North Korean Economy Watch

Yonhap
7/27/2007

North Korea has demanded a 15 percent pay raise for its workers from South Korean companies at an inter-Korean industrial complex just north of the border, sources said Friday.

In a bid to press for their demand, the North notified South Korea that North Korean workers will refuse to work extra hours or on weekends and holidays starting from August, they said.

In the Kaesong industrial complex, North Korean workers earn about US$57 a month, including a $7 insurance payment, so their basic wages will increase to $66 if the North’s demand is accepted, according to officials.

No pay raise has been given since the complex began operations in late 2004, in spite of such demands being made several times.

“It seems like North Korea is demanding a pay increase accrued since 2004. We will decide on a pay raise at a reasonable level after consultations with the North Korean authorities,” a Unification Ministry official said.

Currently, 26 South Korean companies employ about 15,000 North Korean workers in Kaesong, including construction and office workers, at the site developed on a trial basis.

The number of North Korean workers is expected to increase to more than 350,000 when the complex becomes fully operational by 2012. Monthly production in the complex exceeds US$10 million.

“If the basic wage is increased to $66 and North Koreans work extra hours or weekends, South Korean companies will have to pay an average of $118 per month. Then the advantage of cheap labor in Kaesong will decrease,” said Kim Kyu-cheol, president of the South-North Korea Forum.

The industrial complex, the crowning achievement of a landmark summit between the leaders of the two Koreas in 2000, is one of the two major cross-border projects that South Korea has kept afloat in spite of United Nations sanctions on the the North following its nuclear weapon test in October. The two Koreas also run a joint tourism project at the North’s scenic Mount Geumgang.

Daily NK
Kim Chan Ku, Researcher in the Institute for Far Eastern Studies
7/26/2007

1989 July 14th. Kim Ki Dong, a manager at Rajin ship repairs and superintendent and Choi Chng Ku (affiliated with Daesung General Bureau) of Rajin’s Donghae Marine Products for Exports made a decision to reinvestigate business plans for a ship maintenance factory.

The 3.30PM train headed for Kimchaek arrives at Kimchaek station at 10.40 in North Hamkyung where an official from Kimchaek Fisheries Office came awaiting their guests. We headed for the villa.

Through these business investments, a small fraction of North Korea’s closed doors have been opened and the number of tourists continued to rise. In addition, a great number of Korean-Americans were reunited with their separated North Korean families.

In fact, most of these people had been thinking about small-scale investments with the purpose of frequently meeting their separated families. I was the only person wanting to invest in North Korea despite not having any connections.

In 1988, Koreans with American citizenship thought they were allowed to invest in North Korea different to U.S. North Korea policies. It was at this time problems began to arise.

Korean-Americans only permitted 1 visit to North Korea per year

The U.S. government had claimed North Korea as an enemy state and for this reason had placed restrictions to the number of visits to North Korea. The U.S. had drafted and was regulating a list of visitations to North Korea in which Korean-Americans took no notice of. With the sole reason that North Koreans were of the same race, people traveled unrestricted to North Korea in which the U.S. had deemed an enemy state. However, the U.S. government could not accept this.

Around this time, the number of visits had been reported to the U.S. Department of Treasury.
1) All Korean-Americans residing in the U.S. (with citizenship or permanent residency) are permitted to travel to North Korea on 1 occasion per year.
2) No more than US$100 worth of goods possessed or purchased in North Korea can be brought into the country.
3) All Korean-Americans are prohibited from investing in North Korea and are prohibited from arbitrating any businesses for other North Korea advancement.

A notice was made which specifically stated that strict penalties would be made under U.S. law against any persons who did not comply to the 3 law enforcements. However, I continued with my work.

Following consultations with company authorities, a whole day was spent drafting business plans needed to repair a Russian cargo ship. On examining the business plans, it was decided that a floating dock would be the most appropriate and cost effective operation.

