S. Korea to suspend aid for N. Korea tourism project amid U.S. criticism

The South Korean government has decided to suspend its financial assistance for a troubled tourism project to North Korea's Mount Geumgang, a South Korean official said Thursday, apparently due to U.S. criticism of the inter-Korean economic project.

But the measure was believed to fall far short of what Washington had expected to see from Seoul since it would only lead to a cutback of several million dollars in the nearly US$1 billion project, which critics claim is a "cash cow" for the communist state.

"The government has decided to stop paying subsidies for people taking trips to Mount Geumgang," the official at the Unification Ministry said Thursday, asking not to be named because of the sensitivity of the issue.

The official, however, said the government was unlikely to take further steps to restrict or discourage, at least for now, trips to the North Korean mountain.

"There is really not much the government can do about the project, which is run by a private business," the official said.

Kim Suk-hwan, a spokesman for Prime Minister Han Myeong-sook, later said the government has decided to maintain the inter-Korean tourism project.

The decision came at a policy coordination meeting at the prime minister's residence, which was also attended by Kim Geun-tae, chief of the ruling Uri Party, and presidential chief of staff Lee Byung-wan, according to the spokesman.

Seoul has been paying subsidies to cover part of expenses for students, war veterans and people with physical disabilities traveling to the scenic resort at Mount Geumgang, developed by Hyundai Asan, the North Korea business arm of South Korea's Hyundai Group.

In 2002, the government paid a total of 21.5 billion won (US$22.5 million) in subsidies, but the amount dropped to about 2.9 billion won (around $3 million) in 2004, according to the ministry.

U.S. Assistant Secretary of State Christopher Hill, while traveling here on Tuesday, said the tourism program seems to be "more designed to give money to North Korean authorities."

He denied any intention to put pressure on the Seoul government Wednesday, saying a decision "is really for the Korean government to make."

Government officials here said Foreign Minister Ban Ki-moon would explain Seoul's decision to his U.S. counterpart Condoleezza Rice, who was due here later in the day for talks on ways to implement the United Nations resolution on the North following its nuclear bomb test.

Whether suspension of government subsidies would satisfy the U.S. secretary remained to be seen, as she said Tuesday in Washington that her country "will see what the South Koreans decide to do about their activities in general with North Korea."

The inter-Korean tourism program prompted many questions and speculation after the U.N. Security Council unanimously adopted a resolution over the weekend prohibiting transfer to or from North Korea of any financial resources that can benefit the North's missile and other weapons of mass destruction programs.

The South Korean developer of the resort at Mount Geumgang agreed to pay a total of $942 million to North Korea in exchange for its exclusive rights to the tourism program and other development projects there, including the development of a joint industrial complex in the North's border town of Kaesong, according to the Unification Ministry.

Some $451 million in admission fees have been paid to North Korea since the tourism program began late 1998, according to ministry officials.

An average of about 40,000 South Koreans take trips to the mountain resort each month, paying about $1 million in admission fees, according to ministry officials and Hyundai Asan.

Some have raised the possibility of paying North Korea with goods such as concrete, food or fertilizer instead of money, but many remain doubtful the North would give up its source of cash.

Seoul, Oct. 19 (Yonhap News)