North Korean Economy Watch

Yonhap
11/19/2007

A South Korean company operating businesses in North Korea said Monday it plans to add the North’s capital to the itinerary for future tours of the North’s highest peak, located on the border with China.

Hyundai Asan, the North Korean business arm of Hyundai Group, is preparing to launch tours of Mount Paekdu in May next year, after the leaders of the two Koreas agreed to establish direct flights from Seoul to the mountain at the second-ever inter-Korean summit early last month.

“We already asked South and North Korean authorities to include Pyongyang in the tour route to Mt. Paekdu,” said Yoon Man-joon, chief executive officer of Hyundai Asan.

Yoon said he was “optimistic” about adding the North Korean capital to the route because the North shared a “similar view as a business partner.”

Yoon made the remark during a press conference at North Korea’s Mt. Geumgang, where the company operates the only South Korean tourism business in the North, to mark the ninth anniversary of the start of the tourism project.

Although Yoon gave no exact timetable for the Pyongyang tours for ordinary South Koreans, company officials hinted they will probably be available in early 2009.

The Mt. Geumgang tourism program, which started in 1998, is the only one that gives foreign tourists an opportunity to easily see parts of North Korea.

Hyundai Asan is believed to pay hundreds of millions of U.S. dollars to North Korea in fees for the program, which has drawn more than 1.5 million tourists.

At the inter-Korean summit last month, President Roh Moo-hyun and North Korean leader Kim Jong-il agreed that their countries would work together on a wide range of economic projects, even though the two states are still technically at war because the 1950-53 Korean War ended in an armistice.

Korea Times
Ryu Jin
11/16/2007

The Mt. Geumgang tour business marks its ninth anniversary this Sunday. Hyundai Asan, the South Korean operator of the tour project to the resort mountain across the border in North Korea, says that it sees a more prosperous business for its 10th year.

Hyundai Asan is set to hold a ceremony to celebrate the anniversary, which comes after encouraging news such as the agreement with the North to open the 1,638-meter Biro-bong, the highest peak of the auspicious mountain, early next year.

According to the firm, a total of 1.72 million people have so far visited the “caged” area of the tightly controlled Stalinist nation over the past nine years since Nov. 18, 1998, when the cruise ship “Geumgang” arrived at the site for the first time.

A land route was opened through the heavily militarized border in 2003, terminating the cost-heavy sea travel from 2004 onwards. And North Korea opened more and more sites including “Naegeumgang” (the inner, western part of the mountain).

A company spokesman expects that the number of Mt. Geumgang travelers this year, which has already exceeded 300,000 as of October, to reach above 350,000 by the end of the year, a new record.

Hyundai Asan’s successful business, despite some political uncertainties in recent years, is largely due to its endeavors to diversify tours in the limited area of the 530-square kilometer mountain.

The Naegaumgang Tour, launched last June, added more prospects for South Korean climbers who until then could only enjoy “Oegeumgang” (the outer part of the mountain) and “Haegeumgang” (the seashore).

Beside, cultural events such as concerts as well as visits to hot springs and restaurants with unique Northern cuisine, an 18-hole golf course and a duty-free shop that opened in the resort area recently, will provide visitors with additional pleasures.

However, some experts point out that there remains much to be done in order for the Mt. Geumgang tourism business, which still remains largely a symbol of inter-Korean reconciliation, to be reborn as a more lucrative business.

The complicated processes of immigration control in addition to the long journey of 4-5 hours to the eastern coastal area are among major problems that should be addressed, along with the insufficient infrastructure such as hotel accommodation.

“We plan to expand facilities in the tourism zone further, as more visitors will come to the mountain when Biro-bong is opened next year,” the company spokesman said. “In particular, we will also pay attention to more safety measures.”

The most authoritative map of North Korea on Google Earth
North Korea Uncovered: Version 6
Download it here

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.

According to the Koryo Tours website, the DPRK will once again be performing Arirang in 2008.  This time around, American tours have been extended by a full day.  Where as previous tours ran from Saturday to Tuesday, now they will run from Tuesday to Saturday (matching the days that Air Koryo flies to Beijing).

I saw the Mass Games in 2005 with Kim Jong Il himself (official coverage, Simon’s coverage).  It was quite an experience.  You will never see anything like it.

Traditionally the Mass Games have only been held on big holidays (typically on notable anniversaries: 10,15, 20, etc.)  This is now the fourth year in a row that Arirang will be performed (2005, 2006, 2007, 2008), a show that was first performed in 2003 (I think).

To the Americans out there: it is not illegal and will not put you on any kind of watch list.

Warning: flooding in October has interrupted trips the last two years!

Korea Herald
11/7/2007

Beginning in April next year, South Korean tourists will be able to climb Birobong, the highest peak of Mount Geumgang in North Korea, Hyundai Asan officials said yesterday.

According to the South Korean tour operator in North Korea, Hyundai Asan officials will meet North Korean officials later this month to discuss the specifics.

Company officials said that the Birobong course will be an extension of the current Naegeumgang course, which allows tourists to go hiking on the inner part of the mountain. This course opened in June of this year.

The popularity of this course has shot up since Hyundai Asan lifted the number of maximum visitors from 150 per week to 150 per day, company officials said.

Birobong is 1,638 meters high; the mountain itself is 40 kilometers wide, east to west, and 60 kilometers long, north to south.

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.

Yonhap
Nam Kwang-sik
11/1/2007

Hyundai Asan Co., an affiliate of South Korean conglomerate Hyundai Group, said Thursday that the number of visitors to a mountain resort that it operates in North Korea hit a monthly high in October.

A total of 64,447 people took its tours of the Mt. Geumgang resort on the east coast of the North in October, the company said in a statement, adding that it was the highest monthly figure since Hyundai Asan started the program in November 1998.

The previous monthly record was 43,000 in August 2005. In terms of one-year periods, the tours had the highest number of participants in 2005, when 301,822 people travelled from South Korea to the mountain.

“The rise in the number of tourists was attributable to the second summit between the South and North Korean leaders and growing hopes for the resolution of the North Korean nuclear issue,” a company official said.

The two Koreas held the summit in Pyongyang in early October, with the six-party talks on the North’s denuclearization making tangible progress.

Between 1998 and 2006, about 1.4 million people, including 8,000 foreigners, visited the resort, according to data by Hyundai Asan.