North Korean Economy Watch

Yonhap
12/8/2007

North Korean leader Kim Jong-il has given warm encouragement to local workers developing Mount Paektu, the highest point on the peninsula that will be opened to South Korean tourists next year, the North’s broadcaster said Saturday.

South and North Korea agreed to open a direct flight route between Seoul and the North’s Mount Paektu during their second summit in October. The inter-Korean tour, set to start in May, is organized by South Korea’s Hyundai Group.

Kim “expressed his gratitude to officials and workers who have wholeheartedly supported the development of the Mount Paektu area,” the Korean Central Broadcasting Station, monitored in Seoul, said, naming technicians, researchers and factory workers involved in the project.

Hyun Jeong-eun, chairwoman of the Hyundai Group, agreed with North Korea during her visit to Pyongyang in early November to start in May sightseeing tours of the North’s 2,744-meter mountain, located on its border with China. A group of South Korean government officials and researchers have conducted an on-site inspection.

Mount Paektu will be the third inter-Korean tourism project organized by Hyundai Asan, a unit of the Hyundai Group in charge of North Korea business. North Korea opened its border city of Kaesong to South Korean tourists early this week, following the launch of a tourism program to the North’s east coast mountain of Geumgang nine years ago.

The Mount Paektu and Kaesong tour projects are part of agreements South Korean President Roh Moo-hyun and North Korean leader Kim Jong-il reached during their summit that sought to boost economic cooperation and reduce tension.

Joong Ang Daily
Ser Myo Ja
11/19/2007

Seo Myeong-hee has traveled the world to see the pyramids of Egypt, the Great Wall of China and the Grand Canyon in the United States, but she said her visit to Chonji, the crater lake on the peak of Mount Paektu, was the best trip of her life.

“It was a beautiful sunny day in May last year. I was just taken away by the magnificent view,” Seo, 57, recalled of her visit to the mountain that straddles the border between China and North Korea. “After walking along the ridge for about three hours, we were there. The lake was a mysterious blue, and there were wildflowers everywhere.”

Standing 2,744 meters (9,002 feet) tall, Mount Paektu has been worshipped for centuries as the place of Korea’s ancestral origins. In addition to its beauty, it is this rich cultural tradition that prompted Seo, like many South Koreans, to travel through China to see the mountain, since there is currently no way to visit the area via North Korea. “It was a five-day trip, but mostly we spent time in Chinese towns seeing ancient ruins of the Goguryeo Kingdom and other tourist attractions,” she said. “The highlight was definitely Mount Paektu, but you have to sit on the bus for many painful hours to actually get there.”

All that, though, is about to change. Last month’s inter-Korean summit finally opened the door for South Koreans to fly directly to the mountain. It promises to be a popular destination once the infrastructure is complete.

In 2005, North Korean leader Kim Jong-il promised Hyundai Asan Chairwoman Hyun Jeong-eun during a visit to Pyongyang that he would allow a tour program for Mount Paektu. Nothing was done for more than two years, however, until the October summit between Kim and President Roh Moo-hyun resulted in a deal to allow passengers to fly from Seoul to an airport on the mountain.

With cooperation from the Korea National Tourism Organization, Hyundai Group’s North Korea business arm, Hyundai Asan, has begun preparations in cooperation with North Korea’s Asia-Pacific Peace Committee, which handles civilian inter-Korean projects.

Hyundai Asan, which has the sole franchise to operate tours to the North from South Korea, plans to begin offering tours to Mount Paektu in May 2008. The only other tour program from the South allows visitors to travel to Hyundai’s resort at Mount Kumgang, a project that began in 1998. A South Korean team including officials from the KNTO, the Roh administration and Hyundai will make an on-site survey of Mount Paektu before the end of this month.

Yoon Man-joon, president of Hyundai Asan, told the JoongAng Daily in an interview Thursday that he is extremely optimistic about the tour project. Yoon and Hyun visited the mountain personally early this month.

“The Mount Kumgang tour had more of a symbolic meaning, because it was the first opportunity for South Koreans to go to North Korea for tourism,” Yoon said. “Mount Paektu, however, has much more potential to succeed solely as a tour program.”

Yoon thinks demand will be high and response immediate once the tours begin. “Mount Kumgang is praised for its scenic beauty, but Mount Paektu is more than that,” Yoon said. “The place is the origin of all Koreans, and it is an extraordinary experience for us to visit there.”

