Tag Archive | "tourism"

Final DPRK Travel Ban Regulations Will Cut Humanitarian Help for North

By Robert King

On September 1st, the ban on travel to North Korea for holders of U.S. passports went into effect.  Secretary of State Rex Tillerson announced a month earlier that the ban would be imposed, but the initial statement indicated that there would be exemptions for humanitarian activities and journalists.  Those exemptions, however, are limited and narrow.

The regulations provide four specific groups who will be granted permission to travel to the DPRK: Professional journalists whose reporting will be made available publicly; American citizens who are employed by the International Red Cross or the American Red Cross who are traveling to the North on an official Red Cross mission; individuals whose travel is justified by a “compelling humanitarian interest;” and individuals whose travel is “otherwise in the national interest.”

Not only are the categories tightly limited, but the State Department has not made the application process easy.  The first step in receiving permission to use a U.S. passport to go to North Korea is to request permission with supporting documentation.  The regulations do not indicate how long it will require for a decision, but there is no evidence that such requests will get expedited treatment.  If the request is denied, there is no appeal.  If the request is approved, the individual will then have to apply separately for a special U.S. passport.   To get this special validated passport apparently requires a new passport application with the appropriate fees.  The U.S. passport with the DPRK travel exception will be valid only for a single trip, and any subsequent travel will require a new travel permit application and a new U.S. specially validated passport.

American citizens involved in humanitarian and educational programs in the DPRK left North Korea prior to the effective date of the new travel requirements.  Leaders of Non-Government Organizations (NGOs) have expressed concerns about the impact of the travel ban on their humanitarian and assistance programs.

With the imposition of the travel ban, it is worth considering the factors that led to this decision and its potential consequences.

The initial decision to impose the travel ban was largely the outgrowth of the tragic death of American college student Otto Warmbier after he was detained, tried, spent 17 months imprisoned in the North, and died shortly after being returned to the United States in a state of “unresponsive wakefulness.”   He died in mid-June, and the travel ban was announced six weeks later.  State Department official travel warnings for the DPRK, issued well before Otto Warmbier was detained, bluntly said “Do not travel to North Korea,” but there was no prohibition on travel.

Over the last decade or so, some twenty Americans have been detained by the DPRK, in most cases for reasons that are consistent with North Korean laws, but not with those of democratic societies like the United States.  These detained Americans required considerable effort by American diplomats to seek their release from the North, and in some cases their release required visits to the DPRK by former presidents Clinton and Carter and other senior American officials.

There was frustration in Washington over using U.S. diplomatic resources to seek the release of Americans in North Korea when there were questions about the benefit of the travel in the first place.  Also, there was concern that tourist dollars were being used to fund DPRK military programs and the leader’s lavish lifestyle.

A second element which likely encouraged the decision on the travel ban was the growing American frustration of dealing with the DPRK’s illicit nuclear and missile programs.  Over the past year the ramp-up of missile tests as well as continued nuclear weapon development has led to a growing sense of urgency.  At the same time, the options available to contain the North are limited.  American tourist revenue is a small source of funding for the military, but cutting off the revenue might be helpful.

Americans taking a North Korean tour to participate in the Pyongyang Marathon serves little benefit other than to give adventurous Americans bragging rights.  The DPRK receives significant revenue from such travel.

There are, however, significant but intangible benefits to the United States from the humanitarian efforts of private American citizens, and the travel ban will significantly reduce American NGO efforts.

American NGOs help undermine the DPRK’s oft repeated charge of “American hostility.”  The vicious brutal image North Koreans have of Americans is softened for those North Koreans who deal directly with Americans (though the Koreans are carefully vetted and monitored).   Furthermore, contact with Americans helps get external information to North Koreans otherwise unable to access information about the outside world.  In a country where all information is tightly controlled by the Pyongyang government, even such limited contact with Americans provides information that undermines government information controls.  Such information helps pry open a tightly closed society.

Another non-political benefit is the good that is done by these American NGOs.  North Korea is a poor country whose standard of living has more in common with sub-Saharan Africa than its Asian neighbors. (UN Per capita income figures for 2015 place DPRK at 179 of 195 countries, while South Korea is number 31.  North Korea is below Sierra Leone and Rwanda, but above Uganda in the UN ranking.)  There is no question that the poverty and living standards are the result of regime mismanagement, and its use of scarce resources for military expenditures rather than for the well-being of the people.  Clearly, the regime is responsible.

The North Korean people suffer because of their leaders, but they are not responsible for the totalitarian regime’s policies.  American NGOs provide help dealing with humanitarian issues such as multi-drug resistant tuberculosis—which benefits not only infected North Koreans, but also neighboring populations in China, South Korea and Russia, which could be infected if the disease is not controlled. These humanitarian and aid projects are funded through the generosity of many Americans who contribute to these efforts and other Americans who carry out them out.

It is difficult to see that these stringent restrictions on American NGOs engaged in humanitarian engagement in the North will have benefits that justify ending the benefits they provide.

Robert R. King is a Non-Resident Fellow at the Korea Economic Institute of America. He is former U.S. Special Envoy for North Korea Human Rights.  The views expressed here are his own.

Photo from (stephan)’s photostream on flickr Creative Commons.

