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Kumgang resort getting a South Korean Bank

Thursday, June 22nd, 2006

From Yonhap:

S. Korean lender Nonghyup plans to open branch on N. Korea’s Mt. Geumgang in September

SEOUL, June 22 (Yonhap) — South Korea’s National Agricultural Cooperative Federation(Nonghyup) said Thursday it plans to open a branch at the Mount Geumgang resort in North Korea in September.

Nonghyup will open the Mount Geumgang branch on September 15 with three South Korean employees and two North Korean employees, it told the National Assembly’s Agriculture, Forestry, Maritime Affairs and Fisheries Committee.

The state-run financial institution received approval on May 4 to open the branch at the resort from South Korea’s Unification Ministry.

Nonghyup plans to build a two-floor building for its branch and to operate it 365 days a year without holidays.

In 2004, Woori Bank launched a branch in an industrial complex in the North Korean city of Kaesong, the first case of a South Korean lender setting up a branch in the North.

Posted in Banking, International trade, Mt. Kumgang Tourist Special Zone, South Korea | 2 Comments »

Hyunmdai may expand tours in DPRK

Saturday, May 20th, 2006

From Joong Ang:

Hyundai Asan Corp., a Korean company spearheading inter-Korean economic projects, said yesterday it is pushing to expand its tour program for a scenic North Korean mountain resort open to South Koreans.

North Korea has opened the outer part of Mount Keumgang on its east coast to South Koreans since 1998. Hyundai officials said the North has agreed to consider opening the inner side as well to South Koreans.

Before developing full-fledged tours to the inner side of the mountain, or Naegumgang, Hyundai Asan plans to hold an experimental tour to the area on May 27.

Hyundai Asan hopes that the new tours will help it bring more South Korean tourists to the North. More than 1 million South Koreans have visited the resort since 1998 but it was not enough to break even.

Hyundai Asan executives, including Hyundai Group chairwoman Hyun Jeong-eun, and North Korean officials will join the test tour.

The new tours to be developed cover 50 kilometers of trails dotted with ancient temples and valleys that would give visitors a new sense of the beauty of the craggy resort, Hyundai Asan officials said.

Posted in Mt. Kumgang Tourist Special Zone, Tourism | Comments Closed

American visits Kumgang

Thursday, May 4th, 2006

From the Korea Times:

Rising dramatically from the East Sea, Mt. Kumgang _ about 20 miles (32 km) north of the Demilitarized Zone (DMZ) in North Korea _ is considered by most to be the most scenic area on the Korean Peninsula. The Japanese colonists even built a direct railway line to the area for sightseeing.

I didn’t comprehend the gravity of my excursion to Mt. Kumgang with my colleagues until the South Korean military escort pulled off the side of the road for our caravan of buses at the south end of the DMZ. We crossed the four-kilometer desolate and barbed-wire covered expanse, and picked up the North Korean military escort on the other side. As we approached North Korean immigration, a soldier goose-stepped into the road in front of the bus and held out a red flag to signal the buses to stop.

Upon entering North Korea the stark change in landscape was surprising. Unique clusters of rock formations rose up from flat, treeless, sandy plains. Looming dramatically and endlessly in the distance was the epitome of all Asian mountain images _ Mt. Kumgang.

But other changes were evident, too. The area was quite rural, with small, weathered clusters of traditional Korean homes that may in fact have been quite old. Instead of cars, there were pedestrians on dusty trails, bicycles instead of motorbikes and horse-pulled carts instead of trucks.

Citizens worked the fields with their bare hands and oxen pulled plows. My immigration stamp said “Choson,’’ the name by which North Korea refers to itself and the name of the Korean Kingdom that ruled the peninsula from 1392 until 1910. I had in fact stepped back to that time.

More striking still was the abundance of North Korean soldiers _ along the road, in the farm fields and on the sides of hills. They were stationed at every road and dirt path intersecting the tourist road, which was entirely separated from the rest of the world by continuous fences. Checkpoints were everywhere, both along our road and the ordinary North Korean roads.