A decision made to help overrun coastal facilities

평양으로 돌아온 나는 종합검토 결과 라진-선봉지역은 일제 때부터 일본군인들이 사용했던 항구이고, 또 지역적으로도 앞으로 동북아 물류 중심 항구로 손색이 없겠다는 결론을 내렸다. 또한, 북한 측의 요구를 고려해 라진-선봉 지구에 시설을 하기로 했다. 원 부자재인 플로팅 독(Floating Dock)은 내가 책임지고, 그 외의 모든 설비는 대성총국 측에서 책임지기로 합의서를 작성했다.  

On returning to Pyongyang, I made a decision on the results which indicated that the Rajin-Sunbong region had been used as a port by Japanese soldiers during Japanese occupation and that geographically, this region possessed no disadvantages in being the focal port of distributing goods in the future of North East Asia.

For 10 days, I visited many small and large ports throughout North Korea’s eastern coast and having seen the incomparably inadequate state of the ports in comparison to South Korean marine business, I made the decision to help these people and signed a contract.

On returning to Seoul, I spent a lot of time collating data that needed to be submitted by September. For 3 weeks, colleagues spent the summer working for more than 10 hours each day taking pictures and collecting information on North Korea companies and repair factories on location in Busan.

3 people, a planner, work colleague and myself, Kim Song Chan, a businessman from LA with experiences in trading with Communist countries arrived early in the morning of September 25th at North Korea’s embassy on the borderline and having received the visas arrived in Pyongyang.

In addition, a trading manager, advisor and colleague also joined us on our journey as we left on a special night train headed for Sunbong at 5PM on the 27th. The railroads were so poor that I felt as if I had bordered a boat and I couldn’t see anything as there was no light.

On the following morning, we arrived at Kimchaek city at 8AM. The purpose of this trip was to make ultimate decisions on fisherman, refrigerator and storage for the company, as well understand the present condition of catching turban shells and location for ship repairs. At the time, the Chosun Central Fisheries Committee had requested us to construct facilities at either Rajin or Wonsan port, but the Daesung General Bureau requested that the facilities be constructed at Kimchaek port as it provided all the good conditions.

Korea Times
Jane Han
7/26/2007

Inter-Korean trade rose 28.6 percent in the first half of 2007 from a year earlier, the country’s leading trade agency said Thursday, attributing the boost to the Gaeseong joint industrial complex and the eased tension between Seoul and Pyongyang.

Trade amounted to $720 million during the January-June period, the Korea International Trade Association (KITA) said.

While South’s exports to the North dropped 9.4 percent to $330 million, imports from the North jumped an impressive 63.3 percent to $390 million.

The trade group credited the big import leap to the expanded number of items produced in the industrial complex located at North Korea’s western border city.

But unlike the positive performance of the two-way trade, the Mt. Geumgang tour business has dropped 7.2 percent.

South Korean companies are currently employing about 15,000 North Korean workers in the Gaeseong complex and the number is expected to rise as the facility undergoes expansion.

Symbolic of the cooperation between the Cold War rivals, the industrial park began construction in June 2003 and its operation started the following year.

Korea Times
7/19/2007

The European Union shunned South Korea’s request to include goods made in an inter-Korean industrial park in North Korea in a potential free trade agreement between the two sides, Seoul’s chief negotiator said.

South Korea launched free trade talks with the 27-country economic bloc in Seoul in May, only a month after it successfully concluded similar trade talks with the United States. A second round of South Korea-EU free trade talks began in Brussels on Monday.

“The EU side told us that it’s difficult for trade negotiators to deal with the Gaeseong issue because it’s complex legally and politically,” Deputy Trade Minister Kim Han-soo told reporters on the third day of the five-day negotiations this week, referring to the South Korean-built industrial complex in the North Korean border city of Gaeseong.

But the EU left open the possibility of a compromise, depending on the progress both sides will make in upcoming meetings, Kim said.

Before the second round began, Kim had expressed optimism over the Gaeseong issue.