 

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As Chinese Tourists Continue to Drop, Korea Turns to the Middle East

By Jenna Gibson

As several KEI analyses have shown, South Korea’s tourism industry  has been one of the main casualties of China’s economic retaliation over deployment of the THAAD missile defense system. New estimates from the Korea Tourism Organization show that China’s retaliation could cost Korea up to 5 million tourists this year, five times as many as when the MERS outbreak significantly dampened tourism in early 2015.

In June 2017, Korea saw a 36 percent drop in tourist entries, due in large part to a 66.4 percent decrease in Chinese visitors compared to June 2016. At that time, Chinese tourists made up 48.8 percent of all entries into Korea – a figure that’s now down to 25.7 percent.

But the numbers also reveal some good news that illuminate an important avenue for future growth in Korea’s tourism industry. While Chinese visitors continued to drop, the number of tourists from the Middle East have jumped significantly, recording a 71 percent increase from June 2016 to June 2017.

And, perhaps more importantly, tourists from the Middle East spend significantly more during their time in Korea than those from other areas, according to a study by the Korea Culture and Tourism Institute. Their recent survey of tourists in Korea showed that Middle Eastern visitors spent an average of $2,593 each during their trip, followed by Chinese tourists at $2,059 each. The average for all visitors to Korea is significantly lower, at $1,625.

In order to cash in on this growing market, the Korean government and the tourism industry are focusing on providing more services for Middle Eastern tourists, including a push to increase the number of halal certified restaurants around the country. Just this month, 117 more restaurants received their halal certification, bringing the total to 252. In addition, many popular tourist attractions have added prayer rooms for their Muslim visitors, including Nami Island, Lotte World, and Coex Mall, as well as Incheon International Airport and Busan’s Gimhae International Airport.

MENA tourism graphic-01

Part of the drive for more tourists from the Middle East choosing to visit Korea is the explosive popularity of Hallyu across the region. Take Iran, for example. There, fascination with Korean culture started back in the mid-2000s, when the historical drama ‘Dae Jang Geum’ was broadcast on state TV and garnered 86 percent ratings nationwide. In a 2017 report of the most popular shows on Netflix around the world, Iran was only one of two non-Asian countries to put a Korean drama (2012’s Love Rain) on the top of their queues.

In June, CJ E&M, Korea’s largest media company, said it will be opening a Turkish unit to increase its presence in Turkey, where locals can’t seem to get enough Korean cultural content. Considering that the filming sites of many popular Korean dramas have become popular tourist destinations, this increase in the popularity of Korean TV shows could lead to overseas fans travelling to Korea to see the spot where their favorite drama couple fell in love.

With the Korean tourism industry continuing to focus on enticing Middle Eastern visitors as well as tourists from all parts of the world, there is certainly an opening to offset some of the losses from the drop in Chinese tourism over the last year or so. But there is still a long way to go – even with the huge increase in visitors, Middle Eastern tourists still only make up around 1 percent of entries into Korea.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Image from yadem.hayseed’s photostream on flickr Creative Commons.

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Scratch North Korea from your Vacation Plans

By Mark Tokola

According to news reports, the State Department will soon publish a new regulation to ban Americans from visiting North Korea for tourism.  State Department spokeswoman Heather Nauert said on July 21, “Once in effect, U.S. passports will be invalid for travel to, through and in North Korea, and individuals will be required to obtain a passport with a special validation in order to travel to or within North Korea.”  It appears the special validation exception is intended to allow the small number of U.S. humanitarian workers to continue their work in North Korea.  There will be a 30-day period after the ban is officially published in the Federal Register before it comes into effect to allow time for Americans in North Korea to depart.

The State Department has made clear that the justification for the ban is “mounting concerns over the serious risk of arrest and long-term detention,” following student Otto Warmbier’s year-long detention in North Korea and his death on June 19.  Three American citizens continue to be held in North Korea.  The State Department has long cautioned against Americans travelling to North Korea because of the U.S. government’s inability to provide protective services in a country in which it has no Embassy or Consulate. But that has not dissuaded several hundred Americans from visiting North Korea every year, usually by means of European travel agencies that offer group tours.

Those who have advocated for a travel ban on North Korea have given reasons other than personal safety.  One is to deprive the North Korean government of the money it makes from tourism.  North Korea charges a great deal for the privilege of visiting their country, and that money goes into government coffers.  Advocates of a travel ban say that tourism revenue directly or indirectly supports both North Korea’s weapons programs and its pervasive system of human rights abuses.  Another reason for a ban would be to prevent North Korea from seizing hostages to gain diplomatic leverage against the U.S.  In the past, North Korea has released American prisoners only in exchange for visits by high-level, current or former U.S. government officials.

Opponents of a travel ban have argued that people-to-people contacts can help change how North Koreans see America.  Even casual contacts with North Koreans, under this theory, will help counter North Korean propaganda that all Americans should be seen as hostile war-mongers.  Some also oppose all U.S. government travel bans on the general principle that American citizens should have the freedom to travel where they choose; travel restrictions are an abridgment of civil liberties.  As a legal matter, the Supreme Court settled this question in the 1965 Zemel v Rusk decision when it upheld the State Department’s power to restrict the use of U.S. passports to travel to Cuba. A final reason to oppose a ban is that it could prove difficult to enforce.  If an American joins a travel group from outside of the United States, to what lengths would the U.S. government go to punish that individual?  How would it even monitor the travels of such individuals?

