B00BY4HXME EBOK (27 page)

Chung Ju-yung’s proposal envisioned an establishment of a South Korean resort in North Korea. The resort was to be located in the K
ǔ
mgang (“Diamond”) Mountains, which for centuries have been seen in Korean culture as the embodiment of scenic beauty. The mountains conveniently lay near the DMZ.

In November 1998 the K
ǔ
mgang project commenced operations. As with the majority of North-South “cooperation” projects, the South did most of
the work while the North received the lion’s share of the project’s benefits. For the South Korean side, the project could hardly be called a success story. In January 1999 Hyundai predicted that by the end of 2004, there would have been a cumulative 4.9 million visits to the North. The actual figure was merely 0.9 million. Hyundai Asan also said in 1999 that by 2004 some 1.2 million South Korean tourists would visit the project annually. Yet the actual number of visits in 2004 was 274,000—four times below the initial expectations. In 2007 the number of visitors peaked at 350,000—an impressive figure, but still well below the rosy expectations of the late 1990s.
¹⁷
Between 2001 and 2002 the project nearly went bankrupt and only a massive infusion of the South Korean government funds saved it from capsizing.

The South Koreans did not rush to the new resort. This lack of enthusiasm was easy to explain, since the trips were not cheap: a tour to K
ǔ
mgang would cost almost as much as cheaper tours to China or Southeast Asia. At the same time, the allure of North Korea, once clearly a “forbidden fruit,” was diminishing in the South.

Once in the resort, South Korean visitors were not allowed to venture outside the fenced area. The local population was removed from this area completely, and only a few hundred North Korean minders and plain-clothes “guides” were present there. Most of the semiskilled personnel at the project were ethnic Koreans recruited from China—they were willing to work for low wages, and they were politically safe for the North Korean authorities (like the tourists themselves, Chinese-Korean personnel were not allowed to leave the resort).

Nonetheless, some “ideological damage” is possible even in such circumstances. One of my North Korean interlocutors was sent to work at the resort construction during a labor mobilization in the early 2000s. During his stay, he had no contact with South Korean tourists whatsoever, and did not see them even from afar, but later, after his defection to the South, he mentioned this trip as a turning point in his ideas about the South. He could see some South Korean equipment, and also some buildings erected by the Southerners, and it was enough. He said: “I knew that the South was ahead of the North, but only after my trip to K
ǔ
mgang tourist zone I realized how much ahead they actually are.”

Much in line with the K
ǔ
mgang tourist zone was the decision to start tours to the ancient city of Kaes
ŏ
ng, which is located near the DMZ and has great historic significance for all Koreans. Compared to the K
ǔ
mgang tourist zone, Kaes
ŏ
ng city tours meant a greater level of exposure. Every day, the inhabitants of Kaes
ŏ
ng could see dozens of large, shiny South Korean buses, which crisscrossed a small historical downtown. Each bus, apart from a driver, had two or three minders, whose job was to make sure that visitors would not take shots of the everyday life of the city. Pictures could be taken only at designated stops. Upon departure, all digital cameras (only digital cameras were allowed on tours) had to be checked frame by frame, and those visitors who dared to take politically incorrect pictures—of, say, an ox-cart on a city street—would have to pay a fine.

Nevertheless, the North Korean authorities obviously did not have enough money to ensure sufficient segregation of the South Korean tourists. The police did not allow North Koreans to get within a few dozen yards of tourists, but even from such a distance Northerners could see that Southerners were well dressed and unusually tall by Northerner standards.

Interaction with minders was also allowed and even frequently initiated by the minders themselves. Obviously, these young police and intelligence officers were supposed to do their job—that is, gain intelligence. Nonetheless, there is no doubt that in the process they also discovered many interesting things about actual life in the South. One might argue that the secret police personnel would know the truth anyway, but this is hardly the case: normally such people would be far too low in the pecking order of the North Korean bureaucracy to be allowed that much access to subversive knowledge about the “other Korea.”

Of all the “three projects,” the Kaes
ŏ
ng industrial zone (KIZ) is by far the most significant both economically and politically. The idea of the KIZ is based on the increasingly common assumption that the interests of both Koreas can be served by a combination of Southern capital and technologies with Northern cheap labor. So, it was decided to develop an industrial park in the vicinity of the DMZ. In this industrial park South Korean companies would employ North Korean workers who, laboring under the
supervision of South Korean managers, would produce cheap items for sale in South Korea and overseas.