Seo could not agree more. “When I saw Chonji, the crater lake, I became so emotional that I almost cried,” she said. “The lyrics of our national anthem even begin with the mountain ― ‘Until the East Sea’s waves are dry, and Mount Paektu is worn away, God watch o’er our land forever!’”

The mountain has long been considered sacred. In Korea’s creation myth, Hwanung, a son of the Lord of Heaven, was allowed to descend onto Mount Paektu with 3,000 followers and found the City of God.

There a tiger and a bear told Hwanung that they dreamed of becoming human, and Hwanung gave them 20 cloves of garlic and a bundle of mugwort, ordering them to eat only those foods and remain out of the sunlight for 100 days. The tiger failed, but the bear endured and eventually was transformed into a woman.

The bear-woman then prayed for a child, and Hwanung took her for his wife. A son, Dangun, was born, and he built the walled city of Pyongyang and called his kingdom Joseon. Not to be confused with the Joseon Dynasty, the kingdom is referred to in Korean history as Gojoseon or Ancient Joseon. Historians believe his kingdom began in 2,333 B.C.

This mythology is still marked on the modern Korean calendar, with Oct. 3 celebrated as Gaecheonjeol, or National Foundation Day, which marks the establishment of the first Korean kingdom.

The opening of Mount Paektu is not without controversy. Other travel agencies have expressed their displeasure with Hyundai Asan’s monopoly on tours to the famous mountain. On Nov. 13, Shim Joong-mok, the president of the Korea Tourism Association, held a press conference and said the group wants a share of the potentially lucrative market. He said the association, which represents more than 20,000 travel agencies in Korea, may take legal action if their request is not met.

Hyundai Asan President Yoon rebuffed the demand. “The agreement we have with North Korea for exclusive rights to Mount Paektu tourism is a legitimate commercial deal,” Yoon said. “They act as if we received this right for free, but we have made vast investments in North Korea over the past nine years and earned the North Korean authorities’ trust. The tour program was given in return.”

Yoon said the tourism industry should respect market principles. “It would be the same for any other beautiful mountain. Would it make sense for me to develop a resort under an exclusive contract and then have other travel agents demand that they also want to do business there?” Yoon asked. “The travel agents’ demand is unreasonable.”

According to a Hyundai Research Institute report, it will cost up to $1.26 billion to develop a resort on the mountain comparable to the facilities in Pyeongchang, the South Korean city that hopes one day to host the Winter Olympics.

Yoon said he is confident about the Paektu program’s potential, citing his recent visit to the mountain. “There are two lodging facilities built by North Korea on the mountain. One is Sobaeksu State Guest House and the other is Baegyebong Hotel. Both are modern, and they will be usable after some modifications,” Yoon said.

He said the survey team, which will leave before the end of this month, will also study what work is needed for Samjiyon Airport on Mount Paektu to begin receiving flights from South Korea. “We will have a better idea after surveying the runway and traffic tower,” he said, adding that Korean Air and Asiana have both expressed interest in flying to North Korea.

The modernization of the airport may also be expensive. The Ministry of Construction and Transportation said in a report last month that repairs will cost 280 billion won ($304 million).

The price of the tour program is also still to be decided. “It will be competitive with tour programs via China,” Yoon said. “We don’t want to make it too expensive or too cheap.”

Seo said she paid 1.2 million won for her five-day package to visit the mountain via China. “I didn’t think it was too expensive,” Seo said. “If I can fly to the mountain in just two hours at a similar cost, I will be more than willing to go one more time.”

Running a tour program for Mount Paektu is also tricky because there are only few weeks in the year when Chonji Lake can be seen in good weather. “I was happy because the May weather was fantastic,” Seo remembered. “The tour guide said we were lucky because many groups could not see the magnificent view due to the weather.”

According to Yoon, Hyundai Asan is reviewing other plans to use the mountain’s winter weather as a possible attraction for sports and hot springs.

The new tour may take away one small attraction of the Chinese route ― a chance to see the low-key North Korean border with China. “The border is not heavily guarded,” Seo said. “Our guide even allowed us to cross the border on foot. The North Korean guard smiled at us, and we took a souvenir photo together. I gave him a chocolate, and he was really thrilled.”