Beginning in 1968, U.S. passports included a list of countries to which the passport holder could not travel: North Korea, the People’s Republic of China, North Vietnam, and Cuba.  Those restrictions were eventually dropped and there currently are no countries which a U.S. passport holder is prohibited from visiting.  You will ask, “What about Cuba?”  In fact, the current U.S. bar on tourists visiting Cuba is not a State Department ban on using a U.S. passport to visit Cuba; it was a U.S. Treasury Department ban on making any payment to the Cuban government, which had the effect of making travel to Cuba virtually impossible for tourist purposes.  The Obama Administration eased those financial restrictions, but the Trump Administration is restoring some of them.  For more on travel to Cuba, see the Treasury Department’s FAQs from June 16, 2017.

In addition to the State Department’s ban on tourism for the purpose of protecting American citizens from the dangers of travel to North Korea, watch for the U.S. Treasury to impose its own restrictions on American payments to visit North Korea as part of the U.S. sanctions regime, along the lines of the Cuban restrictions.  Although this would seem redundant, it might aid in enforcement of the travel ban once it comes into effect.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo by KEI.

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Is the Hallyu Crisis with China Over?

By Jenna Gibson

Beijing has approved the broadcast of a new Korean drama that had been co-produced by a Korean and a Chinese company, according to a source in the Chinese entertainment industry, making it the first Korean show to get the green light since before the THAAD spat.

This move is good news for Korean entertainment companies, which have been lamenting the Chinese ban which had slowly pushed Korean stars out of the spotlight throughout last year and culminated in direct retaliation against tourist packages and Lotte Department stores. It also bodes well for drama co-productions, which had seen tremendous success in last year’s standout Descendants of the Sun. At the time, before THAAD derailed things, Korean-Chinese collaboration was seen as the new frontier in Hallyu, and key to the continued success of Korean creative content in the Chinese market.

What’s interesting is the impetus for China’s reversal on allowing Hallyu content. Beijing is likely trying to start off on a good foot with newly elected Korean President Moon Jae-In, himself a skeptic of the THAAD system, in an attempt to give Moon some leeway should he decide to review the deployment.

A recent op-ed in the People’s Daily-affiliated Global Times insisted that “It is likely that Moon will stop THAAD’s deployment,” saying, “The huge economic losses South Korea has suffered are a result of the Chinese public’s anger. South Korea, which relies heavily on China economically, needs to weigh its potential gains and losses carefully” and that “Both Beijing and Seoul should take Moon’s presidency as an opportunity to promote warmer bilateral relations.”

But in reality, Moon has little room to maneuver at this point. THAAD is already in place and operating at some capacity, and recent missile launches from North Korea (the second of which was detected by THAAD) have highlighted its necessity in the public eye.

Although there was a dip in approval last November, the Korean public has largely remained favorable toward the THAAD system, according to polling by the Asan Institute in Seoul.  As of March, 50.6 percent of Koreans approved of THAAD, with 37.9 percent opposed. Perhaps because of this, President Moon has softened his position from outright opposition during the early stages of the campaign to stating that he objects to the way the decision was made, not the system itself.

As Asan Vice President Choi Kang pointed out in a KEI podcast after the election, President Moon may be constrained both by domestic politics and public opinion. Moon’s Minjoo Party only has 120 seats out of 300 seats in the National Assembly, and he failed to breach 50 percent of the vote during his election.

“How he can make a coalition or compromise with opposition parties is going to be a very, very critical issue for him to handle in the early phase of his presidency,” Choi said.

This could be particularly difficult when it comes to China, which has seen a steep decline in popularity among the Korean public since they stepped up their economic pressure over THAAD. Beijing’s economic retaliation has included the ban on selling tourist packages to Korea as well as cancelled concerts and a block on Korean entertainment content being uploaded to streaming sites.

According to a new report from the Korea Institute for Industrial Economics and Trade (KIET), “China’s ban on South Korean cultural imports will amount to 5.6 trillion won (US$5.02 billion) and 15.2 trillion won (US$13.6 billion) in direct and indirect damage in the consumer goods distribution sector” if it continues for six months. New numbers from the Korea Tourism Organization show a 66 percent year-on-year drop in Chinese visitors in April, driving much of the estimated losses for industries such as clothing and cosmetics.

“It’s quite difficult for South Korea to improve its relations with China because public understanding of China has deteriorated over several months,” Choi said. “So unless there is a positive sign coming from China on this economic pressure, it is very unlikely for the South Korean government to improve drastically its relations with China.”

Now that China seems to be offering an olive branch, public opinion may begin to shift back in Beijing’s favor. But after months of panicked headlines over China’s latest crackdown, it’s unlikely that one fantasy romance drama will be enough to turn things around entirely.

At this point, Beijing may continue to roll back its content and tourism bans in the hopes of wooing President Moon to their point of view, or as a face-saving measure. Either way, though, Chinese leadership would be ill-advised to hold their breath for a THAAD removal.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Image from LG전자’s photostream on flickr Creative Commons.

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Deepening South Korea’s Relations with the Middle East

This is the sixth in a series of blogs looking at South Korea’s foreign relations in the run up to the next Korean administration taking office on May 10. The series also includes blogs on relations with North Korea, the United StatesChina, Japan, Russia, the European UnionASEANAfrica, and Latin America

By Juho Choi

The active relationship between South Korea and the Middle East Area is relatively young. Since South Korea established its government after the Korean War, most exchanges with Middle East nations had been based on oil and overseas construction. While there is significant geographic distance and cultural differences, the relationship has evolved significantly in recent years.

