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Moon Jae-in is a man of many faults, but his boundless persistence is not one of them.
In his recent new year’s press conference, Moon declared that, in the face of stalled denuclearization talks and international sanctions, South Korea would seek an “independent” breakthrough with the North.
In the days since, Moon’s government had made it clear that Seoul was seeking to reopen talks with Pyongyang on inter-Korean initiatives such as reopening the tourist resort in Mount Kumgang — with or without American support.
As with most recent comments on North Korea issued from the Blue House, Moon’s announcement seems painfully optimistic at best, and delusional at worst.
Few in the international community would share Moon’s optimism that South Korean tourists can return to Mount Kumgang without violating sanctions against the Kim regime — the United States perhaps least of all.
Moreover, North Korea itself has made it clear through a series of increasingly dismissive statements that they have no interest in Moon’s vision for an inter-Korean reconciliation.
Pyongyang’s rejection of the Mount Kumgang project has been particularly emphatic: in October, they announced that all remaining resort facilities — constructed and nominally owned by ROK conglomerate Hyundai — would be demolished imminently, and that South Korea would pay for it.
But aside from these external obstacles, a new Mount Kumgang tourist project faces a more fundamental question: would South Koreans even want to go?
Polling shows majority support for a return to Mount Kumgang, but as the history of the original resort shows, South Koreans may be significantly less excited about actually opening their wallets to go.
While the original resort attracted nearly two-million visitors from the South between 1998 and 2008, its popularity was largely driven by artificially low prices set with sizable government subsidies.
South Koreans initially flocked to the resort in droves to catch a “rare glimpse” of North Korea, but demand died down quickly as the novelty wore off. By 2001, less than 4,000 people a month were visiting, and Asan — the Hyundai subsidiary who operated the tours — was deep in debt and at serious risk of going out of business.
Facing the prospect of losing the crown jewel of the Sunshine Policy to simple supply and demand, the ROK government announced a sweeping program of subsidies, which would cover between 60-100% of the cost to qualifying tourists — including students and low-income families.
Demand recovered, a trip to Mt. Kumgang could now be had for the price of a Korean barbecue dinner and a nice bottle of soju. In particular, the resort became a popular destination for school trips, as a low-cost option that was at least more compelling than the typical cliché’d outing to local historical sites.
Moon’s announcement seems painfully optimistic at best, and delusional at worst
Interest in a new Mount Kumgang resort may be further tempered by the manner in which the original project ended: with the North Korean military gunning down a tourist in cold blood.
In 2008, a fifty-three-year-old South Korean woman named Park Wang-Ja was shot twice and killed by a North Korean guard, allegedly because she had wandered about a mile away from resort grounds.
Not only did Pyongyang refuse to apologize, they proclaimed that Seoul should be the one saying sorry for failing to properly educate its tourists to stay within the security perimeter.
While a conservative government may have been in power at the time, South Korea’s decision to close the resort was less about politics and more about simple public safety: nobody was eager to spend their vacations in a resort surrounded by trigger-happy guards with a license to kill, especially when the North had made it clear that this was a feature, not a bug.
All of this paints a bleak picture for the financial viability of a reopened Mount Kumgang resort. The initial novelty of being able to set foot on North Korean soil has dwindled further as an older generation who remembers life before division continues to die out.
Concerns about safety would further temper demand, particularly in the wake of the traumatic Sewol Ferry Tragedy. At the very least, the steady flow of school trips which propped up Asan’s balance sheet towards the end of the original resort is probably never coming back.
Subsidies or no subsidies, a re-opened Mount Kumgang may quickly be relegated to a curio, sought after only for pilgrimages by nationalist political groups.
The questionable economic viability of the Mount Kumgang project also points to a fundamental issue with Moon’s strategy of using inter-Korean economic cooperation to open North Korea to the world: the sort of cooperation North Korea is interested in is generally unattractive to South Korean investors absent robust government support.
History has shown that the mystique of North Korea alone cannot fuel sufficient demand, and doing business with the Kim regime carries massive risks. Every inter-Korean economic project to date has ended with its corporate investors having all of their assets summarily confiscated by Pyongyang the moment the political situation soured.
It’s hard to imagine substantial interest in any future projects absent assurances that a liberal government in Seoul will consider them “too big to fail” in perpetuity.
But this may be a fair assumption: as recently as 2018, the Moon Administration authorized a $100 million bailout package for companies affected by the shutdown of Mount Kumgang and reduction in inter-Korean trade due to international sanctions.
The question is whether such bailouts are desirable for South Korea. In an era where increasing economic inequality as depicted in Bong Joon-ho’s ‘Parasite’ looms large in the minds of South Koreans, should Seoul be spending taxpayer money to ensure that the corporations who are given an opportunity to exploit North Korea are able to do so profitably?
From the beginning of his presidency, Moon has seen North Korea as an inextricable part of his legacy. Given this, it’s understandable that he wants to push for a signature inter-Korean achievement — especially in a general election year.
But setting aside the rose-tinted glasses of ideology and cast in the cold, harsh light of dollars and cents, Moon would be wise to question whether Mount Kumgang tourism is really the unambiguous political win that he seeks.
When South Koreans start looking at the balance sheets, Moon may quickly find himself in the unenviable position of a liberal president accused of handing out corporate welfare.
Edited by James Fretwell and Oliver Hotham