The most authoritative map of North Korea on Google Earth
North Korea Uncovered: Version 6
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This map covers North Korea’s agriculture, aviation, cultural locations, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks. It is continually expanding and undergoing revisions. This is the sixth version.

Additions to the newest version of North Korea Uncovered include: Alleged Syrian nuclear site (before and after bombing), Majon beach resort, electricity grid expansion, Runga Island in Pyongyang, Mt. Ryongak, Yongbyon historical fort walls, Suyang Fort walls and waterfall in Haeju, Kaechon-Lake Taesong water project, Paekma-Cholsan waterway, Yachts (3), and Hyesan Youth Copper Mine.

Disclaimer: I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. These efforts include pouring over books, maps, conducting interviews, and keeping up with other peoples’ discoveries. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds as to what they see. I cannot catch everything and I welcome contributions.

Daily NK
Moon Sung Hwee
11/9/2007

The conservative wing in South Korea purported that the opening of the direct Seoul-Baekdu air route would not lead to reforms and open-door policies of North Korea as proved in the case of Geumkang Mountain sightseeing. Hyundai Asan Co. and Korean Asia-Pacific Peace Committee of North Korea have just made a contract for the direct airline staring May next year.

Individuals who travel Mt. Geumkang by land will pass Yuongwoong Middle School, and Onjeong-ri and Yangji village on both sides of the road, all of which are walled off from tourists. Even in Geumkang Mountain, many places are enclosed with iron railings and armed soldiers are guarding them.

Many defectors originally from the Mt. Baekdu areas say that the locals have relatively ease access to the mountain, and so the sightseeing tour of Baekdu Mountain would bring considerable impact on the locals.

The sightseeing tour of Mt. Baekdu passes through Lake Cheonji and Yimyungsoo Waterfall, both of which are popular visiting places for many locals, and Samjiyeon ski resort is located in nearby villages.

Furthermore, every year hundreds of thousands pay a visit to many revolutionary sites in Mount Baekdu. When the tour begins in May next year, the locals and visitors would inevitably run into South Korean tourists. Many people wonder what the North Korean authorities would do about the contact before tourism begins.

According to the Hyundai Asan Co., tourists will fly a direct airline to Samjiyeon Airport and stay at either Sobacksu Visitor’s Hall or Begaebong Hotel. Then, they will visit Sobaeksu Forest, Yimyungsoo Waterfall, Mangchun Peak, Jangkoon Peak and Cheonji Lake.

Tourists must pass through the downtown of Samjiyeon in order to get to Mount Baekdu from Samjiyeon Airport. Unlike Onjong-ri located nearby Geumkang Mountain, it is difficult to close off many places in the Baekdu Mountain areas especially those densely populated villages around Yimyungsoo Waterfall and Samjiyeon ski resort.

In July, 2005, Hyundai Corporation had also once made a contract with North Korea for the development of the Baekdu Mountain areas for tourism. But it was not successful back then because North Korea had a conflict with the Hyundai over economic cooperation and so grew reluctant to cooperate with the corporation as the day for a pilot sightseeing to Mt. Baekdu approached. Moreover, It was difficult for the North Korean authorities to ignore the fact that hundreds of thousands of people make a field trip to many revolutionary sites in the Mt. Backdu areas every year.

The Mt. Baekdu areas have many national treasures such as Mt. Baekdu Billet publicized as Kim Jong Il’s birthplace, the so-called “slogan tree” (referring to those cherished trees which are inscribed with anti-Japanese slogans and the eulogy for Kim Il Sung, and supposedly carved by Kim Il Sung’s soldiers during his anti-Japanese struggle), and many other historical sites and monuments. In fact, Mr. Baekdu is considered sacred and lies at the center of “Su-Ryeong Absolutism” (the idolization of the late Kim Il Sung). The North Korean authorities use the national treasures in Mt. Baekdu to mystify Kim Il Sung and Kim Jong Il.

The itinerary of North Korean people who make a field trip to Mt. Baekdu for two nights and three days is planned as follows. First, they arrive to Samjiyeon Pond by train, and visit Kim Jong Il’s birthplace and Samjiyeon Monument. Next day, they go to Lake Cheonji. On the last day, they pay a visit to the first slogan tree at Gunchang Billet and Begaebong Billet, and Yimyongsoo Waterfall. The problem is that the itinerary of North Korean field trippers is the same as that of South Korean tourists.

