[Editorial] Kumkang Mountain Tourism Development Goes Bankrupt after Three Years

The Kumkang Mountain Tourism Development, which has stood as the representative symbol of the Sunshine Policy, has fallen into insolvency after a mere three years. The amount of money that Hyundai, the main group in charge of the enterprise, invested in the development project up to September is approximately 910 billion won. They calculate that they lost 600 billion won in losses – both unfortunate and incomprehensible. It is our opinion that even at this late point in time, we must reexamine the Kumkang Mountain Tourism project from beginning to end and decide whether or not we should continue with the project.

When Hyundai first launched the project, they proposed a fantastical blueprint for turning a part of the Kumkang Mountains into a resort complex that would become a representative jewel in North East Asia, drawing over 50,000 tourists every year. But the reality was far from fantasy. Hyundai exhausted 450 billion won in the early stages of the project and only some 40,000 tourists have visited the site in the past three years.

The principal reason why the situation has come to this point has to do with the unreasonable cost that Hyundai agreed to for the tourism project and development plan. Hyundai should have taken the economic viability into consideration from a long-term perspective, even if that meant that they could not approach the project from a strictly profit-making point of view. Moreover, when the project ran into problems, Hyundai would give optimistic predictions that lacked sufficient basis and failed to address the root causes of the problems.

The government administration is also partly responsible for this situation. The administration has repeatedly insisted on the separation of politics and economics, but to leave the enterprise to its own devices until it reaches the point of collapsing is not the attitude that the administration should take. The Kumkang Mountain Tourism project is a massive-scale plan and it also symbolizes the cooperative relations between the South and the North. The administration can use this to its advantage by discreetly working with Hyundai and using the project as a means for improving future relations with the North.

Yet, when we look at how things have progressed, the North – the sole beneficiary of the project – has been using it to its own advantage. The North`s recent insistence on holding the meeting for the promotion of economic cooperation at Kumkang Mountain and the division over the sixth minister meeting is an example of this. Although the status of the project now hinges on building roads for ground tours and designating the area as a special tourist region, the recent actions of the North does not bode well for its future.

In conclusion, we feel that the project cannot continue in the way that it has been carried out so far. The initial intent to make this project the cornerstone of South-North reconciliation and cooperation has faded and the project has only brought about unreasonable requests from the North. The time has come to decide whether the project is worth pursuing further. If Hyundai does not have the capacity to carry out the project, it must step down. The administration also must not meddle in the project any longer.