large tourist
flow was expected. According to the above-cited
sanguine estimates of 1999, by 2003 the numbers
were supposed to reach the level of one million
visitors per year - and then exceed them.
However, the plan did not work out as
intended. Contrary to initial expectations, South
Koreans were not too eager to spend their short
vacations behind barbed wire. The early enthusiasm
soon wore out, and from 2,000 the numbers of
tourists began to decline. The trips were not
cheap: the cost in 1998-99 was about 650,000 to
750,000 won (some $500-600 at the current rate).
South Koreans soon discovered that for a similar
amount of money they could visit China or even
some parts of Southeast Asia, where apart from the
scenery they would have some exposure to foreign
cultures and would not feel under constant control
and supervision.
The reformist drive of
the Seoul government also contributed to the
project's mounting problems. Until early 2001,
other subsidiaries of the mighty Hyundai Group
were helping Hyundai Merchandise Marine, which
initially operated the Kumgang Project. But as a
result of government-initiated reforms of
chaebol (conglomerates), the Hyundai Group
was disbanded, after which independent companies
of the former chaebol were not too eager to
keep afloat a struggling project. In April 2001,
Hyundai halved the number of trips to Kumgang and
stated that the project would be discontinued due
to the great loss of money.
Trouble in
paradise
The government, however, could
not allow this to happen; by that time the project
had acquired huge symbolic importance. By 2001,
the Kumgang project had become by far the largest
intra-Korean economic operation, and the Kim
Dae-jung administration, bent on keeping its
"sunshine" engagement policy going, could not
afford to lose the major symbol of such policy.
A rescue package saved the project from
demise. The government-owned Korea National
Tourist Organization was ordered to take part in
the project and pay some of the overdue bills. The
government also occasionally paid for generous
discounts for many groups of people. For nine
months in 2002, for example, the government paid
70% of the traveling expenses for elementary,
middle and high school students, and 60% as well
as all costs for students and teachers living in
rural areas.
The North Koreans also
demonstrated uncharacteristic flexibility when in
2001 they reluctantly agreed to accept payments
depending on the number of tourists and the length
of their stay, instead of the earlier fixed fee.
Currently, these payments amount to $50 per
tourist with a standard package of two nights, and
$25 for a tourist who stays only one night.
Thus, the project survived the first
crisis - only to be struck by a new one. This
time, the reasons were political: the opposition
uncovered evidence which showed that in order to
secure Pyongyang's agreement to participate in the
North-South summit of June 2000, Seoul had
secretly transferred $500 million to North Korea.
It was only logical that this clandestine
money transfer was conducted with the involvement
of Hyundai Asan. First, the survival of the
corporation would be impossible without government
involvement, and this meant its leaders could
hardly say "no" when asked by the authorities to
"help" in some delicate affair. Second, being the
largest South Korean operation in North Korea,
Hyundai Asan had both vested interests in
intra-Korean detente and experience in dealing
with money transfers of such kinds (there are some
good reasons to suspect that the ill-fated "summit
fees" were not the only clandestine money transfer
to Pyongyang).
The discovery of the
"summit bribe" led to a political scandal. An
investigation ensued, and the then-head of Hyundai
Asan, Chiung Mong-hun, the 55-year-old son of the
conglomerate's founder, found himself in the
center of the scandal. He could not handle the
stress. Amid mounting political pressures, he
committed suicide by throwing himself out of his
headquarters' window on August 4, 2003.
Yet once again the Kumgang project
survived the blow. In May of this year, Hyundai
Asan stated it would probably make a profit in
2005. If that happens it will be the first time a
profit has been recorded in the company's history
- of course, we are talking about ongoing costs
and revenues, without considering the estimated
$470 million that has been invested in the project
so far. Nonetheless, it is clear that the
situation has improved over the past few years,
even if the actual performance would not be
considered satisfactory in a less politically
motivated project.
The improvement was
brought about by the opening of a land route in
2003 that replaced the earlier cruises. Now, South
Korean tourists board buses near the checkpoint
and then travel to hotels operated by Hyundai Asan
in the same Kumgang area. Currently, two hotels
are operational, but the number will probably
increase. The new tours can be shorter, with two
nights being the norm. The new scheme also cuts
down prices considerably, making the trip somewhat
more attractive at 300,000 to 400,000 won
(roughly, $350-$400) per person.