Therefore, it is not clear yet whether the North Korean authorities would really open the tourist route in the Mt. Baekdu areas for South Koreas as scheduled in May next year.

It seems that the North Korean authorities allowed the development of Mt. Baekdu because they now have the knowledge and skill to manage tourism business from years of experience of operating Geumkang Mountain tourism business. In addition, the North Korean authorities might have figured out that tourism business normally does not directly lead to reforms and open-door policies.

It is impossible for the North Korean authorities to relocate all residents in the Mt. Baekdu areas. Therefore, they will likely relocate those who have “bad family background” among the residents. (North Korea is highly stratified by class based on family background.) Moreover, the authorities will likely build a block wall designed to keep the residents from encountering South Korean tourists, and construct a new road for tourists.

However, if the itinerary of North Koreans overlaps with that of South Korean tourists, two groups will inevitably have an encounter with each other. Even if North Korean field trippers go on foot and South Koreans travel by bus, two groups will confront each other at tourist attractions such as Samjiyeon Pond, Samjiyeon Monument, Begaebong Peek, Gunchang, and Lake Cheonji.

The North Korean authorities may have North Koreans make a field trip to Mt. Baekdu between November and April during which Samjiyeon Airport has to be closed due to ice on the runaways, and therefore the sightseeing trip is unavailable.

In other words, Mt. Baekdu will be available for half a year for North Korean field trippers and for the rest half for South Korean tourists. However, that is not likely to be a solution since it is difficult to make a trip to Mt. Baekdu during winter due to bad weather conditions. Indeed, the authorities have been restricting the field trip to Mr. Baekdu during the winter period.

A defector from Yangkang Province said, “The authorities may build a new road for tourists or change the tourism schedule.” The defector added, “Once the tour begins, North Korean field trippers will take more interest in South Korean tourists than the legendary struggle for revolution by Kim Il Sung and Kim Jong Il.”

Asia Times
11/9/2007

[excerpt]
North Korea said this week it will allow a South Korean business group to start sightseeing tours of a scenic mountain on its border with China next year, as agreed at a recent inter-Korean summit of leaders.

Pyongyang’s contract with the Hyundai Group will enable South Koreans to visit the 2,744-meter-high Mt Paektu by direct flight. Currently, South Koreans can only visit the Chinese side of the mountain.

“Both sides agreed to start the tour of noted places on Mt Paektu from May of 2008,” the (North) Korean Central News Agency (KCNA)said of the contract signed between Hyundai Group chairwoman Hyun Jeong-eun and Choe Sung-chol, vice chairman of the Asia-Pacific Peace Committee, a North Korean state organization handling inter-Korean affairs.

Hyun, back from a five-day trip to North Korea, met reporters in Seoul and confirmed the contract. “Under the agreement, Hyundai Group will have exclusive rights to operate the tourism business to Mt Paektu for 50 years,” Hyun said, disclosing that she also met with the North’s top leader, Kim Jong-il, during her stay in the communist country.

The sightseeing tour of the tallest mountain on the Korean Peninsula expands Hyundai’s business with North Korea, which currently includes a cross-border tour of Mt Kumgang on the North’s east coast. More than 1 million South Koreans have visited the mountain since the tours started in 1998.

Most Koreans regard Mt Paektu as a holy area where their mythical leader, Tangun, descended from heaven and established a kingdom. North Korea claims that its current leader, Kim Jong-il, was also born there 65 years ago, an event heralded by the appearance of a double rainbow over the mountain and a new star in the heavens. (However, former Soviet Union records show he was born in Siberia, in 1941, where his father, Kim Il-sung, commanded the 1st Battalion of the Soviet 88th Brigade, made up of Chinese and Korean exiles.)

North Korea also claims that the mountain was a base for the independence movement against Japan’s colonial rule of Korea led by the communist nation’s founder, Kim Il-sung, in the early part of the 20th century.

Hyundai has been at the vanguard of business with North Korea since its founder, Chung Ju-yung, crossed the heavily armed demilitarized zone with truckloads of cattle in 1997. Hyundai’s business in North Korea also includes the Kaesong industrial complex, where about two dozen garment and other labor-intensive South Korean firms operate with the labor of more than 15,000 North Korean workers. The project started as a result of the first-ever inter-Korean summit in 2000.

