Why would North Korea scrap the tour project?

Last Thursday North Korea unilaterally announced it would freeze South Korea-owned assets at its Mount Geumgang resort and kick out their administrative staff. The North also said it would deprive South Korean firms of the right to

do business at the resort and team up with a new tour operator, reportedly a Chinese company.

North Korea also threatened to reevaluate the operation of the industrial park in Gaeseong, another inter-Korean cooperation project, if relations between the two sides do not improve.

The North’s unilateral action is not only a breach of contract and an unlawful infringement upon private assets but a brazen attempt to transfer the blame for the two-year-long suspension of the Mount Geumgang tour program to the South.

How should we interpret this reckless move? What does the North really want? Does it seek a resumption of the tour program to earn badly needed hard currency? If it works with aChinese tour operator, can it attract tourists other than South Koreans to the mountain resort?

In my view, the North’s move suggests it has decided to terminate the tour project, a symbol of reconciliation between the two Koreas. North Korea probably had drafted a scenario when it issued a warning to the South last month regarding the project.

On March 18, the North warned the South’s Unification Ministry and Hyundai Asan, the tour operator, that it would take “extraordinary measures” if the South failed to resume the tour program by the end of March.

Then it summoned South Korean company officials to the resort late March for a real estate survey, threatening to freeze their assets if they did not show up. It reiterated the threat during the survey, and the final announcement came one week after the survey was finished. When the North threatened to freeze the South Korean assets, did it really expect the South to submit to its threat and resume the tour program? We think not.

The tour program was halted in 2008 after a South Korean tourist was shot dead by a North Korean coast guard. The Seoul government rightly demanded that the North cooperate in the on-site investigation, guarantee the safety of tourists and apologize for the shooting.

But the North refused to conduct a joint investigation and offered no apology. It simply said its top leader, Kim Jong-il, had promised to ensure the safety of South Korean tourists at the resort. But the South wanted a written document rather than a verbal promise.

The South has been far from enthusiastic about resuming the tour program. Seoul officials regarded it as a channel of transferring hard currency to the dollar-strapped North Korean leadership.

The North was probably well-aware that the South would not restart the program unless its three demands were satisfied. It was probably also well aware that a tie-up with a Chinese tour operator would not bring many tourists to Mount Geumgang. The tour project has lost much of its value as a means of earning foreign exchange. Hence its decision to scrap the

partnership with the South. But why now?

The North Korean scenario appears to be geared toward building up tension in inter-Korean relations. Its threat to reassess the Gaeseong industrial park project reinforces this view. The Gaeseong complex is important for the North, given the 42,000 North Korean women working for companies from the South.

One may wonder why Pyongyang seeks to heighten tension in the Korean Peninsula now. One probable answer is because North Korean leader Kim Jong-il has to transfer power to his successor soon.

As has been widely reported, the North Korean leader has a serious health problem. Following his collapse in August 2008, he has lost confidence in his health. To conceal this, he has frequently participated in public activities. But he must be aware that he does not have much time left. Therefore he probably wants to speed up the succession process.

But one big problem is that his successor, third son Jong-un, is too young to be a leader. He has neither authority nor credentials. Even in a country like North Korea where little room exists for political opposition, a hereditary power transfer to an inexperienced, twentysomething young man is not something that people would willingly support.

Furthermore, the North Korean leadership itself has increasingly become unpopular among people at all levels. Many factors can be cited, including the ever worsening economic conditions. The disastrous currency revaluation undertaken late last year fueled the already widespread discontent by sending food prices sky high.

In a word, the internal environment is not propitious for hereditary power transfer. One way to break through this unfavorable situation is to create a crisis by heightening tension in the Korean Peninsula. The North Korean leader will be able to tighten his weakening grip of society by making people believe that their country is in an emergency. Then he can accomplish the unpopular project of power transfer without facing serious opposition. He can also have people rally behind the new leader and pledge loyalty.

In this context, we can expect further strains in inter-Korean relations. One may think that the North would not be able to close the Gaeseong industrial park as easily as it did for the tourprogram. But we will have to brace for the worst. North Korea is notorious for doing unexpected things.

Tension will dramatically escalate if North Korea is found to have been involved in the recentsinking of the Navy corvette Cheonan. The North has many reasons to attempt to destroy thepatrol ship, not the least being the need to build up tension to facilitate power transfer. But itstill remains to be seen whether the North Korean leader will ultimately be able to accomplish his anachronistic succession plan.

http://www.koreaherald.com/pop/NewsPrint.jsp?newsMLId=20100411000128 16.05.10 13:02
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