“The Gaeseong issue is one of our top priorities. So we will keep pushing the EU to accept our request,” he said.

South Korea considers the industrial park, located just north of the world’s most heavily fortified border, to be a model for inter-Korean economic cooperation. About 15,000 North Korean workers are employed by 23 South Korean companies, producing garments, kitchenware and a number of other goods.

The industrial park is one of the prominent symbols of inter-Korean reconciliation efforts following a landmark summit in 2000 between then South Korean president Kim Dae-jung and North Korean leader Kim Jong-il.

The Gaeseong matter was one of thorniest issues during the 10 months of tough negotiations between South Korea and the U.S., but the two sides made an artful compromise, allowing them to discuss the issue later, depending on progress in international efforts to dismantle the North’s nuclear weapons program.

Kim and his European counterpart, Ignacio Garcia Bercero, director of bilateral trade relations at the European Commission, are leading the negotiations to move a deal forward between South Korea and the EU.

This week’s talks were centered on the pace of tariff reductions on automobiles. The EU asked South Korea to phase out its 8 percent tariff on auto imports within three years, instead of the seven years suggested by Seoul. according to a South Korean delegate who asked not to be named.

Other potential sticking points in the negotiations are South Korea’s protective pharmaceuticals and cosmetics markets. In addition, the EU wants better access to South Korea’s services market, particularly for law firms and hospitals, Kim said earlier.

Some progress has been reported, as the EU agreed to soften its anti-dumping rules for South Korean goods.

“So far, talks have been underway at a pace that we expected,” Kim told reporters. However, he admitted this week’s negotiations were aimed at clarifying each side’s positions, rather than bargaining.

No discussion was held on the agriculture sector. South Korea initially offered to exclude some 250 agricultural products such as rice, pork and chicken.

Officials at the EU delegation were unavailable for comment.

The EU is the second-largest trading partner of South Korea, with US$79 billion in bilateral trade in 2006. Unofficial studies suggest a deal would boost the figure by as much as 40 percent.

A third round of talks was scheduled for September in Brussels.

NY Times
CHOE SANG-HUN
7/13/2007

A South Korean ship loaded with 6,200 tons of heavy fuel oil left for North Korea on Thursday under an agreement intended to end the North’s nuclear program.

The United Nations’ chief nuclear inspector said the North was expected to begin shutting down its main nuclear facilities early next week, after four and a half years of operation, during which time enough plutonium was thought to have been produced to make several atomic bombs.

The ship is expected to arrive at Sonbong, a port in northeastern North Korea, on Saturday, the same day a team of inspectors from the United Nations International Atomic Energy Agency is scheduled to arrive in the North to monitor and verify the shutdown.

Mohamed ElBaradei, the director general of the atomic agency, told reporters in Seoul that shutting down five nuclear facilities in Yongbyon, 62 miles north of Pyongyang, the capital, would not be difficult and should be completed “within maybe a month or so.” His agency and North Korea have already agreed on the procedures.

The shutdown would be significant because it would halt the North’s only declared program for producing fuel that can be used in nuclear weapons. The five facilities to be frozen in Yongbyon, including the country’s sole operating nuclear reactor and a radiochemical laboratory, can yield more than 13 pounds of plutonium a year, enough for one atomic bomb, according to experts.

But the steps to be taken after the initial freeze of the nuclear program remain “very much open questions,” Dr. ElBaradei said. Those include whether North Korea will provide the agency with a complete inventory of its nuclear materials, and when it might return to the Nuclear Nonproliferation Treaty.

“It’s going to be a very long process,” he said. “It’s going to be a complicated process. How smoothly the rest of the operation will go very much depends on how progress will be made in six-party talks.”

Chief envoys to the six-nation nuclear talks will meet in Beijing next Wednesday and Thursday, the Chinese Foreign Ministry said. The envoys, gathering for the first talks since March, were expected to discuss moves beyond the reactor shutdown.

