- The Washington Times - Thursday, February 19, 2004

DIAMOND MOUNTAIN, North Korea — As the South Korean tour bus rattles across the demilitarized zone into the world’s most isolated country, the guide recites the rules.

“Don’t point your finger at the portraits of Kim Jong-il and Kim Il-sung,” says Park Chae-eun. Better not to use the names of North Korea’s leader or his late father, she adds, but if it’s unavoidable, “always use honorifics. For example, it should be General Kim Jong-il or President Kim Il-sung.”

A visit to the Diamond Mountain resort is a journey through minefields in more ways than one: real ones in the DMZ, linguistic ones for the unsuspecting visitor and commercial ones for Hyundai, the deeply wounded conglomerate that runs the tours.

Hyundai’s experience serves as a cautionary tale for anyone aspiring to be a player in the opening up of communist North Korea and its first steps toward free-market reform.

Not only are the tours a money loser, but Hyundai’s attempts to blaze a trail into North Korea have brought charges of financial misdeeds that led to the suicide of its former chief, jail sentences for some government and bank executives, and the breakup of South Korea’s biggest conglomerate — maker of everything from cargo ships to family sedans — into three separate entities.

Since 1998, Hyundai has attracted 596,000 visitors to the enclave it carved out of the mountain’s foothills just beyond the Koreas’ east-coast border. But each busload means more red ink for Hyundai, to the tune of $1.7 million a month. As tension simmers over North Korea’s atomic weapons program, the project continues to founder.

“Last year was the most difficult time for us. The heavy burden of the nuclear issue weighed on us,” said Kim Yoon-kyu, head of Hyundai-Asan, the conglomerate’s North Korean operation.

“But we must go on,” he said. “We deserve praise for shifting history.”

The visitors travel on a dirt road built across the no man’s land, which has divided the two Koreas for half a century, into an 8,200-acre enclave sealed off from the rest of North Korea by barbed wire and armed guards. Signs warn of high-voltage electricity and mines along the fence near the border. Red-and-white slogans exhort people to become “rifles and bombs” to defend “Great General Kim Jong Il.”

Inside the heated bus are South Koreans listening to pop music. Outside are drab huts without lights or heating in the dead of winter.

Once tourists disembark, they climb valleys, bask in a hot spring, watch a North Korean acrobatic show and shop at duty-free Hyundai stores packed with Western liquor and North Korean brand Red Star and Paradise cigarettes.

The company has spent $145 million to build a shopping mall and pier facility for cruise ships and to buy a floating hotel that was used to lodge American GIs during the Vietnam War.

The idea is to acquaint South Koreans with the northerners they have never known except as mortal enemies in the 50 years since the peninsula was divided into a U.S.-supported dictatorship that would become a thriving democracy, and a Soviet-supported dictatorship that devolved into an impoverished father-and-son fiefdom.


The Kim personality cult is evident in Nine Dragons Valley, where tombstonelike monuments honor father, son and mother. Minders with brooms care for each monument, fending off snow and leaves.

One monument commemorates the place where “Indispensable Communist Revolutionary Fighter Kim Jong-suk” had to turn back and prepare lunch for her husband, founding father Kim.

“Mother Lady Kim Jong-suk never had another chance to visit the valley, and Father President Kim Il-sung felt sorry,” says the tourists’ communist chaperone, who wears broad-rimmed sunglasses like Kim Jong-il’s and refuses to give his name.

When a South Korean visitor marvels at such remarkable marital love, he replies, “We call it comradeship.”

Kim Jong-il, who succeeded his father after his death in 1994, sees Diamond Mountain as a source of hard currency for his government, which gets $50 of every $300 trip Hyundai sells. So far, Mr. Kim has collected $480 million from Hyundai’s tourism venture.

But the place is hardly tourist-friendly. One trip was suspended for two hours because a minder inspected the shiny pebbles neatly arranged at the foot of a Kim monument and found one missing, said Hwang Mi-jung, a South Korean tour guide. In 1999, North Korea held a South Korean tourist for six days, accusing her of “preaching defection” to a North Korean minder.

Walls, murals, towers and even granite cliffs are encrusted with grandiloquent red-and-white slogans swearing loyalty to both father and son Kims.

They reflect the country’s dire economic predicament as well as the strict obedience demanded of a destitute populace.

“Although the going gets tough, let’s keep our smile,” says one slogan on a gray wall.

“Let’s run double-time,” says a banner overlooking a street empty of cars.

Hur Bok-nam, a communist minder, refers to President Bush as a “gangster” and tells visitors that North Korea must strengthen its military because “we have seen what happened to Iraq.”

Another minder, Hong Young-il, says North Korea will “shake hands with anyone who does not try to kill us.”

“But we would never bow first before the Americans. Once you start bowing, you have to keep groveling. We would rather die,” he said.

Though aware of South Korea’s economic prosperity, they rationalize it by noting the South is “occupied” by 37,000 U.S. military personnel.

Reflecting a new mood of reconciliation, however, are many new signs welcoming South Korean tourists “with a compatriotic heart” and crying for reunification.

“Let’s end the tragic division of the fatherland as soon as possible,” one sign says.

But the reception also can be daunting. North Korean soldiers are everywhere, stonily unresponsive to the visitors’ waves. A North Korean major boards a bus and takes offense that the passengers go on chatting to each other. “Be quiet,” he shouts.

Low turnout

The number of tourists is fewer than one-third of what Hyundai had expected. Many South Koreans find it a hassle to apply 10 days in advance while their government vets them before letting them cross the Cold War’s last frontier.

Hyundai also is being squeezed at home, a victim of the dashed hopes that followed the detente of 2000, when Mr. Kim and his South Korean counterpart, Kim Dae-jung, held a historic summit.

The corporation’s forays into North Korea date to 1989, and have resulted in multibillion-dollar deals to build roads, rail links, airports, power stations and dams, plus an industrial park where foreign investors can capitalize on cheap labor the same way China began its industrial transformation. In October, it completed a 12,500-seat gymnasium in Pyongyang named after Chung Ju-yung, who founded Hyundai.

But few of the bigger projects have come to fruition, and last year — worried about North Korea going nuclear — the South Korean parliament cut subsidies for Hyundai tours and initiated a probe into the legality of its cash flow to the North.

An independent counsel concluded that Hyundai raised and sent $500 million illegally to Pyongyang shortly before the summit. Hyundai says $100 million was government “aid” to help persuade Pyongyang to host the meeting, and the remainder was paid to win business rights.

Several Hyundai officials were investigated. In August, Hyundai Chairman Chung Mong-hun killed himself by leaping from his 12th-floor office window.

Mr. Kim, the Hyundai-Asan executive, who received a suspended sentence, says the Diamond Mountain project will pay off when the nuclear standoff is resolved and North Korea opens for a “gold rush” of outside investors seeking cheap labor and untapped markets.

“We have waited 50 years to come this far. We can wait some more,” he said. “The question is whether our company can go on until things improve.”

Optimists put their faith in younger South Koreans, who have grown up without memories of the war that shattered and divided their country. This new generation increasingly sees North Korea not as a menace but as a destitute cousin in need of therapy before it can open up.

On a visit to Diamond Mountain, student tourists squeezed around Mr. Kim the Hyundai executive for photos and belted out “Our Wish Is Reunification,” a song popular in both Koreas.

“The human heart is like a door,” said Miss Park, the South Korean tour guide. “It may open if we keep pounding on it. So I say, ‘Keep smiling at them and keep waving.’ ”

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