[EDITORIALS]Economic logic on Geumgang

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[EDITORIALS]Economic logic on Geumgang

The two Koreas on Wednesday and Thursday discussed measures to revive the sagging Mount Geumgang tour program, but failed to reach an agreement. The two sides agreed to open overland trips to the scenic mountain resort after a road passage through the Demilitarized Zone on the east coast is completed in November. The North also agreed to designate the resort as a special tourist zone. And yet, the talks broke off because the North introduced politics into the tour business, which should follow economic principles. Pyeong-yang's political approach is inappropriate.

The North demanded that the South Korean government guarantee the balance of $560 million out of the sum that Hyundai Asan pledged to pay the North. Pyeongyang also demanded that Seoul guarantee profitability of the deal that was privately negotiated by Hyundai and the North's Asia-Pacific Peace Committee. The demands, asking Seoul to stand behind a private business, are typical political requests.

No matter how serious the North's hardships are, and no matter how important the inter-Korean economic cooperation deal is to the South, such demands are impossible for Seoul to accept. When the state-run Korea National Tourism Organization entered the Mount Geumgang tour business last year, the South Korean public harshly accused Seoul of ignoring economic principles. The North must have been aware of this criticism. Government guarantees might be impossible even in the North, under its new economic reform measures.

Instead of exhausting debates, the North should create an environment that will actually promote the tourism business. Pyeongyang should come up with new tour programs and services as soon as possible. It is most urgent to revise the current program so that the North will earn more money when more tourists visit the resort. That will resolve Hyundai Asan's payment delay, and will also induce South Korean tourists to spend more foreign currency in the North. Pyeongyang will assure itself a stable source of income only when it employs reasonable and economically convincing measures to boost the tour program.
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