North Korea’s Kim Jong-un orders removal of symbolic resort facilities

Mountain resort symbolized North/South co-operation . . .

North Korea’s state news agency reported today that leader Kim Jong-un visited the Mount Kumgang resort, developed jointly with South Korea in 1999 in a bid to normalize North-South relations, where he ordered the removal of “all the unpleasant-looking facilities” built by the South. Kim did signal his interest in discussing the matter with the South prior to moving forward, adding South Koreans are “always welcome” to Mount Kumgang. But his comments on the symbolic facilities point to a sharp departure from his pro-engagement rhetoric of 2018.

Why does Mount Kumgang matter?

Tourism in Mount Kumgang has been a symbol of North-South engagement since its inception. South Korea’s Hyundai Asan Group invested US$653 million in the development of the resort complex and in doing so was granted a 50-year lease by the North. The resort attracted some two million visitors and much needed cash for Pyongyang during its first decade of operations. The tourism program, however, came to an abrupt halt in 2008 when a North Korean soldier fatally shot a South Korean tourist who wandered into a prohibited area. When Kim and South Korea’s President Moon Jae-in met last September, they agreed to resume the tourism program. However, Pyongyang’s continued missile tests and lack of progress on the denuclearization process have delayed the continuation of the program.

A message to Seoul and Washington . . .

Current sanctions on North Korea do not apply to tourism, making the sector economically important for Pyongyang. Kim’s comments suggest frustration with the lack of progress on the lucrative business opportunity, and indicate his intent to establish a more “self-reliant” economic policy. Kim undermined the resort’s symbolic significance by explicitly denying joint ownership of the complex, saying it is the North’s, “won at the cost of blood.” This is bad news for the increasingly beleaguered Moon administration in South Korea, which has banked its political capital on the improvement of relations with the North. Further, analysts have taken Kim’s focus on self-reliance as a signal to the U.S. that it will hold its ground in the currently deadlocked denuclearization discussions.