Korea’s active economic ties with the Middle East go back many years as Korean companies have often looked to the region for construction projects. However, ties have grown closer in the 21st century. As oil prices soared, many oil-supplying nations needed additional oil-related facilities and social infrastructure.

Middle East Blog Table

Out of the top 10 countries where Korea has construction work, 6 are in the Middle East including the top 4 countries. Under the two former presidents (Lee Myung Bak and Park Geun Hye), ties with Middle East nations were significantly expanded. Both presidents toured the Middle East and signed hundreds of memorandum of understanding (MOU) in various fields. In fact, some of them led to contracts such as plant building and operation contracts, including ones in the UAE for a $20 billion deal to build four nuclear power plants and $49.4 billion contract to operate the plants over 60 years.

Lifting sanctions on Iran also helped Korea’s economy advance and brought hundreds of millions of dollars in contracts. Daelim Industrial landed a $2 billion deal with the Esfahan Oil Refining Company and Hyundai Heavy Industries clinched a $700 million deal to build 10 ships for Iran’s state-owned shipping companies. Also, Turkey, which is called a brother nation in Korea, signed a $3 billion contract with SK E&C to construct the world’s longest suspension bridge.

In addition to economic ties, cultural exchanges have dramatically increased. According to Korea Customs statistics, Korean confectionery exports to UAE and Saudi Arabia have risen 60.8 percent and 141.8 percent, respectively, compared with 2011. The popularity of Hallyu (K-Wave) is also remarkable. Starting with the success of ‘Dae Jang Geum’ which recorded a 90 percent rating in Iran, many Korean TV shows have aired successfully in the Middle East. The growing popularity of K-pop is also considerable. The first music and culture convention ‘KCON Abu Dhabi 2016’ was a huge success with 8,000 fans and many idol groups have had concerts in the Middle East. State level effort also has continued to share cultural value in depth. Two Korean Cultural Center are running in the Egypt and Abu Dhabi and different events has been offered by Korean embassies around the Middle East.

This K-Wave trend has led to a boost in tourism. According to the Korea Tourism Organization (KTO), the number of tourists from the Middle East has soared over the past few years. In 2016, nearly 200,000 tourists from the Middle East visited South Korea, double the number of tourists in 2011.

Beyond cultural exchange, South Korea has also contributed to keeping peace in the Middle East. The Cheong-hae naval unit has been deployed for international maritime security and to counter the spread of terrorism. They also carried out an operation called ‘Dawn of Gulf of Aden’ which was successfully rescued 21 crew members of a Korean ship hijacked by Somali pirates. In addition to the Cheong-hae unit, the Dong-Myung unit has been engaged in rebuilding in Lebanon and the Ake unit has helped to train soldiers of the Persian Gulf state in UAE.

However, several obstacles such as fluctuating oil prices, unstable regional security, cultural, and religious difference still remain. In particular, armed conflict and unstable political situations in the Middle East need worldwide cooperation and focus to move forward. Considering Korea’s growing interest in the regions, it’s possible to play an important role by cooperating with Middle East nations in depth. According to Korea Institute for International Economic Policy (KIEP), many oil-supplying nations are promoting economic diversification for falling oil prices, it will lead to increased investment in non-oil based industries such as medical care, tourism, finance and others. South Korea has mainly enhanced its business tie with Middle East in construction and resource related industries. South Korea is also endeavoring to follow this diversification especially medical care. However, Korea should diversify investment in accordance with this phenomenon and prepare the post-oil era with the Middle East to greet the real ‘Second Middle East Boom’

Juho Choi is an intern at the Korea Economic Institute of America and a student of the Dong-A University in Busan. The views expressed here are the author’s alone.

Photo from Gordon’s photostream on flickr Creative Commons.

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ASEAN-Korea Relations Under the Next South Korean Administration

This is the second in a series of blogs looking at South Korea’s foreign relations in the run up to the next Korean administration taking office on May 10. The series also includes blogs on relations with North Korea, the United StatesChina, Japan, the European Union, Russia, the Middle EastLatin America, and Africa.

By Patrick Niceforo

Since establishing a Sectoral Dialogue Partnership with the Association of Southeast Asian Nations (ASEAN) in 1989, South Korea has rapidly expanded its diplomatic ties, economic partnerships, and development assistance efforts in Southeast Asia. In that time, trade between South Korea and ASEAN has expanded from $26.8 billion to $118.8 billion. As ASEAN continues to develop economically, the next South Korean administration will look to build on the success of prior administrations in growing economic ties with this increasingly vibrant region.

South Korea’s diplomatic relationship with ASEAN extends beyond its bilateral relationship with the ASEAN member states. Since 2012, South Korea has maintained an Embassy in Indonesia specifically for ROK-ASEAN relations. The establishment of the ROK-ASEAN Embassy was consistent with former President Lee Myung-bak’s “New Asia Initiative,” which called for increased levels of official development assistance (ODA), expanded trade networks, and multilateral cooperation on global issues such as climate change and disaster management. In addition to having bilateral FTAs with Vietnam, Indonesia, and Singapore, South Korea is also signatory to a Free Trade Area (AKFTA) with all of ASEAN which helps to facilitate and expand economic, trade, and investment cooperation in the region. South Korea has also gradually stepped up its ODA to Southeast Asia over the years.In 2015, about one quarter of South Korea’s overall $1.9 billion in ODA went to Southeast Asia, more than twice what it provided to the region in 2010.

