Geumgang Tourism: A Complicated Dish
by Brent, (Won-ki) Choi
of the JoongAng Ilbo staff
January 22, 2002When comparing the Mount Geumgang tour business to a dish I'd say it's part of a set menu that includes the Gyeongui railroad and the industrial complex at Gaeseong. If the government takes Geumgang off the menu the other high-minded inter-Korean business projects would have to go too - along with dreams of overland travel between the two Koreas and a special tourism zone at the scenic mountain. But if we decide to keep resuscitating the project, which is drowning in red ink, the government would likely have to pay the $24 million Hyundai Asan owes the North and make up the 2-3 billion won ($1.5-2.3 million) in losses piling up each month. What frustrates me even more is the North's thick-headed attitude and the narrow political interpretation of the tour project by the Grand National Party, the main opposition to the South's ruling Millennium Democratic Party.
When the first Hyundai cruise ship sailed across the border in November 1998, carrying the first South Korean tourists to visit the North in almost 50 years, Seoul managed to secure a strong leverage in its future dealings with Pyeongyang. Hyundai's monthly payment of $1.2 million for the exclusive privilege of operating the tours became the Pyeongyang regime's single biggest source of hard currency, naturally raising Seoul up a couple of notches at the negotiating table. The situation led to more concessions from the North, which agreed to allow a joint industrial complex at Gaeseong, and promised an overland route and special tourist zone for Mount Geumgang. Exactly 428,789 people visited the North on Hyundai cruise ships, setting a new precedent for large-scale civilian exchange between North and South. While those tourists certainly did not get much of a glimpse of everyday North Korean society, they were part of something larger. The South had managed to establish a beachhead in the North. A jumping-off point for deeper rapprochement.
Then came the bad part. The number of tourists dropped from around 147,000 in 1999 and 212,000 in 2000 to 59,000 last year. Hard economic times in the South were part of the reason, but disappointment in the limited scope - and freedom - of the tours was a bigger factor. And on March 21, Chung Ju-young, the founder of the Hyundai Group and driving force behind the tour business, died. No one would deny Mr. Chung's entrepreneurial vision or verve, but part of his legacy was the often-too-rapid expansion of the company, leaving Hyundai to face a major liquidity crisis after his death. When it rains, it really does pour.
Hyundai and its business counterpart in the North, Asia Pacific Peace Committee, agreed June 8 to abolish the fixed monthly fee, instead agreeing on $100 per tourist. They also agreed to designate a special tourism zone, which would allow the tourists greater freedom of movement, and establishment of an overland route linking the two Koreas.
About six months later what we see is the North barking at Hyundai to pay the $24 million it owes and backing away from its promise to open up its roadways. But Hyundai Asan is broke, having already used the 45 billion won in government aid it received.
Nevertheless experts and elder statesman point out the importance of keeping the Geumgang project going one way or another. Even former Foreign Affairs Minister Gong Roh-myung, who was against the project when it started, warned of possible dangerous consequences if the project comes to a halt. "Hyundai and the North should re-engage themselves to find a rational solution to break out of this critical situation," Mr. Gong said. Former Unification Minister Park Jae-kyu and Representative Lee Hong-gu, a former ambassador to the United States, have recently echoed Mr. Gong's sentiment.
To revive the moribund business, however, it takes more than wishing on a shooting star. The first thing the government must do is win support for the project from the main opposition Grand National Party.
I have nothing against the remarks of Representative Lee Gang-do, the opposition's chief policymaker, who described government aid to the Geumgang project as throwing water on parched soil. But Mr. Lee and his party do not see Mount Geumgang tourism as part of set menu; they see it as an a la carte selection. Such a perception could be dangerous in the mid and long term. What if the Kim Dae-jung administration acquiesces to the opposition demand and suspends Geumgang tours, and later a member of the Grand National Party wins the December presidential election? North Korea would likely hold the new president - most likely Lee Hoi-chang, the party head - responsible for cutting off one of its sources of foreign cash, making it harder for South Korea to take the lead in future inter-Korean policy.
An even bigger problem is, of course, the stubborn, irrational leadership in Pyeongyang. It makes sense when they say "Stick to the contract," but shouldn't they be aware by now that in a capitalist society individuals, companies and organizations that fail to produce results are doomed? All they have to do is peer across the Demilitarized Zone at Hyundai Group and Daewoo Group - the two conglomerates that long vied for first place in the domestic economy.
Pyeongyang should think again and choose whether to let the project languish and eventually meet its end or change its basic strategy to secure long-term revenue.
The North could still insist, saying, "Sorry. No pay, no play." But South Korea is a democratic society that ultimately derives its power from the National Assembly, which represents the people. There is no "dear leader" directing national resources as the moon regulates the tides. What President Kim Dae-jung needs to win the support of the opposition party is an incentive - family reunions, the Gyeongui railroad, whatever. Pyeongyang is only displaying its own ignorance by degrading Mr. Lee and his party as "scoundrels" "traitors" and "anti-unification forces".
It also seems inappropriate for the North to link its Arirang Festival with Geumgang affairs. If they wanted to invite South Koreans to their party it would've looked much more proper if they had asked South Korean authorities to sit down at Panmunjeom and officially stated their intentions. Why is it that the nation that ostensibly stands for a "straightforward march to unification" loves to sidestep issues in actual practice?
But there's still hope as neither the opposition party nor Pyeongyang has called for an immediate halt to the tours. More precisely, the opposition party called for "fully revising the business," while Pyeongyang reiterated its request for payment.
Seoul and Pyeongyang still have much to exchange with each other. Pyeongyang wants its $24 million and success with its Arirang Festival. Seoul wants the North's guarantee of construction of the Gyeongui Line and Gaesong Complex. If Seoul tries to play its cards one by one in hopes of being repaid in the end, it would only bring a backlash at home. The two Koreas should try to settle bilateral issues all at once, in a big bundle - a good reason for two sides to resume ministerial talks.