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Does Pyongyang want foreign investment while detaining foreign tourists?

Does Pyongyang want foreign investment while detaining foreign tourists?

Posted September. 23, 2014 01:27,   

한국어

North Korea held a road show for the members of the World Federation of Overseas Korean Traders Associations (World-OKTA) in Dalian, China, last weekend. “We didn’t confiscate Hyundai’s assets (in Mt. Kumgang),” an official of Wonsan District Development Corporation under North Korea’s External Economic Affairs Ministry said. “We’re trying to hold hands with investors from many other countries and don’t exclude South Korea and the door is open.”

Wonsan District Development Corporation is responsible for attracting foreign investments for the development of the Wonsan-Mt. Kumgang international tourist area, initiated by North Korean leader Kim Jong Un. This implies that his intention is behind the recent proposal for investments in North Korea. North Korean Foreign Minister Lee Soo Yong, the leader’s confidant and former head of the Joint Venture Committee, had visited the Middle East, Africa, Europe and Iran since May to attract foreign investors.

It is a step in the right direction for Pyongyang to revive the economy by attracting foreign investors after Kim Jong Un took power but a fundamental change is necessary for success. When a tourism program stopped after a South Korean tourist was shot to death in 2008, it confiscated and froze South Korea’s assets in April 2010. North Korea cannot resume the Mt. Kumgang tourism program or the inter-Korean economic exchange with a low-ranking official’s words, “We didn’t confiscate Hyundai’s assets (in Mt. Kumgang).” If Pyongyang claims that it hasn`t confiscated the assets, it should first allow the South Korean government, Korea Tourism Organization, and Hyundai Asan to exercise their property rights over their real estate and facilities.

While North Korea began to talk about attracting foreign investors in the late 1990s, it blocked the inflow of capital in fact. It has aggravated its economic isolation by conducting three nuclear tests and launching long-range missiles, which caused the sanctions from the United Nations. One of the most effective ways to attract investments is to abandon its nuclear weapons and get out of international sanctions. Even now, Pyongyang detains three Americans and two of them are tourists. Few entrepreneurs will invest a large amount of money in the country where tourists’ safety is not guaranteed.

The South Korean government has repeatedly said that it could discuss resuming the tourism program in Mt. Kumgang and lifting its May 24 sanctions against North Korea if the inter-Korean high-level meeting is resumed. There are few reasons to reject an inter-Korean dialogue, if Pyongyang intends to develop its economy by attracting South Korea’s investments. What investor would be more interested in North Korea than South Korea?