South Korea can look forward to developing its role in regional trade through the ASEAN-driven Regional Comprehensive Economic Partnership (RCEP). RCEP is an agreement that, in addition to ASEAN member states, includes South Korea, China, Japan, India, New Zealand, and Australia. With negotiations launched in 2012, RCEP covers areas such as trade in goods and services, foreign investment, and dispute settlement. As the next South Korean administration comes to office it will need to prioritize RCEP and its negotiation strategy, as the deal could be signed as early as mid-2017.

Tourism from ASEAN

A potential opportunity for South Korea is attracting more international tourism from Southeast Asia. The number of Chinese tourists in South Korea has plummeted as a direct result of THAAD, with a 40 percent drop in March. This is concerning given that China contributes nearly half of South Korea’s foreign visitors. According to the LG Economic Research Institute, Chinese tourists spent $13.7 billion in South Korea in 2015, over 62 percent of its foreign tourism revenue. However, because ASEAN and South Korea jointly designated 2017 as the ASEAN-ROK Cultural Exchange Year, there are already plans to increase youth exchange programs and foreign investment. South Korea could capitalize on these programs to develop and expand sustainable tourism with its ASEAN partners. Generally speaking, larger numbers of tourists from ASEAN member countries have been traveling to South Korea over time. While Southeast Asian tourists are unlikely to replace the depleted numbers of Chinese tourists in South Korea, increased tourism could at least help alleviate the problem while also contributing to South Korea’s overall mission of expanding cultural exchange.

Patrick Niceforo is a graduate student at the Middlebury Institute of International Studies and an intern at KEI. The views expressed here are the authors’ alone.

Photo from Nicolas Mirguet’s photostream on flickr Creative Commons.

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Chinese Tourists to South Korea Drop 40 Percent in March Amid THAAD Row

By Jenna Gibson

It’s official – new numbers from March confirm that China’s THAAD retaliation has significantly cut into South Korea’s tourism industry.

According to new data released today by the Korea Tourism Organization, the number of Chinese tourists arriving in South Korea fell 40 percent year-on-year in March 2017.

Only 360,782 Chinese visitors came to South Korea in March, down from 601,671 in March last year.

Considering that China’s alleged travel ban only took effect on March 15, about halfway through the month, it’s possible that April’s drop could be even more dire.

South Korea’s tourism industry is heavily reliant on Chinese visitors – in 2016, they made up 47 percent of all tourist arrivals and 70 percent of sales at Korean duty free shops.

According to a previous KEI article, “Chinese tourists spent an average of $2,391 per person while visiting Korea – meaning the 8 million Chinese tourists who visited Korea in 2016 brought nearly $20 billion into the local economy.” So, if the 40 percent cut in visitors results in a corresponding drop in revenue, the Korean tourism industry could lose up to $7.7 billion as a direct result of China’s THAAD retaliation.

Chinese Tourism Graph March

There is a silver lining in the March tourism data. Despite this massive 40 percent drop in visitors from China, the total number of people entering South Korea in March was down only 11.2 percent over March 2016. This is thanks in large part to a 22 percent jump in visitors from Japan, the second-largest group of tourists in Korea after China.

Other countries such as Taiwan, Myanmar, Vietnam and Mongolia also showed significant increases. This may be a good sign for the Korean government, which is heavily targeting Southeast Asia and the Middle East to diversify the industry and decrease their reliance on tourists from China.

The Ministry of Culture, Sports and Tourism is reportedly focusing more on advertising in Southeast Asia and Japan, and Seoul has started posting signs at major tourist destinations in Bahasa Indonesia, Malaysian, Thai and Vietnamese.

In addition, the KTO has been increasing their focus on tourists from Muslim-majority countries, helping local restaurants get halal accreditation and even hosting a Halal Restaurant Week at the end of last year to highlight Korean food options for Muslim visitors.

Meanwhile, just after the ban took effect, the Korean Ministry of Trade, Industry and Energy promised to provide 400 billion ($349 million) to support businesses affected by the THAAD retaliation, including those in the tourism industry.

This is not the first crisis that the Korean tourism agency has dealt with in recent years. During the peak of the Middle East Respiratory Syndrome (MERS) outbreak in July 2015, total tourism arrivals were down 53.3 percent over the year before, including a 63.1 percent drop in arrivals from China. Later that year, the Korea Culture and Tourism Institute estimated that MERS cost the tourist industry 3.4 trillion won ($3 billion) in lost revenue. The fact that the tourism industry was able to bounce back from that significantly greater drop bodes well for its ability to deal with this crisis as well.

While it remains to be seen how deep this THAAD spat will cut the Korean tourism industry over time, it is clear from these new numbers that the Chinese retaliation should not be taken lightly. As the THAAD system continues to go through the deployment process, Korea will have to keep an eye on the immediate as well as secondary effects of China’s policies.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Graphic by Jenna Gibson. Photo from Tom Page’s photostream on flickr Creative Commons.

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What Do North Koreans Do for Fun?

By Rose Kwak

It is hard to picture what North Koreans do for fun in a country notoriously known for human rights violations against its people, where seventy percent of the population is food insecure and its people are constantly indoctrinated by the state.  However, despite many bleak and dark images surrounding North Korea, many North Koreans enjoy various forms of entertainment—ranging from taking families to dolphiariums in Pyongyang to inviting friends over for karaoke.

