Donald Trump’s peace prize is looking increasingly likely after news from North Korea this week that they are looking to partner with the US when it comes to paying for a high-end casino, possibly providing much-needed tourism revenue to South Korea at the same time.
How the plan came about
The Trump summit caused headlines across the globe, but recent news indicates that there may be a new and important topic to be discussed that doesn’t relate to the country’s nuclear power.
According to a South Korean report, Kim Yong Chol, a senior North Korean official, discussed the need for funding to build a high-end casino in the country. It is important to note that there are already foreign-only casinos operating in North Korea.
The thought of North Korea becoming the home of such a casino has gone from 0 to 100 in a very short space of time. Kim Yong Chol has reportedly requested investment support from the United States, opening trade communication between the countries. This comes a year after President Trump allowed the US to freeze any assets of all companies, businesses, organizations, or individuals trading goods, services, or technology with the country. The location for the potential venture is already at the center of redevelopment and is due to be completed in time for the country’s anniversary on April 15 next year. The planned resort is said to include a ski resort, among other attractions.
How it has been received
South Korea saw the share value of their casino companies jump after the announcement, likely because people assume that South Korean investment will also be sought in the venture. State-run Grand Korea Leisure rose by 6.52% and Paradise Group went up by 5.84% too. The South Korean government has estimated that the new tourist zone as a whole will likely generate $50m (￡37m) each year. With North Korea’s current trade volume at a mere $7bn (￡5bn), it could provide a much-needed increase in revenue for the government. Industry experts have, however, been cautious about whether the predicted boost in income from the resort would really be achievable. According to JP Morgan: “[they] are not even sure if a large-scale casino makes any economic sense in North Korea,” but a South Korean analyst, Cho Bong-Hyun said: “If North Korea denuclearization is realized, investment in North Korea will take place in earnest.”
Tellingly, he went on to say that; “The Wonsan area, from the position of the United States, would have merit.” So perhaps there is dialogue here after all.
Political stumbling blocks
Some issues would need to be ironed out before a high-end casino in the country could be seen as a viable investment, and most of them are political.
It is possible that these issues will be resolved during the summit between the US and North Korea. Kim Jong Un would need to successfully prove that the country is no longer undertaking any nuclear activity. But beyond that, there are strict quotas and entry requirements to be able to visit the country as it stands.
South Koreans are hoping that these will be lifted in order to allow a thriving tourism trade to start up north of the border. Should these issues be resolved in a timely manner, it is possible that investors will back the project before its completion next spring.
After all, President Trump knows enough about the resort business to give Kim Jong Un some advice about how to make it welcoming to tourists, if nothing else.