North Korea agreed to shut down its Yongbyon facilities in a February agreement with the United States, South Korea, China, Russia and Japan. The deal called for shipping 50,000 tons of fuel oil to North Korea, and South Korea volunteered.

It plans to complete shipping the oil by early August, starting with the installment on Thursday.

North Korea indicated last week that it would undertake the long-delayed shutdown after the first shipment arrived.

When United Nations inspectors return to Yongbyon, they will face the same problems they had faced there before they were expelled in late 2002. They will put in seals, install cameras and leave monitors to ensure that the facilities remain shut. But they will not be allowed to collect samples or access North Korean data, much less travel around the country, to determine how much nuclear material North Korea has produced in Yongbyon or elsewhere.

The five-megawatt reactor in Yongbyon began operating in the mid-1980s. When suspicions about North Korea’s nuclear activities emerged in the early 1990s, a key dispute was how much plutonium had been produced at Yongbyon until then — 90 grams, about 3 ounces, as North Korea reported to the I.A.E.A., or up to 10 kilograms, about 22 pounds, as the agency suspected.

The dispute has never been resolved, although North Korea agreed to suspend operations at Yongbyon in an agreement with the United States in 1994. The accord collapsed in late 2002, when North Korea expelled the United Nations inspectors and restarted the Yongbyon operation.

North Korea has since claimed to have taken spent fuel unloaded from the reactor and reprocessed it into plutonium. Last October, it conducted its first nuclear test.

“It remains an unanswered question: how much plutonium has North Korea so far produced?” said Lee Un-chul, a nuclear scientist at Seoul National University. “North Korea won’t easily give up its operational data.”

Korea Herald
7/10/2007

An increasing number of foreigners have visited an inter-Korean industrial complex in the North Korean border city of Gaeseong this year as the North’s relations with foreign countries thaw after the communist state took steps to denuclearize, Yonhap News Agency reported.

In the first half of this year, 324 foreigners, including ambassadors and potential investors, toured the capitalist enclave where South Korean businesses use low-cost, skilled North Korean workers to produce goods, according to government data released Tuesday.

“The Gaeseong industrial complex combines the South’s capital and technology with the North’s labor and land to show foreigners the future of the Korean Peninsula,” a Unification Ministry official said.

Only five foreigners visited the complex in 2005 when the North first permitted foreign visits. In the first half of last year, the number increased to 295, but it dwindled to 104 in the second half as North Korea conducted missile and nuclear weapons tests.

The industrial complex, the crowning achievement of a landmark summit between the leaders of the two Koreas in 2000, is one of two major cross-border projects that South Korea has kept afloat in spite of United Nations sanctions against the the North following its nuclear weapons test in October. The two Koreas also run a joint tourism project at the North’s scenic Mount Geumgang on the east coast.

N. Korea Refuses to Accept Visitors
Korea Times
Jung Sung-ki
7/10/2007

South Korea’s Unification Ministry said Tuesday that the operation of the inter-Korean industrial complex in North Korea’s border city of Gaeseong will be not affected by Pyongyang’s abrupt cancellation of scheduled events for South Korean visitors this week.

On Monday, North Korea asked South Korea to postpone South Koreans’ visits to the economic zone without specifying any reasons, ministry officials said.

Some local media reported various speculations about the North’s ulterior motive. The DongA Ilbo newspaper said North Korean leader Kim Jong-il could visit Gaeseong and that might be a reason for the cancellation.

“The North didn’t specify reasons, but company executives and workers in Gaeseong are commuting to the complex freely as usual,’’ ministry spokesman Kim Nam-sik told reporters.

About 100 South Korean government officials and journalists were scheduled to visit the business compound Tuesday, followed by visits by hundreds of South Korean business officials on Wednesday and Thursday.

The Gaeseong complex, just north of the heavily fortified Korean border, is considered one of the main achievements of the landmark inter-Korean summit in 2000. The zone is called a testing ground for mixing South Korean capitalism and technology with the North’ cheap labor.

