Postcards From The Edge

Hyundai founder Chung Ju Yung met on Oct. 1 with North Korean leader Kim Jong Il, winning approval for a $10 billion industrial complex not far from North Korea's border with the South. The zone could attract Southern manufacturers, just as China's Shenzhen drew investors from Hong Kong 20 years ago--and bring capitalism to the North. "This industrial town can become isolated North Korea's window to the outside world," says one Hyundai official. But Rajin-Sonbong, a North Korean trade zone established in 1991, is a failure so far. Recently NEWSWEEK correspondent Hideko Takayama visited the zone. Her report:

A huge portrait of great Leader Kim Jong Il greets us at the border inspection area as we cross the Tumen River between China and North Korea. It hails the 57-year-old heir to Kim Il Sung as the sun of the 21st century! Brilliant pink cosmos flowers line the bumpy road to Rajin-Sonbong, the country's much-heralded special economic and trade zone, which has started promoting itself to tourists. The weather-beaten North Koreans marching along the road, toting heavy loads of produce on their backs, tell another story. Some squat beside the road. They wave, hoping to hitch rides from the few passing cars and trucks. But most vehicles are packed with goats, pigs and soldiers. There is no public transportation. Getting around seems to depend on leg muscles and patience.

This has to be one of the world's oddest vacation spots. The Stalinist rulers of North Korea are hoping tourism will help fund their famine-plagued economy. Earlier this year they cut a deal allowing Hyundai to ferry South Korean tourists to to Mount Kumgang, a spot of legendary beauty. Hyundai promised the North nearly $1 billion in income from the deal. Now the faltering trade zone is trying to draw tourists, too. Some Japanese have visited, but mostly Chinese come to shop for dried fish, swim in the ocean and gamble--perhaps the one thing they can do legally in North Korea but not at home. Des- perate for cash, the Kim regime has lowered its socialist principles and allowed the opening of a new casino.

Our trip begins in a fishing village visited in 1954 by Kim Il Sung. A woman in Korean costume says that the elder Kim offered villagers "on-the-spot guidance" on how to eradicate poverty: simultaneously fish and farm. At a school, propaganda paintings cover the walls, depicting the alleged horrors of life in South Korea, such as a tuition-collector harassing a poor family for money. Outside, children undergo paramilitary training. North Korea is still officially at war with the United States and South Korea, and the government teaches that battles could erupt again any time. "Defense physical education" goes beyond kicking and crawling under barbed wire. In the courtyard, a coach sets a padded hoop on fire and orders his pupils to jump through, like trained lions.

In the town square, a crowd dances to honor one of Kim Jong Il's innumerable anniversaries. (On this day, he was elected chairman of the National Defense Committee.) They are also celebrating Jong Song Ok, who won the marathon at the recent world championships in Spain. Jong returned home to a new apartment and a rapturous welcome. The parade through Pyongyang is covered for hours on state TV, which shows the runner tearfully thanking Kim. The next day, at a "mass game" in Rajin city, thousands of people sit on one side of a stadium and flash multicolored cards to create patriotic scenes for the edification of the other side. It's Education Day.

In Rajin-Sonbong, there is an eerie sense that things are not as they appear. At the Chindare (Azalea) restaurant, two women serve sashimi with Dutch beer and French wine--rare imports in North Korea. They use Korean names but speak perfect Japanese, and dodge questions about the rumors that surround the restaurant. North Korea watchers in Japan say they believe the Chindare is run by family members of the Japanese Red Army guerrillas who hijacked a Japan Airlines flight for Pyongyang in 1970. The hijackers have told Japanese media that they live the high life in Pyongyang.

The highlight for most Chinese travelers seems to be the casino. Hong Kong's Emperor group is building a $180 million casino hotel, but in the temporary Seaview Casino Hotel, a drab shell free of neon or other external signs of night life, about two dozen Chinese are playing blackjack with Chinese dealers. Guards stand by to make sure that no locals enter the building.

A 15-minute speedboat ride takes us to the rocky habitat of a colony of seals. Our guide jots down a note to include seals in future tours. He is less eager to show off the market. Vegetables, rice, fish and noodles are available for those with money (and Chinese money is accepted). Household goods such as brooms and nuts and bolts are on sale. I shop for rustic clothing, quilt squares and handmade notebooks. "Aren't you buying those handmade things to show your people how backward we are?" the guide asks.

Even in Rajin-Sonbong, poverty is glaring. Women and children carry baskets to pick edible grasses. Ragged children gather around a hotel to beg. Turning their backs so others can't see, they hold their hands out for money. Some of these children say their parents have died of starvation. Customers crowd a stall with vinyl shoes and a few TV sets. Without trying on the shoes, buyers grab their purchases. If the size is wrong, they sell them to someone else in the crowd.

At Rajin port, business is slow. Since 1991, the zone has attracted only $62 million in foreign investment. Workers grow cabbage and soybeans in an unused corner. I retire to the hotel. My room has an electric fan and a Hitachi TV. The karaoke bar plays grim patriotic tunes. Breakfast starts with a huge bottle of Coke. In keeping with Kim Jong Il's call to eat potatoes (as opposed to scarce corn and rice), the menu offers peppery home fries. In the end, I figure it was worth it: $490 for 3 days, not counting the $8 I lost in the casino. After all, how many people have played the slots in North Korea?