Behind closed doors, many North Koreans also take pleasure in watching South Korean dramas and movies, which is prohibited by the state but easily accessible through video recorders and CDs in black markets. While recreational activities and access to these entertainment venues is largely dependent on socio-economic class and regions, South Korean media is consumed by North Koreans across a wide range of socio-economic gradients. The following are types of entertainment cultures thus far known in North Korea.

Amusement parks and entertainment venues:

Since Kim Jong-Un came into power, Kim has been working toward “improving the lives of his fellow millennials” and has ordered constructions of various entertainment venues. There are quite a number of other large amusement parks across the city such as Kaeson Youth Park and Manyongdae Fun Fair, to name a few. In a power-starved country where the satellites reveal pitch black images by night, Kaeson Youth Park facilities are lit like “Times Square.” Kaeson Youth Park covers more than 400,000 square meters and holds various rides for families and friends to enjoy. Munsu Water Park is another recreational park for families and it includes about 26 pools. The Mirim Riding Club offers horse-back riding for eight dollars per hour outdoors and ten dollars per hour indoors.

In 2012, Rungra People’s Pleasure Ground was opened to the public by Kim Jong-un and his wife Ri Sol-ju at the opening ceremony. Rungra People’s Pleasure Ground offers exciting and varying options for family entertainment including a dolphinarium, water parks and a mini-golf course. There are also ice-skating rinks and ski resorts for those who could afford. Generally, these amusement parks and grounds are reserved for the ten percent of North Korea’s elites.

Drinking, Dining and Dating Culture:

When it comes down to dating and sex, North Koreans are extremely conservative. Dating is strictly forbidden on university campuses, albeit many young couples find a way to go on dates and to enjoy each other’s company. Outside of campus grounds, many young couples go to restaurants that serve tasty meat or go to jangmadang (markets) to shop for small goods, as well as to visit a nearby mountain trail, river side or beach. While average North Koreans cannot afford luxury items, in recent years, many North Korean couples have started to wear matching tokens or jewelry like the South Korean counterparts. Social clubs are another way in which young women and men meet one another. During holidays, social clubs are hosted for masses and dance parties take place in various places such as Kim Il-Sung Square.  Because North Korean men go to military for ten years after high school, most serious romantic relationships develop in the late twenties, often times through blind dates set up through relatives and close friends.

In recent years, there seems to be an increase in demand for restaurants and bars. For average North Koreans, meals usually consist rice and a few side dishes. However, the elite few in Pyongyang tend to revel in lifestyles that poses stark contrast with those of the rest. One journalist reflecting upon this flashy lifestyle explained that this small privileged class known as the “donju”(translated as “masters of money”) are living a cosmopolitan life in “Pyonghattan.” They would spend ten to fifteen euros equivalent per meal to indulge in expensive prime steak or Wiener schnitzel and wear clothes from brands like Zara and H&M.

Another prominent aspect of North Korean recreational life is “eumjugamu.” “Eumjugamu” in Korean is a combined word for “drinking, music, and dancing.” While most North Koreans can’t afford hard liquor like tequila, about eighty to ninety percent of North Korean men drink on daily basis. Average North Koreans drink state-produced alcohol such as Yangdok-sul or Taedonggang beer. Many North Koreans in the countryside brew their own beer with corn or fruits (known as nongtaegi) despite the fact that this is illegal. Unlike their South Korea counterparts, house parties are also fairly common in North Korea. Wealthier elites have karaoke machines to enjoy.

South Korean media consumption:

Consumption of South Korean media is a form of entertainment not just exclusively reserved for the elites. The reason is that many North Koreans are able to obtain video recorders and DVDs illegally through black markets. Especially in Chinese bordering provinces like North Hamgyong, people are able to watch South Korean broadcasts through their television. In other areas, North Koreans are able to obtain South Korean entertainment CDs and DVDs. A defector who lived in Yanggang Province explained that people rent CDs that contain popular South Korean dramas. Many North Koreans also watch South Korean dramas through video recorders that are sold by Chinese merchants or at black markets. Within trusted circles of friends or relatives, many even watch dramas together. The impact of South Korean media consumption is great enough to have affected people’s lingo as North Koreans began to adopt words only used in South Korea.

According to an InterMedia survey of North Korean refugees, approximately 33 percent of North Korean defectors claimed that they had access to and listened to foreign radio. About 47 percent were able to obtain free-tuning radio from the black market and about 23 percent through Chinese merchants. A survey of North Korean defectors revealed that approximately 98 percent of USB owners kept South Korean dramas and/or music. Through “passive dissemination” and “inter-personal distribution,” South Korean TV is becoming rather popular in North Korea.

Kim Jong-un recently launched a North Korean Netflix-style service called Manbang that enables people to re-watch documentaries about their leaders as well as to learn Russian and English. Manbang supposedly offers five channels that show state-sanctioned news and educational programs.

Rose Kwak is an intern at the Korea Economic Institute of America and a graduate of Davidson College in North Carolina. The views expressed here are the author’s alone.

Photo from Stefan Krasowski’s photostream on flickr Creative Commons.

