North Korea Casino Alliance Presented to Trump by Diplomatic Envoy to US, Integrated Resort Investment Sought
Posted on: June 5, 2018, 02:00h.
Last updated on: June 5, 2018, 02:07h.
A North Korean official has reportedly asked for American investment to help build an integrated casino resort in Wonsan, a port city on the country’s east coast.
According to several regional news outlets, including respected South Korean broadsheet The Dong-a Ilbo, the request was made directly to President Donald Trump by Kim Yong Chol, top aide and special envoy to North Korean Leader Kim Jong Un.
Last year, Trump signed an executive order allowing the US to freeze assets of any company, business, organization or individual trading in goods, services, or technology with North Korea.
Kim Yong Chol visited the White House for talks with Trump last week, and delivered a special hand-written letter from his superior. This reportedly expressed Kim Jong Un’s desire for North Korea to achieve complete nuclear disarmament, setting the stage for the two leaders’ historic, off-and-on-again summit on June 12.
North Korea as Tourism Mecca?
South Korean casino stock jumped on the news, presumably due to speculation that investment from companies in the south would also be sought. Shares in South Korean state-run casino operator Grand Korea Leisure rose by 6.52 percent, while its smaller rival, Paradise Group, increased by 5.84 percent.
Development of the Wonsan-Kalma coastal tourist area is one of Kim’s pet projects, and his plans for the region were laid out in his New Year’s address.
Kim announced in 2014 that the area where he is believed to have spent much of his childhood would be developed into a summer resort destination for both Korean and international visitors. He’s reportedly funneled cash from North Korea’s sanction-strained coffers into improving infrastructure.
This includes the construction of a new airport, as well as the planned complete demolition and rebuilding of Wonsan city center, with five-star hotels, an exhibition hall, and an international finance center.
The Dong-a Ilb reports that the North Korean envoy and Trump — who, after all, was once in the gaming business himself and still has plenty of friends in high places in the industry — discussed plans for the casino, as well as a ski resort in Masikryong, according to a “diplomatic source familiar with the matter.”
Build It and They Still May Not Come
The South Korean government has estimated the tourist zone will generate around $50 million per year for its northern neighbor, a significant sum for a country whose annual trade volume is just $7 billion. In comparison, in 2017, the total value of US trade goods amounted to around $2.34 trillion, according to statista.com.
North Korea sees the project as means to ease its economic woes. Since 2017, it has been burdened with even tighter sanctions than previously, and this new, friendlier Kim seems to point towards an easing of the isolationist policies of the so-called Hermit Kingdom.
But analysts question the feasibility of a North Korean integrated casino resort and the regime’s ability to drum up tourism on a significant scale. And it’s unlikely that many — if any — US citizens would consider a vacation to North Korea.
In fact, it was just last September that Trump banned Americans from getting visas to the East Asian country, on the grounds that it was “detrimental to the interests of the United States.”
Years of stories about tortured prisoners and the return of American student Otto Warmbier — who had been taken as a political prisoner 17 months earlier for the “crime” of stealing a sign while on a trip — just a year ago, are also still fresh in the minds of most Americans. Warmbier died shortly after being returned to his family in Ohio, after reportedly having been in a coma for most of his prison camp confinement.
We’re not even sure if a large-scale casino makes any economic sense in North Korea,” said JP Morgan’s DS Kim in a note this week.
Most would be surprised to learn that two foreigner-only casinos do currently exist in North Korea: one in the capital of Pyongyang and the other in Rason, which is close to borders with China and Russia.
Let’s just say Macau isn’t too worried.
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