Will China Take Over Mt. Kumgang Tours?

      April 12, 2010 12:14

      North Korea looks determined to hand lucrative package tours to the scenic Mt. Kumgang tours to China after an erratic campaign to resume them ended in failure. But South Korea views the prospect as little more than a threat because forecasts say that if the tours were handled from China, they would not generate enough of the cash North Korea desperately needs.

      "North Korean tours catering to Chinese visitors are primarily focused on Pyongyang and Panmunjom, though I've heard some of them include Mt. Kumgang," Unification Ministry spokesman Chun Hae-sung told reporters Friday. "We haven't been able to find out specific details."

      According to the Unification Ministry, of the total of 1.95 million tourists who visited Mt. Kumgang since 1998, only 13,000 were non-Koreans. "It takes around six hours by bus or train from Pyongyang to Mt. Kumgang," said one North Korean defector. "How many foreign tourists would be willing to make that journey?" Before inter-Korean tours were halted in 2008, around 300,000 tourists visited Mt. Kumgang each year. North Korea earned more than US$500 million from the tours from 1998 to 2008.

      The North appears mindful of the potential losses in hard currency. Instead of stripping Hyundai Asan of its business outright, North Korea told the South Korean tour operator on Thursday the contract is no longer valid because of the South Korean authorities' actions. And the South Korean assets that North Korea has seized were a reunion center operated by the South Korean government and other facilities that are not directly related to tourism, while property owned by Hyundai Asan was left untouched.

      When North Korea first announced the real estate “survey” in March, the Asia-Pacific Peace Committee, a state agency in charge of cross-border exchanges, was spearheading the move, but this time, a lower-level agency, the North's Guidance Bureau for Comprehensive Development of Scenic Spots, issued the statement, said one North Korean source. "It appears North Korea took a lot of trouble over the wording," the source added.

      It will be tough for the North to find a new partner to operate the tours in light of regulations it introduced in September 2004. Article 15 of the rules stipulates that a cancellation of land usage rights due to unavoidable circumstances requires a one-year advance notice and the reimbursement of the value of the real estate." That means North Korea must notify South Korean businesses one year in advance if it wants to evict them and must pay them back. "North Korea may grant tourism rights for another zone that does not overlap with South Korean businesses' but the new project is not likely to bring in much money," one tour operator said.

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