[EDITORIAL] Tour Project: Up to the North

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[EDITORIAL] Tour Project: Up to the North

The Mt. Kumgang tourism business, the symbol of North-South reconciliation and cooperation, is at an important crossroad because the tour operator has lost all its owners' equity. Hyundai Asan has lost 340 billion won ($270 million) in the past two years. No longer able to bear the capital crisis, Hyundai tried to negotiate with the North to reduce the amount of money it paid Pyongyang for the business and also asked the government and banks for more financial support. All three have rejected Hyundai's plea, and it is worrisome that Hyundai is considering the worst possible scenario of ending the tourism business altogether, possibly injuring the hard-won inter-Korean reconciliation and cooperation.

To state the conclusion first, in order for the business to continue to benefit the North economically and contribute to the advancement of inter-Korean relations, the only remaining choice is for the North to take a broad view and loosen the shackles on Hyundai. The main reason for the present problem lies in the unbalanced contract that obligates Hyundai to pay $12 million a month for eight years regardless of the profitability of the business. All the more reason why the most reasonable - indeed, the only - measure to resolve this problem lies in basing the money paid to the North on the profitability of the business.

The North insists that "a contract is a contract," and declines to negotiate a fee reduction. But if the company itself collapses, the tourism business will crumble, the North will not be able to collect even the $6 million which Hyundai proposes to pay each month and a symbol of inter-Korean reconciliation and cooperation will inevitably disappear. Nonetheless, the South Korean government should not take over.

The North must be flexible and the business must show some prospects of profitability for banks or other investors to provide capital. Only then can the South Korean government come up with a plan to revive the business - with the people's consent. The North should be aware that as long as this stalemate between the North and Hyundai persists, South Korean banks and the government cannot help the business even if they wanted to. The government should also make every effort to convince the North of these realities so that Mt. Kumgang tourism stays a model of inter-Korean cooperation.
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