The North Korean hotel and park workers were shy, modest, and polite with noticeably different accents and intonation. They often gazed at me innocently, with curiosity about the presence of a Caucasian American. In one conversation a woman who knew surprisingly little about other places in North Korea mentioned that it was her dream to go to Pyongyang.

“Why haven’t you been there?” my colleague asked.

She responded with three reasons: not enough money to travel; poor conditions of transportation making it a difficult journey; and difficulty in acquiring permission to travel.

Despite her having one of the more coveted jobs in North Korea, the 200-kilometer journey from Mt. Kumgang to Pyongyang was fundamentally impossible.

Posted in Mt. Kumgang Tourist Special Zone, USA | Comments Closed

DPRK soldiers sneaking into Kumgang for treatment

Monday, May 1st, 2006

From the Korea Times:

A head doctor of Hyundai Asan Hospital in the Kumgang tourist area, which was set up to deal with emergency cases among South Korean tourists, told Unification Minister Lee Jong-seok that North Korean soldiers sometimes sneak into the hospital.

Their commander has apparently ordered them to stay away from the South Korean tourist districts, but still the ordinary soldiers come to get better medical treatment, he said.

Posted in Health care, Mt. Kumgang Tourist Special Zone, South Korea | Comments Closed

North Korean Economics Presentations at KEI

Tuesday, April 18th, 2006

Economic Reform and SEZ as Survival Strategy of DPRK
PDF: Deok Ryong Yoon.pdf
Deok Ryong Yoon

Introduction to & implications of Gaesong Industrial Complex Project
PDF: kaesong.faqs.pdf
Ministry of Unification

Gaeseong Industrial complex: Past, Present and Future
PDF: Dong-geun Kim.pdf
Speech by Dong-geun Kim, Chairman of Gaeseong Industrial District Management Committee

Gaeseong Industrial Complex : Frequently Asked Questions (FAQs)
PDF: kaesong.faqs1.pdf
Ministry of Unification, ROK

Posted in Agriculture statistics, China, Economic reform, Finance, Fiscal & monetary policy, Foreign aid statistics, Foreign direct investment, GDP statistics, International Aid, International trade, Kaesong Industrial Complex (KIC), Mt. Kumgang Tourist Special Zone, Political economy, Price liberalization, Rason Economic and Trade Zone (Rajin-Sonbong), Sinuiju Special Administrative Region, Special Economic Zones (Established before 2013), Statistics, Trade Statistics | Comments Closed

ROK government lightens Kumgang loan burden

Wednesday, March 1st, 2006

From the JongAng Daily:

The government is being criticized for easing conditions on loans funded from the inter-Korean cooperation funds that were given to the Korea National Tourism Organization for Mount Kumgang tour projects. On Monday, the government decided to lower the interest rate on a loan given to the organization in June 2001 by 2 percent.

The organization originally received a loan of 90 billion won ($93.7 million) with an interest rate of 4 percent and repayment over a five-year period, after a three-year deferment. However, the payback period has now been extended to 10 years at an interest rate of 2 percent.

The Unification Ministry said yesterday that the organization asked the government to make changes to the conditions of the loan, arguing that under the tours’ current profit structure it was unable to repay the funds. This request was acceded to.

The ministry said that after an accounting firm had reassessed the loan, the decision was made with all relevant government organizations involved agreeing to make changes to its conditions.

Nevertheless, the argument that the profit level is too low for the organization to make its payments seems weak as the number of tourists taking trips to the North’s Mount Kumgang has increased over the years.

Only 57,000 people made the trip in the year the loan was granted but by last year the number of visitors had increased to 301,000.

The organization paid the 90 billion won to Hyundai for operating rights to the Kumgang hot springs and resort. Hyundai made a payment of 29 billion won to the North, for which it had been in arrears.

In response, some civic groups argued that public funds should not be used to finance such projects in the North.

