March 5, 2021

North Korean Resort Seeks Foreign Investors

The golf course is devoid of caddies; banks and restaurants are chained and padlocked; and empty hotel rooms have grown musty.

Income from tourism here has plummeted since a South Korean visitor was shot dead in 2008 by a North Korean soldier while wandering one night into a nearby area that North Korean officials said was a military zone. South Korea then forbade its citizens from traveling here, and the South Korean developer of the park, Hyundai Asan, had to suspend the venture, for which it had exclusive rights from this authoritarian Communist state.

Now, the North Korean government, desperate for revenue, seeks to lure other foreign investors to Mount Kumgang, against the wishes of South Korea.

A senior North Korean tourism official gave a video presentation on Wednesday night to scores of Chinese businesspeople and officials shuttled to the park on a 21-hour bare-bones cruise from the Rason region in the far north of the country. The official, Kim Kwang-yun, told foreign reporters who had been given a rare opportunity to accompany the Chinese group to this secretive country that Mount Kumgang was open to investment from anywhere.

“Last night, I explained a lot to allow foreigners to see the beautiful sights of Mount Kumgang,” Mr. Kim said as he sat beneath chandeliers in the lobby of the Kumgang Hotel, adding that he could also talk about investing “if big delegations from Europe, Africa and other countries come to the Mount Kumgang area.”

The effort by North Korean officials to bring foreign investment to Mount Kumgang is the latest move in a chess match between the two Koreas over the park, which abuts the demilitarized zone. New investment would help with infrastructure construction, and rejuvenated park operations could bolster tourist numbers. But the vast majority of the two million visitors who have come to the resort since its opening in 1998 have been South Koreans, and North Korean officials say they want to restart their partnership with Hyundai Asan. The very public wooing of foreign investors could be an effort to pressure the South Korean government to let Hyundai Asan rejoin the venture.

The North Koreans began raising the stakes on Aug. 22, when officials informed the government in the South that they were evicting any remaining South Korean employees from the park and contended that they had the right to “start legal disposal” of South Korean assets, which amount to $443 million.

The South Korean government immediately said it would take legal and diplomatic measures to protect the assets, and Hyundai Asan warned that anyone who bought facilities at the resort would be implicated in international lawsuits.

Mr. Kim said the South Korean government was responsible for the conflict by putting “unilateral restrictions on tourism” for “political purposes.” He added that the tensions would not scare off foreign investors.

“I think we already established the legal foundation for developing this Mount Kumgang area,” he said. “Whether they will invest in this area is their choice.”

An official at South Korea’s Unification Ministry said in an e-mail on Saturday that the “Mount Kumgang tourism issue cannot be resolved by the unilateral measures by the North. It can be addressed by inter-Korean dialogue.”

Once accessed by ferry and road from South Korea, the special administrative zone of Mount Kumgang is a rugged area of pine trees and waterfalls, soaring stony peaks and curving coastlines. Carved into the ubiquitous granite rock faces are gigantic slogans paying homage to the North Korean leader, Kim Jong-il, and his deceased father and North Korea’s founder, Kim Il-sung.

The South Korean government built a center here for a pilot program in which family members split by the division of Korea in 1945 and the subsequent war could meet again. But since the killing of the South Korean tourist, relations between the two Koreas have become much more strained, especially after the sinking of a South Korean naval ship for which the South blames the North and the shelling of a South Korean island last year.

The drop in tourism has been particularly hard on North Korea, which has been grappling with food shortages caused in part by failed economic policies and struggling with the effect of economic sanctions from the United Nations. The sanctions were imposed mostly at the urging of the United States, which is trying to force the North Korean leader to end a nuclear weapons program.

Edy Yin contributed research from Mount Kumgang, and Choe Sang-hun contributed reporting from Seoul, South Korea.

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