North Korea's state-run Korean Central News Agency said on Monday that Pyongyang will dispose of South Korean-owned properties at the Mt. Kumgang resort and banned the removal of those assets as of Monday. The North also ordered remaining South Korean staff at Mt. Kumgang to leave within 72 hours. There are 14 South Koreans remaining at Mt. Kumgang, including staff of Hyundai Asan, which operated the package tours to the resort, as well as staff at a golf course there. In April this year, the North cancelled an exclusive contract with Hyundai Asan to operate the tours that was to run until 2052, and in May it enacted a special law that gave it the right to dispose of the business. And in July, North Korea signed a memorandum of understanding ceding the tourism rights to a Korean-American businessman.
The reason why North Korea took such incremental steps to steal South Korean assets at Mt. Kumgang was probably that it wanted to gradually raise pressure to persuade Seoul to resume the tours, which were suspended after the fatal shooting of a tourist in 2008. But the South Korean government has been demanding a message of regret from the North and a pledge to prevent such incidents from happening again. That requires involvement of the authorities, but the North claims it already gave such assurances when
North Korea's hereditary Supremo-for-Life Kim Jong-il... widely considered to be more Stalinist than Stalin...
met Hyundai chairwoman Hyun Jung-eun.
North Korea now appears to have played its last card of threatening to seize the assets at Mt. Kumgang resort and pursue the tourism business on its own. But does it really think that will work? If the North were to try, for example, to use the generators Asan installed to supply power to the resort, it needs at least several hundred tourists visiting Mt. Kumgang every day to pay fuel costs.
But of the total 1.93 million visitors to the resort between 1998 and 2008, non-Koreans accounted for only 12,817, or less than 1 percent, which comes to just four a day. It was South Koreans who were willing to pay a large amount of money, including fees to cross the border, to briefly set foot on Korean soil on the other side of the demilitarized zone, But for foreigners, the resort is just a place in the middle of nowhere.
Foreign investors who were cautiously calculating the viability of investments in North Korea were probably shocked to see the seizure of South Korean assets.
| 'Shocked' would imply that the investors could not foresee something like this happening; if that's the case, they aren't very smart investors and deserve to be separated from their money. |
| Now, now, let's not be overly harsh. Say rather that they aren't very smart investors and sooner rather than later will separate themselves from their money no matter how carefully they are protected from the possibility. Darwin always wins. |