Posted in International trade, Mt. Kumgang Tourist Special Zone, South Korea | Comments Closed

Kumgang Expansion

Wednesday, February 15th, 2006

According to the Korea Times, 02-10-2006, the Kumgang tourist zone is being expanded. Here are some stats:

The Extended tour zone will reach Wonsan (Where the Japanese Chongryun ships come in)
There are plans to finalize a “master plan” of development for the area (lakes, nursing homes, beaches).
Since opening in 1998, 1.2 million south Koreans have visited
Hyundai Asan hopes to channel 2.3 trillion won ($2.37 billion) into the project through domestic and foreign investors.
Besides the tour-related issues, the two sides also agreed on a payment of $400,000 to the three victims of a traffic accident that happened late last year. It wish I could track that $400,000. It will end up in interesting places for sure. The accident happened on Dec. 27 in the tourist area, and North Korea called at first for at least $1 million in compensation. In an earlier traffic accident that killed a North Korean soldier in June 2001, $6,000 in compensation was paid.

Posted in Chongryun, Foreign direct investment, Mt. Kumgang Tourist Special Zone | Comments Closed

Tours to North Korea to Enjoy Boom

Friday, December 30th, 2005

Korea Times
Kim Rahn
12/30/2005

It has been eight years since South Koreans started visiting Mt. Kumgang, a scenic attraction in North Korea on a cruise program organized by Hyundai Asan.

Hopes and doubts about the success of the trips continue, as the tour program is strongly influenced by international and local developments. And many ups and downs have occurred over the past eight years.

The number of visitors plummeted during difficult times such as when a South Korean woman visitor was detained in 1999, when former Hyundai chairman Chung Mong-hun committed suicide in 2003, and when the North cut the quota of daily visitors by 50 percent last year.

Numbers rose when the government subsidized costs for students, the disabled and dispersed families in 2002, and when an overland bus route was developed in 2003.

Despite obstacles, the number of South Korean visitors to the scenic mountain resort passed the million mark last June.

Moreover, the communist country plans to open more tourist attractions to South Korea. Kaesong, the capital of the ancient Koryo Kingdom, Mt. Paektu on the border of North Korea and China, and maybe even the North Korean capital Pyongyang are on a possible list of tourist attractions for South Korean travelers.

Kaesong

At the end of last August, 500 South Korean tourists visited Kaesong, the old capital of the Koryo Kingdom (918 A.D.-B.C.1392), for the first time since the end of Korean War in 1953 on a one-day pilot trip.

It took only about two hours from central Seoul to the North Korean city, just above the Demilitarized Zone (DMZ) separating the two Koreas, by bus on an overland route including entry procedures. Its easy access is expected to be one of the attractive features for South Korean travelers.

“Kaesong has lots of attractions from the rich cultural heritage of 500-years of Koryo history,’’ Shin Hee-soo, executive director of the Korea Tourism Organization (KTO)’s inter-Korea tourism department, told The Korea Times.

The historic sites include Sonjuk Bridge, where high-ranking Koryo government official Chong Mong-ju was killed by Lee Song-gye, founder of the Choson Kingdom and the Confucian school of Songgyungwan. Parts of the school are now used as a Koryo museum.

Also located here are Kaesong Nasong, a fortress, and the royal mausoleum of King Wanggon, founder of Koryo. Natural resources such as Mt. Songak and Pakyon Falls are also popular.

“Travelers are also able to see North Koreans’ lives, as the tour buses pass Kaesong’s downtown. It will be another attraction, especially to the old people whose hometown was Kaesong,’’ Shin said.

Mt. Paektu

Last July, the KTO, Hyundai, and the North’s Asia-Pacific Peace Committee agreed to allow South Koreans to visit Mt. Paektu on the border of North Korea and China.

The KTO provided about 8,000 tons of asphalt pitch to the North to establish the tourism-based infrastructure on the mountain, including paving the runway of Samjiyon airport near the mountain.

