(3rd LD) N. Korea invites foreign investment in cruise program to Mt. Kumgang

All News 14:08 March 23, 2017

(ATTN: CORRECTS time element in para 15; ADDS more info at bottom)

SEOUL, March 23 (Yonhap) -- Cash-strapped North Korea is inviting foreign investment in a cruise program linking its eastern mountain resort area to the Russian Far East and Southeast Asia, a North Korean website showed Thursday.

Its website promoting Mt. Kumgang recently posted an investment guideline for a ferry business based in the port of Kosong near the mountain. A South Korean company had exclusively run a tour program to the North Korean mountain resort area for 10 years before it was halted in July 2008 after a North Korean soldier killed a South Korean tourist there.

The guideline said a foreign company or a consortium would be entitled to operate a tourist ship with an investment of US$10-20 million over the next 10 years.

The program will run on two routes -- one linking the mountain resort to the Russian city of Vladivostok and the other to Southeast Asia. It also promises special permission to run a casino on the ship.

"The passenger ship will be equipped with various amenities to allow cultural and safe travel for about 1,000 travelers," the guideline said. "There is a plan to allow a casino business there."

The post said North Korea seeks to broaden and diversify international tourism connected to the mountain.

"The tour ship will be guaranteed favorable conditions for economic activities in line with the law on Mt. Kumgang, a special international tourism zone," said the guideline.

Lim Eul-chul, a professor at the Institute for Far East Studies at Kyungnam University in South Korea, said North Korea's permission for a casino business is a very unconventional proposal. It seems to be aimed at securing foreign currency at a time when United Nations sanctions are squeezing the country's dollar earnings, he said.

In a separate post, the North Korean website also invites foreign investment of $500,000 in a joint project to develop a tourist resort around Lake Samilpo in return for rights to run the business over a period of 15 years.

It is unclear, however, if North Korea could find foreign investors for the investment proposals amid tightening international sanctions over the country's nuclear tests and repeated ballistic missile launches since last year.

South Korea's unification ministry said North Korea's promotion of the cruise program appears aimed at preventing the international community from paying attention to its nuclear and missile programs.

"North Korea seems to be aimed at showing that it is not an reclusive country and diverting global attention from its nuclear and missile arsenal," said a ministry official, asking not to be named.

He added that the North will likely have difficulty in attracting foreign investment due to uncertainty stemming from geopolitical tensions.

The latest move is part of North Korea's efforts to develop the international tourism zone spanning from the eastern port city of Wonsan to Mt. Kumgang in a bid to earn hard currency.

In September 2016, North Korea unveiled a proposal to lure foreign investment to develop central areas of Wonsan into a trade and finance mecca, a project worth $196 million.

The inter-Korean tour program at Mt. Kumgang kicked off in 1998 as a symbol of inter-Korean reconciliation and attracted some 2 million South Korean visitors until it was put on hold due to the fatal shooting incident.