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North Korea goes for controlled burst of capitalism

Golf course projects reflect urgent pressures on regime to feed its hungry population

North Korea goes for controlled burst of capitalism

The world's most unlikely new golf destination promises a plush clubhouse, distinctive design and a vista of limestone peaks.

It also bears the unmistakable flourish of its host country. On a facing hillside, giant earthen letters hail the "Revolutionary national ideology of Comrade Kim Il Sung," the late leader of North Korea.

When the 18-hole course opens next fall in a country that once derided golf as bourgeois, it will expand a desperate experiment by cash-strapped North Korea: allowing the construction within its borders of a capitalist mini-state where the electricity is always on, the wine is from Napa and Bordeaux, and the golf balls are by Nike.

Even as he spars with the United States over nuclear weapons, President Kim Jong Il has handed two areas totaling 800 square miles to South Korean businessmen on the gamble that allowing foreigners to frolic on the beach, play golf and open factories will generate hard currency without undermining the rest of his self-proclaimed "socialist paradise."

The scheme reflects the urgent pressures on North Korea's regime to feed its people while preserving its grip on power. This tightly controlled burst of capitalism in a land where the average citizen earns less than US$5 a day is one of the changes that have unfolded since a famine killed two million North Koreans in the mid-1990s and laid bare the nation's economic distress.

The projects also pose a dilemma to South Korea, which is divided over the best way to reunite with its forbidding northern neighbor more than 50 years after the homeland was split by war and ideology. Today, South Koreans bitterly debate whether spending and investing in the North brings them closer to unification or simply extends the life of a regime that once vowed to turn Seoul into a "sea of fire."

"We South Koreans are so curious about life in the North," said Park Moon Sik, 60, a financial adviser on a three-day hiking trip to Mount Kumgang. "We do not accept their ideas, but we are able to talk to each other and have some exchange."

Pyongyang has profited from the South's craving for peace. Hyundai Asan, part of the industrial conglomerate Hyundai Group, agreed to pay the North Korean government US$942 million in the U.S. dollars it craves to buy goods overseas in exchange for exclusive rights to the area. But in polarized Korean politics, that decision to provide millions in trade has many detractors.

"If you support a dictator, people die," said Park Syung Je, a North Korea specialist at the Asia Strategy Institute, a defense think tank in Seoul. "If Stalin was gone 10 years earlier, history would be different."

On average, 850 tourists a day travel five hours by bus from Seoul through the heavily militarized border to the cluster of hotels and shops at Mount Kumgang, where they can hike in the mountains, soak in hot springs and unload wads of U.S. dollars for duty-free liquor, trinkets and electronics. Construction is under way on two new five-star hotels, a tourist railroad to run 60 miles up the North Korean coast and a "reunion center" for families split between North and South.

The golf course will be North Korea's second 18-hole course. It will boast the longest par-7 hole in the world - at 1,014 yards - and will feature an all-female corps of North Korean caddies. By next year, planners also expect to unveil guided tours of North Korea's historic city of Kaesong, near the southern border, as well as of Mount Paektu along the border with China.

Indeed, after a difficult start, the Kumgang area today is booming, if still a study in cultural collision. The Haekumgang Hotel sits in a brilliant blue ocean cove, crowned by mountains.

But signs outside the hotel warn that photos are strictly prohibited. Tourists are barred from bringing binoculars or long camera lenses, and X-ray machines at the border search for stowed equipment.

Inside a modern shopping complex, visitors use dollars and credit cards to buy DVDs of "Eric Clapton Live" and "Pearl Harbor," Anna Sui perfume and sports gear from Penn and Nike. In the evenings, they can visit the Galaxy Bar and Fantasy Land lounge at their hotels to order a US$600 bottle of California's Opus One wine, or a US$900 bottle of Chateau Lafite-Rothshild. Waitresses at the Sky Lounge will serenade guests with a karaoke rendition of "The Man Who Lives in My Heart," an ode to the Dear Leader Kim Jong Il.

But outside the walls - where tourists are barred from wandering - lies a bitter reality. Villagers scrub laundry in an icy river. With one of the lowest per capita incomes in the world, they make do with sporadic electricity and homes heated by firewood. Not a single private car is visible on the roads. At night, the resort glows like a beacon and North Korean villages lie in a sea of darkness.

"Of course it was very hard to understand each other in the beginning," said Kim Young Hyun, Hyundai's top South Korean official at Mount Kumgang. "We had been living under different regimes and different ideologies. But it has gotten easier."

Indeed, daily contact between South and North Koreans on the ground has relaxed. When it first opened in 1998, the resort employed mostly Chinese and Philippine staff, but now more than 450 North Koreans work as mountain guides, waitresses and vendors, identifiable by the bright red pin of Kim Il Sung that each wears affixed over the heart. Able spokespeople, they preach the goal of unifying the peninsula.

"We have 5,000 years of history together," said 35-year-old guide and former soldier Kim Sung Kun. "We've been divided only for the last 50 years. And the main cause of that division is the United States."

But privately, they veer from the script. Young North Korean staffers recently grilled female foreign visitors about dating habits in the United States. Others discreetly ask their South Korean colleagues to bring them cosmetics from Seoul.

That warming is what Hyundai founder Chung Ju Yung envisioned in 1989 when he made his first visit to Pyongyang and sketched out a basic deal. It took nearly a decade for the first cruise ship to arrive - the North would not permit an overland route - and another five years before Pyongyang handed control of the area to Hyundai for 50 years and permitted visitors to arrive across the border by bus.

The project has endured controversy. It nearly closed two years ago when turmoil over North Korea's nuclear weapons program pushed business down to 200 visitors a day, costing Hyundai millions in revenue. The battle over relations with the North turned tragic in August 2003, when Hyundai Asan chairman Chung Mong Hun - son of the man who envisioned the project - jumped to his death from his office in Seoul as investigators probed secret payoffs to Pyongyang.

Still, plans move forward. Three months ago, 500 South Koreans took a test-run tour of Kaesong, a historic Northern city just 42 miles from Seoul. Unlike the remote mountain area, the city tour slated to start next year would bring busloads of Southerners deep into a functioning North Korean residential area. The city also has a 25-square-mile industrial park, where Southern firms employ about 8,000 North Koreans - the project that some analysts predict will be the most difficult for Pyongyang to tolerate.

"Tourists come and go, but there it will be the same people working side by side, month after month," said professor Andrei Lankov, a North Korea expert at Kookmin University in Seoul. "You can't control them that well, and there will be a great deal of interaction. Even the looks of a South Korean truck is very good anti-North Korean propaganda."


Updated : 2021-08-03 15:17 GMT+08:00