The tour operators planned to conduct a pilot tour last year, but it was delayed until next April or May due to the dispute between the North and Hyundai over the dismissal of former Hyundai vice chairman Kim Yoon-kyu.

Last month, 15 delegates from the South inspected the repair work at Samjiyon airport.

The mountain is breathtakingly beautiful, comparable to the beauty of Mt. Kumgang. Some 20 peaks higher than 2,500 meters surround “Chonji,’’ the mountain-top crater lake.

Sunrise seen from the top, especially in August and September, is one of the must-sees of the trip to Mt. Paektu. Some 200 square meters of hot springs never freeze, even during winter.

“Mt. Paektu is more than a tourist attraction. It has a special meaning of the `spirit of Koreans.’ Many people have visited the mountain from the Chinese side, but the scene from the North’s side gives a different impression,’’ Shin said.

Pyongyang

The North Korean capital may not be opened as a separate tourist attraction but is likely to be visited if the tour program for Mt. Paektu includes Pyongyang as a stopover, a Hyundai Asan worker said.

In October last year, about 140 South Koreans visited Pyongyang on a pilot trip. The city has many historic sites from the ancient Koguryo Kingdom and Tangun, the legendary founding father of Korea.

Their visit was, however, mainly focused on Mt. Myohyang near the capital, which is famous for autumn foliage.

Shin pointed out that the reclusive regime is not likely to open its capital wide to South Koreans, adding that visits may be made in the case of big events, such as the “Arirang’’ mass games which were held last year to celebrate the 60th anniversary of the founding of the Workers’ Party.

Obstacles to Trip to North Korea

The trip to the North has obstacles to overcome. The tours mainly target people whose homes were in North Korea or whose family members are still there.

But the numbers of such people are limited. The tours need other kinds of visitors to be successful. Besides the attraction of entering a `forbidden’ land, North Korea lacks features of interest to visitors.

A survey showed that 95 percent of the travelers to Mt. Kumgang were traveling there for the first time, indicating the small number of returning visitors. “Establishing golf courses and opening a beach at Mt. Kumgang are part of the efforts to increase repeat tourists,’’ Shin said.

Restrictions by North Korea also dampen the enjoyment of South Korean visitors, Shin pointed out. Visitors’ activities are strictly regulated, and the trips are limited to special times and places.

The trips to the North require harmony between the two governments, the people’s support, and a sense of duty as a “plus alpha’’ factor, he stressed.

Posted in Kaesong Industrial Complex (KIC), Mt. Kumgang Tourist Special Zone, Special Economic Zones (Established before 2013), Tourism, Transportation | Comments Closed

Kumgang update from Lankov

Tuesday, November 8th, 2005

Here are the highlights:

1. In June 2005, Hyundai conformed its 1 millionth visitor to Kumgang.
2. January 1999, soon after the launch of the project, Hyundai Asan leaders stated that by the end 2004 there would be an accumulated 4.9 million visits to the North.
3. Managers predicted that in 2004 alone some 1.2 million tourists would visit the Kumgang Mountain Project. The actual number of the visits in 2004 was 273,000
4. The project was first conceived in 1989, when Chung Ju-yung, the founder of the Hyundai Group, became the first South Korean industrialist to visit the North.
5. Financially, the North Koreans have been doing very well. According to the initial agreement, the Hyundai Group would build all the infrastructure in the zone (presumably including the fences to keep the South Korean visitors under control), and pay $12 million every month as fee for the use of the area. Some additional income was earned by the North through the sale of grossly overpriced local products and souvenirs.
6. Contrary to initial expectations, South Koreans were not too eager to spend their short vacations behind barbed wire.
7. in the late 1990s a cheapest three night package cost about 700,000 won
8. In April 2001 the Hyundai Merchandise Marine Company halved the number of trips available. It was also having trouble making payments to the North Korean partners, too.
9. However, the government simply could not allow it to collapse: by that time the Kumgang Project had acquired a huge symbolic importance. It was salvaged by a massive government intervention, and stayed afloat largely because the Blue House (and also a large part of the public) needed a symbol of cooperation, at whatever cost to the taxpayers.

