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Shim Jae Hoon

Politicizing Tourism

SHIM Jae Hoon

Sept. 26, 2005

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North Korea is about to kill the goose that lays the golden egg. It risks suspending a highly lucrative tourism trade with South Korea with an attempt to influence corporate policy of the company that runs tour business.

Pyongyang officials have demanded that Hyundai Asan Corporation, the company exclusively licensed to bring South Korean tourists to the scenic Kumgang Mountain just north of the Demilitarized Zone border, reinstate its vice chairman who has been sacked on suspicion of malfeasance. The man in question, Kim Yoon Kyu, has not been fired from the company, but removed from top chain of corporate decision-making.

Before his demotion, Kim was credited with helping open the tourism project with the North's totalitarian government. Since then, he has maintained good personal relations with its dictatorial leader Kim Jong Il. As a close assistant to Hyundai Asan chairman Chung Mong Hun at the time of Chung's death in 2003, Kim Yoon Kyu is reported to be privy to secret negotiations that led to exclusive licensing of the project to Hyundai.

Whatever the truth behind the story, Pyongyang's demand for reinstating Kim's corporate position is said to have come directly from Kim Jong Il.

Mrs. Chung, who has taken over the company following her husband's death two years ago, was so displeased with the North's interference that she posted a statement on her company website saying she would rather end the tourism project than allow the North to challenge her corporate prerogative of hiring and firing managers. She has every right to feel that way; she is rightly convinced that once she allows the North to interfere with her management, then she would lose her independence.

She's right. Pyongyang's demand is untenable, it's politically unacceptable. Kim Jong Il apparently is using his licensing power not only to influence Hyundai's corporate decision but is also trying to temper with Seoul's policy on political relations. And yet, the South's unification minister Chung Dong Young, under excuse that tourism project is vital for improving detente with the North, has himself sought to improperly intervene in this episode. He has involved the government in "repairing" the situation by discussing the matter with North Korean officials. In doing so, he is dragging government power into the domain of private business.

Mrs. Chung should firmly reject Kim Jong Il's machination. At the same time, she should tell her own government to keep out of her business. In an open, democratic system, the government has no right to dictate how a business company should hire or fire its executives. South Korea has seen enough of this deplorable practice in the past. Now is the time to make a new departure.

It also makes sense for Kim to stop interfering with this business. Tourism revenue from the South has been a vital source of hard currency earning for the impoverished Stalinist state. At the peak of its famine in 1995-1997, which reportedly killed up to 10% of its 22 million population, Hyundai (founded by a onetime peasant from the North) proposed tourism as a way of providing cash source to keep its economy from collapsing. Kim Jong Il accepted the deal, albeit on condition that tourists stay away from poking their nose into the miserable life of ordinary North Koreans. In 1999, tour operation stopped for 40 days when North Korean "guides" (they are in fact secret agents) detained a Seoul housewife for saying the life in the South, contrary to official propaganda in the North, was a lot better than that under Kim Jong Il's socialist paradise.

It demonstrates how nervous the Kim regime is to any suggestion of freedom and openness. For all that, however, he is clearly hooked on dollar bills from the South. Over a million tourists have visited the Kumgang resort area (they are under strict order not to stray or wander into North Korean villages), bringing at least US$900 million in licensing and entry fees since 1998, according to Hyundai. An additional US$600 million has been invested for building roads, hotels and berthing facilities in the area, bringing the total amount spent by Hyundai Asan to US$1.5 billion.

It's a lot of money for a country whose entire exports in 2004 amounted to little more than US$1 billion. Certainly, Kim Jong Il can be expected to place his self-interest above political impulses. In a transparent move to keep the tourism business in the South quarrelling each other, he has offered the tour project to a rival company in Seoul, but to no avail. To no one's surprise, no company in the South has taken the bait.

So tension continues between Mrs. Chung and the North. Hyundai - and for that matter the administration of President Roh Moo Hyun - can learn a lesson or two from this episode. Their top priority should go about protecting the sanctity of private business. Under no circumstance should they allow the Stalinist system in the North to dictate its terms on private business in the South.

Shim Jae Hoon is a Seoul-based columnist and political commentator. The views expressed are his own and do not represent the views of the publications that carry his columns.
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