Tourism in the Hermit Kingdom

North Korea Plays Nice With Brethren From the South

March 6, 2003

MOUNT KUMGANG, North Korea -- While North Korea continues to spew invective at the United States, warning of nuclear war and disaster, it has a different strategy with South Korea: a charm offensive.

Here in a spectacular mountain setting, North Korean park rangers flirt and joke. At a performance of acrobats, North Korean clowns pull South Korean audience members on-stage and give them a big bear-hug.

The Mount Kumgang tourist zone is a symbol of Korean cooperation. Developed by South Korea's Hyundai Asan Corp. at a cost of more than $400 million, the tourist resort illustrates the contrasting approaches to dealing with North Korea: while the United States tries to pressure and isolate the regime, South Korea is promoting business, cultural and family exchanges.

Most South Koreans generally accept that one day the two countries will be reunified, whether it's in five years or 50. To avoid the costly burden of merging with a collapsed nation, many hope to strengthen North Korea's almost non-existent economy.

Washington, on the other hand, has refused to negotiate with North Korea until it abandons its nuclear weapons program and would not mind, analysts say, if the dictatorship in Pyongyang collapsed. President Bush has expressed personal loathing for Kim Jong-il, North Korea's reclusive leader.

It is a split North Korea has been trying to drive a wedge through, with some success. Many younger South Koreans see Bush as a bigger obstacle to peace than Kim. On the snow-covered trails of Mount Kumgang, North Korean park guides eagerly embrace their South Korean compatriots and argue that the United States is the only thing standing in the way of their unification.

"I didn't have a chance to ask him about his life because he kept talking about American interference," said Park Jong-sun, a 50-year-old South Korean businessman who had a lengthy political discussion with one of the guides. "He said our country was divided by America, but I told him our country was divided by America and the Soviet Union."

The resort at Mount Kumgang, on a range that rises dramatically from the eastern coastline, is a tightly-controlled tourist zone where visitors are not allowed beyond Hyundai-built roads and facilities. The reality of North Korean life can be gleaned only from the bus window: villages are pitch-black at night, just about everyone is walking or, occasionally, bicycling, and slogans are everywhere.

Stern-faced North Korean soldiers stand guard along all the roads, a reminder that visitors are being watched. Guards are also posted at intersections, to make sure an ordinary North Korean doesn't cross the road at the same time a tourist does and have inadvertent contact.

Hyundai paid North Korea $308 million for the right to develop the area and pays $100 per tourist. It spent another $104 million building all of the facilities. In the project's first four years, visitors had to take a costly and time-consuming cruise ship. But starting last month, for under $300, they could go overland through the Demilitarized Zone, the first border crossing by civilians in 50 years.

The project is an important source of foreign currency for Pyongyang, but critics say it only helps to maintain a brutal dictatorship.

Hyundai said it is losing money on the project. It needs 350,000 visitors annually to break even; so far, 550,000 have visited in the past four years. Plans to open a ski resort and golf course are proceeding despite a payoff scandal. Hyundai has admitted making a secret $500 million payment to the North just days ahead of the historic 2000 summit between former President Kim Dae-jung and North Korean leader Kim Jong-il. The legislature has passed a bill to appoint a special prosecutor to investigate the so-called "cash for summit" deal.

Hyundai isn't the only South Korean company doing business in the North. About 180 companies have launched projects, mostly small-scale, labor-intensive manufacturing ventures. They are drawn by cheap labor and a common language, and are often undeterred by such problems as sickly workers, lack of electricity and unreliable transport.

"The national feeling compensates for the difficulty," said Lee Dong-cheol, head of the North Korea team of KOTRA, South Korea's trade promotion agency. When the political situation stabilizes, "then we will see a rush into North Korea."

The Koreas are also moving forward on a variety of other projects, including road and rail links near the west coast and a huge industrial zone in Kaesong, North Korea, 60 miles north of Seoul. They are the fruits of Kim Dae-jung's "sunshine policy" of engagement with the North, which newly inaugurated President Roh Moo-hyun has vowed to carry on.

With all the exchanges, some say North Korea is changing, albeit very slowly.

Hyundai officials say they tried for years to persuade North Korea to open a restaurant at Mount Kumgang, but the North refused, fearing the contact their citizens would have with outsiders. But they've opened two restaurants this year, operated and staffed by North Koreans, and plan to convert a former government villa at Samil-po Lake into a third.

They have even learned the art of tourist-gouging. Use of the bathroom atop Mount Kumgang costs $4. Only U.S. dollars are accepted. A multi-course meal at Kumgang House, which most South Koreans rated as bland and disappointing, costs $25. A bottle of beer is $5 extra; a can of Coke costs $1. Salt is rationed.

"We have the intention to trade one day with America when relations are better," said Kim Kwang-hyok, a North Korea park ranger who said he studied English for six years in school. "English is very important and useful for trade and technology and to have exchanges with other countries."

When the tours first started, visitors were told not to talk about politics or to even point at the North Koreans. Now, discussions are almost free-wheeling. The Hyundai tour guide simply warns: "When you talk to North Koreans, don't blame their system. If you mention Kim Jong-il or Kim Il-sung (previous and current leaders of North Korea), use their title, 'dear leader' or 'great leader."'

Many South Korean tourists say they come away from the Mt. Kumgang tour feeling unification is much closer than they had previously imagined.

"The Hyundai company has done great things for the two countries," said Seo Kyeong-hwa, 42, a Seoul housewife. "North Korea should pursue more freedoms, but they should change gradually, by themselves. This kind of trip is the first step in helping them change."

Still, they know it will take time.

"I told the North Korean that the economic gap between North and South is so wide that after unification, it will be like North Korea is robbing South Korea," said Park, an expensive Nikon camera hanging from his neck.

The North Korean, with a Kim Il-sung badge pinned to his jacket, replied: "Do we look that poor?"

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