Debt-ridden Kumgang tour program

It was not unexpected that the Mt. Kumgang tour project would run into trouble. The total number of tourists visiting the North Korean mountain has so far averaged less than 200,000 per year, whereas Hyundai Asan Corporation had estimated that the number would reach 720,000. What`s more, the corporation mapped out programs such as on-ship casinos and duty-free shops that are not feasible under the present circumstances. This unwarranted projection spawned the present crisis. However, the worst mistake Hyundai made was to sign a contract with North Korea on the amount of fees it expected to derive from the Mt. Kumgang tours. The promised tourist fee of $100 per person was a gross miscalculation. There is no precedent in the world for tourists to pay as much as $100 to enter a tourist spot, however impressive the sights or facilities. For example, in the cases of the Grand Canyon and Yellowstone Park in the United States, the fee for entry is around $30.

It is unknown how Hyundai came up with the idea of promising the North as much as $120 million or about 15 billion won per month in entrance fees. If such a projection was worked out by the Hyundai Asan Corporation, the company appears to be unqualified to run such a project. If the government compelled the Hyundai firm to conclude the tourism contract with the North in return for the provision of government incentives of some kind, then Hyundai Asan was haplessly exploited.

At the same time, it would be wrong for Hyundai Asan Corporation to refuse to make the promised payments to North Korea. It also would be a miscalculation for Pyongyang to attempt to pressure the Seoul government to provide financial assistance to Hyundai. If the government provides aid for the tourism project, for which even domestic banks have declined to supply loans, the public would be outraged. In a market economy, unprofitable enterprises must be shut down. In his recent ``Dialogue with the People`` on national TV, President Kim Dae-Jung stressed that private-level business with the North should be encouraged only when it is profitable. Unless present conditions improve, the Kumgang tourism project has little hope of succeeding in the long term. Already, most of the people here who came from the North have visited the mountain and the mystery surrounding this forbidden land is waning. Moreover, complaints are rising over the strict controls on sightseers and monotonous travel schedules.

Nevertheless, in view of the symbolic importance of this inter-Korean project, the suspension of the tourism program is undesirable. As it is primarily responsible for this project, Hyundai should work together with the Seoul government and North Korean authorities to work out measures to normalize it. In the course of their negotiations, the issue of the high cost to tourists should be addressed as the top priority. Only if they fail to reach an accord should the tourism program be wholly reviewed.