The
basics of the tour remain unchanged, however:
South Koreans are placed in a sort of ghetto,
behind high fences carefully guarded by sentries.
The tourists can shop for North Korean souvenirs,
which are sold at exorbitant prices. It seems ant
liquor and snake wine (with a real dead snake
floating inside the bottle) are especially popular
among males - both are believed to be good for
virility. An acrobatics show and a hot spring are
additional pleasures available for visitors - if
they are willing to pay. A visit to the hot
spring, for example, costs some $30, or about half
of the average annual salary in North Korea.
Outside their hotels, tourists are
constantly supervised by their North Korean
guides, mostly young girls who are obviously
selected for their good looks and, presumably,
political reliability. There are some males as
well, who dress in plain clothes. All guides are
equipped with their Kim Il-sung badges, and are
ever ready to deliver a well-rehearsed eulogy to
the Great Leader and his son and successor, Dear
Leader Kim Jong-il, in suitably exalted tones.
Combined with large iconic pictures of Kim
Il-sung and Kim Jong-il on major crossroads and
eulogies to their greatness carved in mountain
rock, this creates a very bizarre picture of time
travel: for one who wants to experience the
feelings of visitors to Mao Zedong's China in the
early 1970s or Stalin's Russia in the late 1930s,
the place is worth a visit. Admittedly, not many
foreigners rush to see the Stalinesque
environment, long extinct elsewhere: even though
formalities are kept at a bare minimum, only 0.5%
of all visitors are foreign citizens.
Looking at the North Koreans present on
the scene, one cannot help but wonder what is
actually happening inside the heads of these
highly privileged people, more often than not
agents of the secret police or scions of
well-connected families. The crowds of
well-dressed, well-fed South Koreans contradict
the official picture of the South as an
impoverished domain of US imperialists and
Japanese neo-colonialists. The selected few
probably don't ask questions, but they arrive at
some conclusions no doubt.
However, this
impact should not be overestimated. After all, the
project was conceived in a way that allowed the
impact of the South Korean visitors to be kept as
low as possible. The number of North Koreans
allowed to see these visitors is intentionally
kept very low. Until recently, Pyongyang did not
allow the Kumgang project to employ local
personnel, and only recently have North Korean
waitresses and cooks appeared at some restaurants
and in one of the hotels. Their attitude vividly
reminds this writer of the privileged Intourist
hotel in Leningrad, which had the same air of
unintended rudeness in dealing with its foreign
guests, and great superiority in interacting with
Soviet citizens. Nonetheless, at the Kumgang
project, the presence of some 400 North Korean
employees (excluding the guides and plain-clothed
minders) is significant. However, most of the
semi-skilled personnel are ethnic Koreans
recruited from China - they agree to work for very
low wages.
How will historians see the
Kumgang project and the much-trumpeted
"intra-Korean cooperation" in general? As a
selfish attempt by affluent South Koreans to
prolong the existence of a brutal dictatorship in
order to save themselves from the troublesome
necessity of paying for North Korea's
transformation? Or as an important contribution
toward this transformation, a way to slightly open
the closed doors of North Korean society and teach
its inhabitants a thing or two about the modern
economy and modern world? Perhaps they will see it
as a way to support the expensive habits of the
North Korean elite, or a way to ameliorate
suffering of the commoners. We know not, but one
thing is clear: business with North Korea is,
first and foremost, a political affair, and this
is unlikely to change in the foreseeable future.
Dr Andrei Lankov is a lecturer
in the faculty of Asian Studies, China and Korea
Center, Australian National University. He
graduated from Leningrad State University with a
PhD in Far Eastern history and China, with
emphasis on Korea; his thesis focused on
factionalism in the Yin Dynasty. He has published
books and articles on Korea and North Asia. He is
currently on leave, teaching at Kookmin
University, Seoul.
(Copyright 2005
Asia Times Online Ltd. All rights reserved. Please
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