|
reprinted from:
North Korea pins hopes on tourism in latest SAR
By Khang
Hyun-sung in Seoul Cash-strapped North Korea has turned a mountain holiday resort on its east coast into a "special tourism zone" in its latest bid to attract foreign investment. A radio broadcast from Pyongyang's Central News Agency said the country's Supreme People's Assembly had adopted a decree on Saturday that will allow foreigners to invest freely in "Diamond Mountain", or Mount Kumgang. The decree promises free movement of people within the zone while developers will be eligible for tax exemptions and their property will be protected under the law. It comes two months after Pyongyang announced the creation of a similar special administration region in northern Sinuiju. Initial hopes were dashed when China detained its first chief executive, mainland tycoon Yang Bin, last month. The latest push has been welcomed by South Korea's Unification Ministry, which said it would stimulate inter-Korean projects and exchanges in Seoul. It appears to be the latest in a series of limited economic reforms introduced by the North Korean leadership in the past few months. Other measures have included the adoption of free market forces, financial incentives for workers and the introduction of currency into the economy, as a replacement for a rations system. The development of the Kumgang mountain resort has been one of the most high -profile of North Korea's attempts to embrace economic reform and has become a symbol of improved relations between the two Koreas. South Korea's biggest conglomerate, the Hyundai Group, started running regular cruises to the area in 1998. But the project has been a big drain on the company's resources and it is believed Hyundai has only attracted half the number of visitors it needs to break even. Some half a million South Koreans have visited Mount Kumgang. It is effectively sealed off from the rest of the reclusive nation and visitors get very little sense of ordinary life in North Korea. The wider reforms have been cautiously welcomed by North Korean analysts, although Bradley Babson, a consultant to the World Bank, has expressed doubts about how far-reaching the changes are. "No one is questioning the sincerity of the government's initiative," he said. "However, the reforms are not sufficient to assure a turnaround in North Korea's economic crisis and even add new risks, particularly the risk of inflation." Marcus Noland of the Institute for International Economics said the reform package threatened the very credibility of the North Korean leadership, raising new economic pressures. While the economic potential may be great,
failure could mean the end of the regime, he said. |