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The Year of the Unexpected: A Look Back At the Korean Peninsula in 2016

By Troy Stangarone

In the Chinese zodiac, 2016 is the year of the Fire Monkey. Fire Monkeys are said to be ambitious and adventurous, as well as irritable. Despite Donald Trump’s not having been born in the year of the Monkey, looking back, his victory in the U.S. presidential election that year may yet seem fitting. However, rather than being a year reflective of the characteristics of the Fire Monkey, 2016 might be better known as the year of unexpected events around the world and on the Korean peninsula. Whether it was the British vote to leave the European Union in June or the impeachment of the South Korean President Park Geun-hye in December, 2016 will be remembered for a series of unexpected events and the questions they have raised about how they may shape the future.

As we take our annual look back at the events that helped to shape the Korean peninsula during the past year, it is also an opportunity to review the events we highlighted on The Peninsula in our annual 10 Issues to Watch For on The Korean Peninsula in 2016 blog. For a year that was dominated by such a large number of unexpected events, our annual look ahead to the events of the coming year holds up surpassingly well. However, while our look ahead was correct on the importance of many events in 2016, those same events also often played out in surprising ways that will have significance beyond what we expected earlier this year. One example of this is the U.S. presidential elections. While U.S. elections always hold significance for the Korean peninsula, few foresaw the election of Donald Trump and the implications his presidency could have for the peninsula early in 2016.

With that said, here’s a brief look back at the 10 issues we highlighted and what happened:

  1. No Significant Progress with North Korea – After North Korea began 2016 with a nuclear test, the international community moved towards placing greater pressure on Pyongyang. This included sanctions at the UN, which would later be strengthened, to cut off North Korea’s trade in minerals such as coal, and bilateral sanctions by the United States to cut North Korea off from the global financial system. As was expected at the time little progress was made with North Korea on resolving the nuclear issue, but the one surprising element was that rather than try to find a way to engage North Korea after a new round of sanctions, South Korea went all in on pressuring the North with the closure of the Kaesong Industrial Complex and lobbying countries to cut their ties with Pyongyang. While we were right on the broader element of there being little progress with North Korea and how structural issues such as the U.S. elections and sanctions would inhibit progress, the strength of South Korea’s stance was one of the unexpected turns of 2016.
  2. If There Will Be Another Round of Family Reunions – If there was going to be progress in relations between North and South Korea it was going to require both countries to separate the nuclear issue from other issues in their relationship. Neither side was able to do so in 2016, which is regrettable for both the humanitarian burden that it places on the divided families and for the reality that family bonds will be one of the important ingredients for unification if it takes place at some point in the future. The longer that families remain divided the further apart the two Koreas are likely to drift.
  3. Could a China-North Korea Summit Still Happen? – This is one issue that was fairly straight forward. While there had been suggestions in late 2015 that Chinese President Xi Jinping might finally meet Kim Jong-un thanks to improving relations, the nuclear test in January ended what little chance there may have been for a China-North Korea summit.
  4. Korea-Japan Relations – When looking at Korea-Japan relations heading into 2016, clearly there had been prior progress. At the same time, it seemed unlikely that there would be the type of progress that the U.S. might have liked and the prospect for backsliding existed. While Japan did approve money for the comfort women fund, the agreement itself remains controversial in South Korea and may face pressure under the next administration. As for the comfort woman statue near the Japanese Embassy, it remains an issue for the local government of Seoul. While progress was made in relations, unsurprisingly, much work remains.
  5. How the U.S. Elections Could Impact Policy – Here we were right about how the political parties viewed the situation in Korea, but wrong about the overall impact of the elections. While we foresaw the critiques of the Obama administration’s policy and the push back on issues such as the Trans-Pacific Partnership (TPP), the degree to which then candidate Donald Trump would shift the debate with his repeated push on the question of South Korea’s contributions to U.S. troops on the peninsula, and suggestions that the U.S. might withdraw those troops and allow South Korea to develop its own nuclear weapons, and that a candidate with these views would win the presidency, were clearly unforeseen. The ultimate result of the election is potentially much more significant for the peninsula than anyone might have imagined at the beginning of the year.
  6. South Korean National Assembly Elections – Here we saw the fairly divided electorate give the opposition Minjoo Party a slim majority and a display of surprising strength by Ahn Cheol-soo’s new People’s Party. However, the impeachment of Park Geun-hye likely means that any signals the National Assembly elections may have had for the presidential election in 2017 no longer matter.
  7. Cooperation Between Korea and China in the G20 – At the G20 in China, South Korea worked with China as expected to help advance the agenda, but IMF quota reform and global safety nets played less of a role than expected during 2016.
  8. K-Pop’s Next U.S. Breakthrough – While K-Pop and Hallyu more generally remained popular in much of the world, especially with the release of Descendants of the Sun, K-Pop continued to have difficulty breaking into the U.S. market. The English language debut of CL, Lifted, was expected to give K-Pop its first breakout in the U.S. since Psy, but the album has yet to produce a chart single in the United States.
  9. South Korea’s Trade Policy – Events on the trade front have played out largely as expected. While TPP, should it be revived, will be an issue for the next Korean administration, there has been significant progress on the Regional Comprehensive Economic Partnership (RCEP) talks that include the ASEAN, China, India, Australia, New Zealand, Japan, and South Korea.
  10. Has Samsung Turned the Corner? – After two difficult years Samsung had turned the corner in 2016 with the successful launch of the Galaxy 7 and the new Edge. However, all of Samsung’s progress melted down with the battery issues of the Galaxy Note 7. As a result, next year will again be a key year for Samsung as it once more looks to turn another corner and rebuild consumer confidence after the issues with the Note 7.