Establishing tourism to Mt Paektu was a lifelong dream of Chung Ju-yung, who died in 2001. Chung handed over the group’s North Korean business arm to his fifth son, Mong-hun, who committed suicide in 2003 amid suspicions that the group was involved in the government’s secret transmittance of huge sums of money to Pyongyang in return for the 2000 summit. His wife, Hyun, immediately took charge of the business.

“My trip to the North was very productive,” Hyun said. “Details of the Mt Paektu business will be discussed at the working level.”

Speaking about her meeting with the North Korean leader, she said “I met him for the first time in two years. He asked about my daughter and we talked a lot about personal things.” Hyun said she is happy to realize her father-in-law’s dream.

In addition, the North’s Asia-Pacific Peace Committee decided to grant Hyundai Group the right to conduct tours of the Kaesong area. “Both sides agreed to start the tour of historic sites and scenic places in the Kaesong area from early December 2007,” the KCNA reported.

Meanwhile, the South Korean government, together with the Hyundai Group, plans to survey Mt Paektu this month to prepare for the start of tours next year, industry sources said. “The preliminary survey by government officials and Hyundai will thoroughly check Mt. Paektu,” said an official from Hyundai.

Yonhap
11/3/2007

Direct flights that will allow tourists from South Korea to visit Mount Paekdu in North Korea will begin in May, Pyongyang’s official state-run news agency said Saturday.

The Korean Central News Agency (KCNA) said the deal was reached in talks between Hyundai Group chairwoman Hyun Jung-eun and representatives of the North’s National Economic Cooperation Federation.

The tours were agreed upon at the summit meeting between South Korean President Roh Moo-hyun and North Korean leader Kim Jong-il early last month. Seoul had previously provided materials to repair an airfield near the mountain.

Foreign visitors to Mount Paekdu, whose 2,744-meter peak is the highest on the Korean Peninsula, usually climb the mountain from the Chinese side, although the mountain is a popular tourist destination for foreign tourists in North Korea. Koreans traditionally consider Mount Paekdu a sacred mountain.

The KCNA report also said Hyundai will start tours of Kaesong, an ancient Korean capital, in early December.

Hyundai Asan, a affiliate of the the business group, runs the Kaesong industrial complex that is home to about 50 South Korean companies producing clothes, shoes, watches and kitchen appliances.

The inter-Korean complex 60 kilometers northeast of Seoul is hailed as the crowning achievement of the historic first-ever inter-Korean summit in 2000. It has played a key role in expanding two-way economic exchanges from just $300 million in 1999 to $1.35 billion last year.

The North Korean news agency said Hyun and Hyundai Asian president Yoon Man-joon met with Kim Jong-il.

The two senior executives are expected to return to South Korea later in the day.

Yonhap
11/1/2007

The chief of South Korea’s Hyundai Group met with North Korean officials in charge of inter-Korean cooperation on Thursday to discuss the group’s business projects in the North, the North’s Korean Central News Agency (KCNA) reported.

The KCNA said Hyundai Group Chairwoman Hyun Jung-eun held talks with North Korean officials, including officials from the North’s National Economic Cooperation Federation.

The two sides took notes on an industrial park in the North Korean city of Kaesong and the building of a tourist resort near Mount Paekdu, according to the KCNA. Prior to the talks, Hyun’s delegation also toured Mount Paekdu, the North’s highest mountain on the border with China, the KCNA said.

The KCNA, however, stopped short of reporting the outcome of the talks.

At Thursday’s talks, Hyun is believed to have discussed the Mount Paekdu tourism project and the second-stage development of the Kaesong industrial complex with the North.

The South Korean company said earlier that Hyun and Yoon Man-joon, head of Hyundai Asan, a Hyundai subsidiary that runs Hyundai’s business in North Korea, visited Pyongyang on Tuesday via Beijing to discuss inter-Korean projects with North Korean officials. Hyun and Yoon are to return home Saturday, according to Hyundai officials.

Hyun’s visit this week marked her second trip to North Korea in a month, as she accompanied South Korean President Roh Moo-hyun on his historic inter-Korean summit with North Korean leader Kim Jong-il from Oct. 2-4.

At the summit, Roh and Kim agreed their two countries would work together on a wide range of economic projects, even though the two states are still technically at war since the 1950-53 Korean War ended in an armistice, not a peace treaty.