Twenty three South Korean firms produce goods ranging from clothes to kitchenware there, employing about 15,000 North Korean workers. The number of North Korean employees is expected to increase to more than 350,000 when the complex becomes fully operational by 2012, officials said.

Monthly production in the complex exceeds $10 million.

The inter-Korean economic zone has gained attention from foreign countries with the number of foreign tourists steadily increasing, according to the ministry.

Korea Times
Ryu Jin
7/6/2007

A campground in the Mt. Geumgang resort complex in North Korea will be open again for the hot summer season from July 10 to Aug. 25, according to Hyundai Asan, the South Korean operator of the tour program.

Visitors can spend two nights and three days on the Geumgang-san Beach in the scenic resort area at 180,000 won ($195) for an adult, which includes breakfasts and trips to the mountain area.

Seated at the lower edges of the mountain, the sandy beach stretches some 1.2 kilometers along the East Coast and can accommodate various sizes of tents for a combined number of about 250 to 300 campers per night.

Groups of visitors can sit around a campfire in the night after enjoying various daytime water activities such as motorboat, jet-sking and rock-climbing with additional fees. A pass for all the aquatic rides cost $25 per adult ($20 for a group of more than 30).

Mt. Geumgang, which has long held both aesthetic and spiritual allure for Koreans, can be divided into three parts: Naegeumgang (inner, western part), Oegeumgang (outer, eastern part) and Haegeumgang (seashore part).

Since the first tour to Mt. Geumgang in 1998, a growing number of visitors have made the trip from the South to the resort area. Hyundai Asan said the cumulative number of tourists exceeded 1.5 million in early June, after it began the new Naegeumgang tour.

The Geumgang-san Beach was open to South Korean visitors from 2002 and the campground has been available since 2005. Last year, however, it didn’t draw many visitors from the South due to the rainy spell as well as the political situation in the aftermath of North Korea’s missile tests.

“We expect a larger number of visitors would go camping in the Mt. Geumgang resort complex this year since inter-Korean ties are relatively good,’’ a Hyundai Asan spokesman said.

But he added cooking would be banned in the campground this year. “Campers were able to use portable burners for instant noodles last year,’’ he said. “However, cooking won’t be allowed this year for environmental and safety reasons. Visitors can use restaurants for lunch and dinner.’’

Usual prices for Mt. Geumgang are set from 420,000 won to 450,000 won including two nights hotel stay. But those for the camping tour are relatively lower though it also includes climbing the mountain.

Korea Times
Tong Kim
7/1/2007

Recently I visited Gaeseong with a South Korean humanitarian group that provides anthracite for fuel to underprivileged people in both Koreas. The group carries out a voluntary campaign in the name of “sharing love and anthracite.’’ It so far has provided the poor with over ten million pieces of processed anthracite.

Our trip to Gaeseong was to deliver another 50,000 pieces of processed anthracite in five large trucks. From Seoul we drove only about 45 minutes to reach the southern border of the Demilitarized Zone (DMZ). I had passed through the Panmunjeom Joint Security Area a couple of times traveling to Pyongyang before, but it was the first time for me to travel on the paved direct highway to the Gaeseong Industrial Complex.

Upon arrival at the Bongdukni railroad station _ about a few miles north of the complex _ we were welcomed by the vice chairman of the Gaeseong People’s Committee, who appreciated the provision of anthracite as well as our offer to help North Koreans unload the anthracite.

From Bongdukni we went to Gaeseong City, where we visited several famous historic sites of the old capital of the Goryeo Dynasty (918-1392), including the Seonjuk bridge, where the stain of bloodshed by a king’s royal servant remains, still detectable. Standing at the courtyard of Sungkyunkwan, which was the dynasty’s highest royal educational institute, were gigantic ginkgo trees more than a thousand years old.