Beyond the events that we expected, here is a look at some of the unexpected events that helped to shape 2016:

  1. Multiple Nuclear Tests and the Advancement of North Korea’s Nuclear Program – Before we even published our look ahead to 2016, North Korea had conducted its first nuclear test of the year. It would go on to break with its pattern of only conducting a single test in a year by conducting a second nuclear test in September. While much attention has focused on the significant increase in North Korean missile launches and tests in 2016, the most significant step may have been in the advances the program took in developing a second strike capability. Though initial tests of a submarine launched ballistic missile failed, North Korea had made progress before the year’s end.
  2. The Closure of the Kaesong Industrial Complex – South Korea took the unexpected step of closing the Kaesong Industrial Complex in response to North Korea’s first nuclear test in 2016. The closure was significant for several reasons. Not that long beforehand South Korea had been pushing to internationalize the complex to avoid the prospect of the complex being shut down after North Korea had withdrawn its workers in 2013 for political purposes. Kaesong also held symbolic importance as the last remaining connection between North and South Korea, as well as the last vestige of the prior sunshine policy. While closing Kaesong was a significant step it may have played a role in encouraging the international community to take stronger steps against North Korea.
  3. International Sanctions on North Korea – While there is nothing necessarily surprising about the international community sanctioning North Korea over its nuclear test, what is significant about the current round of sanctions are the steps that they take to try and limit North Korea’s ability to continue its nuclear program. There are now requirements to inspect North Korean cargo, even that of North Korean diplomats, and caps have been placed on North Korean exports of coal while bans have been placed on other mineral exports. The United States has moved to cut North Korea off from the international financial system and has set in place steps to use secondary sanctions to go after those who enable North Korea. While sanctions are unlikely to resolve the North Korean nuclear issue on their own, they were significantly strengthened in 2016.
  4. The Political Crisis in South Korea – The corruption and influence peddling scandal surround Choi Soon-sil, a longtime confidant of President Park Geun-hye, engulfed South Korea is a political scandal that has seen millions of South Koreans protest in the streets and the impeachment of Park Geun-hye by the National Assembly. As a result of the scandal, South Korea faces an uncertain political future in 2017. Even before the new year begins, there has already been a split within the conservative Saenuri Party with 29 members leaving to form the New Conservative Party for Reform.
  5. THAAD and Dispute with China – Beyond sanctions, one of the steps being taken by the United States and South Korea to deter aggression by North Korea is the deployment of the Thermal High Altitude Arial Defense, or THAAD. This is a step that has been strongly opposed by China which sees it as undermining Beijing’s own interests in the region. While the evidence seems thin to date that China has actually done anything more than complain, there have been concerns that China will retaliate economically against South Korea by restricting its exports of Hallyu to the China and Chinese tourism in South Korea.  Taking such steps would harm Chinese as well as South Korean interests.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Gage Skidmore’s photostream on flickr Creative Commons.

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Tourism in Korea Projected to Reach Record High in 2016

By Jenna Gibson

After a rough 2015 marred by a major health scare, tourism to South Korea has bounced back and then some.

In newly released data from the Korea Tourism Organization (KTO), 8.1 million tourists entered South Korea so far in 2016, a 21 percent increase over the same period in 2015. If the pattern holds for the rest of the year, Korea could break 16 million tourist entries for the first time in its history. In fact, the KTO is targeting 16.5 million tourists by the end of 2016.

Fear surrounding an outbreak of the Middle East Respiratory Syndrome (MERS) in early 2015 depressed tourism to South Korea, causing tourist entries to fall for the first time since 2003. However, this 2016 jump seems to put the growth back on track, showing a 16.2 percent increase over 2014 levels, before the MERS scare.

Korea Tourists Graph 2016

Chinese visitors are by far the largest group, making up nearly 50 percent of visitors to Korea thus far in 2016. The next highest is Japanese visitors, who make up just 12 percent of tourist arrivals. Americans remain a small piece of the pie at only 5.4 percent of tourist arrivals, but this number did increase 13.5 percent year-over-year in May 2016.

KTO also highlighted the increase in group tour arrivals. People arriving as part of a large tour group increased by 35 percent this year so far, reaching 140,000. This method is particularly popular among Chinese tourists, and includes those who are awarded trips as a benefit through their employer.

Meanwhile, sales at duty free shops have seen a similar jump. In the first half of 2016, duty free shops racked up 5.77 trillion won ($5.1 billion) in sales, a 26.1 percent increase over the same period in 2015. According to the Korea Herald, if these numbers keep up they could reach a record 12 trillion won ($10 billion) for 2016. This would mean duty free sales doubled in the five years since 2011.

This increase is not entirely thanks to foreign visitors, but the increase in tourists has certainly helped. In the newly released 2016 data, Korean customers made up 57.1 percent of customers to those stores, but only accounted for 41.6 percent of sales. The average foreign national who shopped at a duty free store spent $345.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Gustavo M’s photostream on flickr Creative Commons.

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About The Peninsula

The Peninsula blog is a project of the Korea Economic Institute. It is designed to provide a wide ranging forum for discussion of the foreign policy, economic, and social issues that impact the Korean peninsula. The views expressed on The Peninsula are those of the authors alone, and should not be taken to represent the views of either the editors or the Korea Economic Institute. For questions, comments, or to submit a post to The Peninsula, please contact us at ts@keia.org.