After the summit, Hyun said she expects tours to Mount Paekdu to start as early as next April. At the summit, the two leaders agreed to establish direct flights from Seoul to Mount Paekdu.

Hyundai maintains close business ties to North Korea. One of its major cross-border projects is tours of scenic Mount Geumgang on the North’s east coast. More than 1 million South Koreans have visited it since 1998.

Hyundai’s business with North Korea was started by its late founder, Chung Ju-yung, in the early 1990s.

Hyun took the helm of Hyundai in 2003 after her husband, Chung Mong-hun, the Hyundai founder’s fifth son, committed suicide by jumping from a window of his high-rise office in Seoul, apparently under pressure from a lobbying scandal involving a North Korean project.

Joong Ang Daily
Limb Jae-un
10/8/2007

Days after both Koreas vowed to heighten cooperation, a lawmaker said yesterday in a report that the Kaesong Industrial Complex, the experimental site combining South Korean technology and North Korean labor, has been unprofitable so far.

In addition, the Ministry of Construction and Transportation said in a report yesterday that repairs to the airport on Mount Paektu will cost 280 billion won, or $304 million.

One of the agreements signed at the inter-Korean summit Thursday calls for allowing South Korean tourists to visit the scenic mountain on the Korea-China border.

“In terms of the runway length, Samjiyon Airport can accommodate large airplanes, such as a Boeing 747, but the condition of the airport is bad,” said an official of the construction ministry, who asked for anonymity. The airport, located on a plateau 1,000 meters, or 3,280 feet, above sea level, needs advanced navigation facilities, he said.

Despite the optimistic discussions during last week’s summit, inter-Korean economic cooperation has so far had dismal results, according to a report from Grand National Party Representative Lee Han-koo. Thirteen out of 16 companies operating at the Kaesong Industrial Complex are currently in the red, he said. Their debt is four times higher than their assets, he said. The combined assets of the 16 companies is only 4.5 billion won and their average annual sales is 790 million won.

“The biggest problem of the economic cooperation is that the relevant information has been held back from the public,” Lee said.

Meanwhile, a top European official said North Korea must go through serious reforms to become a viable investment destination for Europe.

North Korea is unattractive for Europe because “the conditions for investment are not safe enough and the regulatory environment is not predictable,” Guenter Verheugen, the EU Industry and Enterprise Commissioner, said in an interview with The Associated Press on Saturday.

Joong Ang Daily
Jo Dong-ho
10/9/2007

The summit meeting was quite successful. Some say it was because North Korea’s nuclear program was not on the agenda. Relinquishing its nuclear ambitions is the North’s card for normalizing ties with the United States and receiving rewards.

Costs cannot worry us either, because South Korea’s economy has grown so much that we can now pave a road even for a village on a remote mountain. If the size of government projects for culture cities or innovation cities were reduced, we would have trillions won, or billions more dollars, available.

As an economist, I would like to focus on roles of the government and the market discussed in the summit meeting. The ultimate question of economics can be summarized as how the market and the government will divide their roles to get maximum benefits out of limited resources.

The economics of past 200 years concludes that the best way is for the private sector to make independent decisions in economic activities and for the government to manage the rules so that those activities will be carried out fairly and smoothly. This can be likened to the relationship between players and referees in a sporting event.

The same principle applies to economic cooperation between South and North Korea.

Easing military tension, which will reduce the risk of investing in North Korea, is something that only the government can do. Repairing railways and roads is also the responsibility of the government. To improve transportation, communication and customs are the same. The private sector cannot do those jobs on its own.

However, building a shipyard or developing tourism on Mount Baekdu is for the private sector to carry out. But as these projects were agreed upon in the summit meeting, they must be carried out without feasibility studies. These projects were being discussed even before the summit meeting.

Private companies have been interested in them for years, but they have not made the decision to pursue them for many reasons, including low profits. Now the leaders of the two Koreas have made an agreement so these projects must be carried out. North Korea will probably make more unreasonable demands. The South Korean government will have to provide subsidies, and that will increase the burden on the South Korean people.

Some may find it disturbing that I criticize a few projects when there were many other good agreements reached. But these projects show the South Korean government’s basic view on economic cooperation with the North.