Posted in Mt. Kumgang Tourist Special Zone | Comments Closed

In North Korea’s isolated tourist zone, a temple rises

Tuesday, October 4th, 2005

Christian Science Monitor
Donald Kirk
10/4/2005

Its South Korean funders say it offers potential for cultural exchange. But the monk who oversees it readily admits no North Koreans may visit.

As they lead visitors along a trail below craggy rocks inscribed with praise for the late “Great Leader” Kim Il Sung, young North Korean guides offer a carefully crafted narrative.

They criticize President Bush. They take on US policy. And last weekend, they appeared eager to denounce the dismissal of Kim Yoon Kyu, who is currently under investigation for fraud. The South Korean executive worked for more than 10 years to develop this unusual tourist zone on the east coast several miles above the demilitarized zone that separates North and South Korea.

“We are willing to reduce the number of tourists coming here as an expression of our confidence in him,” says Koo Eun Hyun, a smiling 20-year-old, repeating the North’s demand for reinstatement of Mr. Kim as president of Hyundai Asan, part of the Hyundai group, which is investing $1 billion in building the complex.

Mr. Kim led the project, now subsidized by the South Korean government, from the time the first shiploads of visitors sailed from South Korea seven years ago. Tourists now travel by newly paved road, and Hyundai Asan in June announced the millionth visitor – far short of the 5 million it had hoped for.

Indeed, the project loses vast amounts of money, and is likely to lose still more. The standoff over Kim’s dismissal is escalating amid a South Korean investigation into alleged fraud in economic projects in the North – including whether some funds wound up in the hands of North Korean officials – prompting the North to cut the quota of tourists from 1,200 to 600 a day.

Perhaps as a result, Kim Young Hyun, a Hyundai Asan vice president, prefers to talk about a $10 million project, largely funded by South Korea and Hyundai Asan, to rebuild a Buddhist temple complex inside the zone that was largely destroyed in the Korean War. “Buddhism is traditionally the religion for Koreans,” he says. “Cultural exchange can be the foundation of economic exchange.”

The Venerable Jejeong, the scholarly South Korean monk who oversees the complex readily admits that North Koreans are banned from the complex, just as they are from the rest of the zone, except when they come to work. Those few North Koreans on the site, he says, “ask questions about history but do not ask other questions.”

In fact, he says, he’s never talked to North Koreans outside the zone and has no idea how freely – or if – they can practice their religion. Still, he shares the optimism of South Korean authorities about the future.

“We can minimize the differences and find common ground,” says Mr. Jejeong, who has practiced Buddhism in Thailand and San Francisco. “Currently our educational systems are completely different. North Koreans are not interested in religion.”

Jejeong places his hopes for opening the temple to worship “after unification.” He cites an easing of religious restraints in China. “The North Koreans may be influenced by China indirectly,” he muses.

In the meantime, the temple serves as a monument to North Korean propaganda. A plaque in front of the skeletal outlines of new buildings says that Kim Il Sung and his wife, the mother of current leader Kim Jong Il, visited on Sept. 28, 1947. The plaque blames the leveling of the complex on US bombing.

But for now, North Koreans would rather prove their authority over Hyundai Asan than hark back to the war. Tourists who visit traipse along a few familiar trails, attend an acrobatic performance, dip into baths fed by hot springs and dine in modern restaurants, all closed to North Koreans seen toiling with ancient implements in the fields beyond the wire.

They listen as guides extol the beauties of the region, all under the watchful gaze of North Koreans as anxious to parrot policy as to impose fines for littering.

“We regard [Hyundai Asan’s] Kim Yoon Kyu as a pioneer,” says Miss Koo. “We sacrifice profits for the sake of friendship.”

Posted in Civil society, Economic reform, Foreign direct investment, Mt. Kumgang Tourist Special Zone, Religion, Special Economic Zones (Established before 2013), Tourism | Comments Closed

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