The KIZ construction began in 2003, and by late 2004 the first production lines began to operate in the complex. Big business did not show much interest in the idea, so only small- and medium-sized South Korean companies chose to move into the KIZ. For them, the South Korean government provided generous inducements, which included, among other things, cheap loans and guarantees. The guarantees were especially important, since even in the early days of the Roh administration, when the North-South relations went through a short honeymoon, South Korean businessmen were afraid that overinvesting in the KIZ would one day make them hostages to the policies of both Seoul and Pyongyang.

Contrary to earlier worries, the KIZ was remarkably successful. Admittedly, as was the case with the K
ǔ
mgang tours, the initial estimates were proven to be overoptimistic: in 2003 it was promised that as early as 2007 some 100,000 North Korean workers would be employed by some 250–300 South Korean companies in the area. The actual results were less impressive: by late 2010, some 120 South Korean companies operated at the KIZ, with 47,000 North Korean workers employed. Over half of the companies (71, to be exact) dealt with clothing and textiles. In 2010 the KIZ-based companies produced goods worth $323.3 million (again, slightly over half consisted of textiles and clothing). For the mammoth South Korean economy, this is small change, but for the North this income is significant enough.
¹⁸

The KIZ is located some 10 kilometers away from the DMZ, so the South Korean personnel commute daily, but some of them stay there overnight (thus creating an ever-present possibility of a hostage situation in case of a crisis). As of 2010 there were about 800–900 South Korean technicians and managers who supervise the North Korean workers.

Theoretically, the South Korean companies pay their North Korean workers the agreed basic monthly wages of $61 (as of 2010), but this figure does not include overtime premiums and special incentives, so the actual monthly payment seems to be close to $90–100 per worker. However, this salary is paid to a North Korean government agency that makes a number
of deductions, so only a fraction of the total—less than 35 percent—reaches the workers’ pockets. Indeed, the KIZ is a major cash cow for the North Korean state, providing an estimated annual revenue of $25–40 million. This allowed the numerous critics of the project to describe it as a “slave labor camp.” The description is grossly unfair: even after the deductions, the KIZ jobs are by far the best-paid regular jobs in North Korea, so the locals strive hard to be accepted to a KIZ-based factory.

Any interaction between North Korean workers and South Korean managers is discouraged. In one incident, a South Korean manager was kept under arrest for a few months, allegedly for criticizing North Korea and encouraging a female North Korean worker to defect.

Nonetheless, one should not underestimate the impact that the KIZ has on the city of Kaes
ŏ
ng and the surrounding area. By now a significant part of the local population are employed in the KIZ. It looks like the average South Korean industrial district and, as such, would probably be described as monotonous and faceless by visiting aesthetes from other parts of the world. But for the North Koreans themselves, the area looks stunningly unusual and beautiful. The streets are lined with trees, roads are paved, and bright electric lights are on every night. Standard prefabricated buildings are clean and brightly colored. This is not what the average North Korean has seen in the typical industrial district in his country. As a matter of fact, first-time visiting North Korean officials cannot hide their surprise—even though such improper emotions might be politically dangerous.

North Korean workers in the KIZ need not talk to South Koreans to get an idea of what life in South Korea looks like. The South Koreans are tall, well dressed, and their skin testifies to the fact that they don’t spend much time on labor mobilization, neither planting rice with bare hands nor pushing cement blocks around. Even small talk might not be that innocent, since hints about daily life in the South—both intentional and incidental—are bound to be dropped and North Koreans will certainly take notice. No amount of police surveillance will prevent this from happening.

Even smuggling from the KIZ has a remarkable impact on minds in surrounding areas. For snacks, many North Koreans are given Choco Pies,
a seriously unhealthy, sugar-rich but delicious snack, popular in the South. It is known that most of them get the Choco Pies from the KIZ to share with their families. These Choco Pies become carriers of highly subversive messages about South Korea’s sophistication and prosperity—like pretty much everything that is taken from the KIZ, legally or otherwise (and theft is a big problem).

The KIZ does fill the regime coffers, no doubt, but it also serves as a conduit for new and uncensored knowledge about the outside world. We can be sure that thanks to the KIZ, an overwhelming majority of some quarter-million people who live in its vicinity have come to understand that most of what they read about South Korea in the official media is completely false. Even minders and political police agents are not immune from the effects of these discoveries.