The buildings were impressively well maintained. On display inside the buildings were neatly arranged historical artifacts, which help visitors see what life was like in Korea a millennium ago. With other cultural assets, like the royal tombs and an old Buddhist temple, I thought Gaeseong would present itself as an excellent tourist attraction.

Then we went to a “hotel district’’ where many traditional tiled Korean homes remain undamaged as if they had never withstood the Korean War. An able tourist guide told us that these buildings are now used as lodging for tourists. We were led into one of the homes, where we had a good traditional dinner served in Korean brassware.

From there we went to the complex, which I knew was controversial from a political perspective since its inception. Opponents ask why South Korea should help North Korea when it spends scare resources on the development of missiles and nuclear weapons. Proponents argue it is a constructive approach to the eventual resolution of security and political issues.

After I saw the vast area of the industrial park _ one million pyeong (approximately 25 square miles) _ I felt there would be no way to reverse the course of inter-Korean economic cooperation. Under a 50-year lease, Hyundai Asan has cleared the land by leveling off the hills and filling the rice paddies and fields, and it is still building the necessary infrastructure to support the industrial park.

At present 22 South Korean companies _ mostly small- and medium-sized firms _ are operating in the complex and five new plants are under construction. On this North Korean territory, about 12,000 North Korean employees are working with 680 South Koreans, who are largely managers. By 2012, the complex is expected to employ over 100,000 North Koreans.

These companies produce goods _ including shoes, clothes, watches, kitchenware, plastic containers and electric cords _ mostly for South Korean consumers. Under a neo-liberal policy pursued by the ROK government, the complex makes sense as the average monthly wage is only $57, which is only half of Chinese labor costs and less than 5 percent of South Korean counterparts’ salaries.

After an overview briefing at the Hyundai Asan Control Center, we went to the Shinwon Clothing Plant, where 880 North Korean women _ who looked between 20 to 40 years-of-age _ were working hard concentrating on their jobs along the 15 production lines on two floors. There were no dividing walls on each floor. The uniformed workers all looked healthy and productive.

The plant’s manager told me he has only nine people from the South to work with the North Koreans. His company began operating in February 2005 with 330 workers on two production lines. He said his company is satisfied with the productivity and the workmanship of its North Korean employees. His company provides many facilities for the workers, including a large dining hall where the workers receive free meals, recreation rooms, showers and even a Christian chapel.

Perhaps the future of the expanding industrial park depends very much on the exportability of its products to overseas markets including the United States. This brings up two points: resolution of the North Korean nuclear issue and the inclusion of the complex as an “outward processing zone’’ as discussed but still pending resolution in the agreed Free Trade Agreement with the United States.

Without exportability, which I doubt would be fully feasible before North Korean denuclearization, the industrial complex may not be able to attract big international companies who keep looking for lower labor costs to compete in the contemporary neo-liberal global market.

There are other problems with the inter-Korean industrial park, including the transparency of the payment system, labor practices and environmental concerns. But these are only peripheral issues compared to the issue of war and peace, which also affects the South Korean economy. As the nuclear issue seems to be moving forward, and as I believe it will be resolved at the end, I do see good prospects for success of the complex.

We went to Gaeseong, a city of 300,000 people, through some poverty-stricken rural villages. It was heartbreaking to see North Korean people who looked undernourished and poorly sheltered in their rundown homes with broken windows. I saw children looking skinny, underdeveloped and hungry _ walking home after school, with their arms on the shoulders of their buddies, just like I used to do when I was their age.

I visited North Korea many times but I never had an opportunity to observe the economic plight of the North Korean people in the rural areas. I could see only a little bit of the deprivation last month when I went to Inner Geumgang Mountain through a few under-populated villages beyond the DMZ.

I know the conservatives blame the North Korean regime for this. My problem with them is such blame or hard-line policy has not helped alleviate the hardship of the poor people whose poverty is not their fault. I support humanitarian aid to the North, despite some negative views.