In fact, in all the projects agreed upon, there is a vague guideline for the division of roles between the government and the market. The same is true with the agreement to complete the first step of construction at the Kaesong Industrial Complex earlier than planned and to start the second step. The Hyundai Asan Corporation and the Korea Land Corporation are the ones doing the industrial park project, not the government.

These companies have their reasons for managing the industrial park project in its first stages. The government cannot and should not agree to implement the project at a faster speed. After North Korea tested its nuclear bomb, there was pressure to halt that project. Then the government said it could not intervene because it was led by the private sector. But the government has now agreed to complete it at an earlier date.

Some maintain that these agreements will improve inter-Korean relations so there is no use in dividing the government and the market. But it is more important that economic cooperation between South and North Korea improves properly than quickly. Let’s say the improvement of economic cooperation between South and North Korea is of the utmost value so the government can lead economic projects. But there must be good reasons for the government to intervene in the market.

The government has said until now that it supported economic co-operation with the North in an attempt to induce North Korea to open its doors and reform its economy. But that no longer sounds like enough. When providing assistance, the supporter must make sure that the party that receives assistance tries to stand on its own. But the president said we should not mention this in the summit meeting.

Six months ago, at an event for businessmen in the fisheries industry, the president said the government would provide support if need be, but what is most important is their own will and efforts.

One of President Roh’s strengths is that he is not afraid to say what he needs to say. That he could not say what he had to say to Kim Jong-il is what is most regrettable about the meeting.

Korea Times
Ryu Jin
10/8/2007

South Korean tourists might be able to visit Mt. Baekdu in North Korea from as early as April next year, as the top leaders from the two Koreas agreed to open a direct air route between Seoul and the auspicious mountain in their summit last week.

Hyundai Group is considering a comprehensive tour program that links Mt. Geumgang, Gaeseong City and Mt. Baekdu, even including Pyongyang, to attract more South Korean tourists, according to the company Monday.

Group Chairwoman Hyun Jeong-eun plans to visit the North Korean capital along with Hyundai Asan CEO Yoon Man-joon as early as this month for consultations of the cross-border businesses with North Koreans, a Hyundai Asan spokesman said.

“A variety of ideas are being considered for the new tour programs,’’ said the spokesman, who asked not to be named. “We cannot tell the exact time for the launch. But we are trying to get the new tour programs started as early as possible.’’

Mt. Baekdu, seated at the northern tip of the Korean Peninsula, has been a symbol of national spirit and unification along with Mt. Halla on South Korea’s southern resort island of Jeju. “From Baekdu to Halla’’ is how many people describe their fatherland.

Now on the borderline between North Korea and China, the auspicious mountain has been shared by the two states in modern times. Some 100,000 South Koreans visit what the Chinese people call “Mt. Changbai’’ every year from the Chinese side.

Industry sources expect that, once the direct tour route is developed, people could enjoy the grandiose scenery of the mountain, including the Cheongun Rocks and Baekdu Falls, which are said to be more spectacular than the Changbai Falls.

But travelers and experts say that a tour to the 2,744-meter mountain is possible only between May and September because of precarious weather conditions. On only a few days could the climbers clearly see Cheonji, a large caldera lake on top of the mountain.

“I hope that the tour program is launched as early as possible,’’ Hyun, who accompanied President Roh Moo-hyun to the summit in Pyongyang, told reporters on her way back home. “I heard that it is possible to climb the mountain in April.’’

Hyundai Asan, a Hyundai Group affiliate that operates various cross-border businesses, expects the direct air route to cut the travel time drastically from nine hours needed for trip via China to 1-2 hours, not to mention the reductions in travel expenses.

“Domestic travel agencies sell five-day tour programs to Mt. Baekdu, or Changbai, via China for prices from 800,000 won ($874) to two million won ($2,185),’’ a private tour agency said. “A direct tour would cut the travel expenses by almost half.’’

However, Hyundai Asan admitted that there are a number of tasks to be done before the launch of the direct tour program, including the establishment of infrastructure such as an airport, hotels and other facilities for travelers.

Billions of won would be required to develop the Samjiyeon Airport, the nearest airport from Mt. Baekdu, according to recent surveys.

Hyundai Asan will dispatch an on-site inspection team to the area next month to check the accommodation capacity and other necessary facilities. It has already given five billion won to North Korea for the arrangements of the airport.