I know North Korea is trying hard to improve its economy in order to better feed, clothe and house its people. I have seen some encouraging indicators of change in North Korea. Once it feels free of perceived threat from outside, I expect the North to give up its nuclear program and concentrate on transforming the economy, which will eventually lead to political and social transformation as well.

It is time to work harder to resolve the security issue, while providing minimum humanitarian aid to the people in the North. Providing anthracite is a good example of humanitarian assistance, which I believe should enlist broad support from the South Korean public. What’s your take?

Tong Kim is former senior interpreter at the U.S. State Department and now a research professor at Korea University and a visiting scholar at Johns Hopkins School of Advanced International Studies (SAIS).

Yonhap
7/2/2007

In a sign of burgeoning economic ties, a group of South and North Korean officials jointly visited South Korean companies in China and Vietnam, the Unification Ministry said Monday.

The delegation consisting of seven South Koreans and as many North Koreans working at a joint management office of the Kaesong industrial complex visited the companies in Shanghai, Shenzen, Guangzhou, Hanoi and Ho Chi Mihn City for 10 days from June 19. They were given tours and received briefings on the companies’ operations, the ministry said.

“It was a good opportunity for North Korean economic officials to learn from rapidly developing socialist countries,” a senior ministry official said, asking to remain anonymous. “They must have shared the need to further promote inter-Korean economic ties.”

It marks the first time that South and North Korean officials made an overseas trip together to assess the development of South Korean companies, the official added.

In the North Korean border city of Kaesong, a capitalist enclave, South Korean businesses use low-cost skilled North Korean labor to produce goods. Monthly production in the complex exceeds US$10 million.

Currently, 23 South Korean companies employ about 15,000 North Korean workers at the site developed on a trial basis. These include construction workers and workers at a management office. The number of North Korean workers is expected to increase to more than 350,000 when the complex becomes fully operational in 2012.

Korea Times
Ryu Jin
6/26/2007

Tourists who want to visit the inner part of Mt. Geumgang in North Korea, better known as “Naegeumgang’’ in Korean, will be able to leave for the resort area on any day of the week, starting next month.

Hyundai Asan, the South Korean operator of the inter-Korean tourism project, said Tuesday that the Naegeumgang tour, which has so far been carried out three times a week, will be available everyday from July 1.

North Korea had previously agreed to accept only three groups of tourists every week. Each group, composed of no more than 150 visitors, crossed the border every Monday, Wednesday and Friday for a two-night, three-day stay there.

But the two sides finally decided to increase the tours, as applicants have risen sharply in recent weeks since the new tour program was officially launched on June 1.

“We plan to bring 30 groups of visitors to the resort complex on our Naegeumgang tour next month,’’ a Hyundai Asan official said. “But tickets have already been booked almost fully.’’

Mt. Geumgang, which has long held both aesthetic and spiritual allure for Koreans, can be divided into three parts: Naegeumgang (inner, western part), Oegeumgang (outer, eastern part) and Haegeumgang (seashore part).

Since the first tour to Oegeumgang in 1998, an increasing number of visitors have made the trip to the resort area. Most were South Koreans with fewer than 8,000 visitors coming from 48 other countries.

North Korea allowed the inner part of the mountain, Naegeumgang, to be visited toward the end of this year, which military and political experts evaluate as a “bold step’’ when its strategic importance is taken into account.

Hyundai Asan said early this month that more than 1.5 million tourists have visited Mt. Geumgang in the past decade. The company anticipates the number of tourists that visit the mountain resort this year to exceed 400,000.

The Naegeumgang tour is operated from April to November for 420,000 won ($450) per person including a two-night stay in a hotel, which is just 30,000 won higher than that of the tour program to Oegeumgang and Haegeumgang.

On the first day, visitors check in at the hotel and enjoy a North Korean acrobatics show and dine on unique North Korean cuisine. On the second day, tourists explore the beauty of Naegeumgang, followed by a brief trip to Oegeumgang on the last day.