Wonsan Dreams

The Wonsan Area Development Corporation has released its 2016 “Introduction to Investment Projects in Wonsan-Mt. Kumgang International Tourist Zone” booklet. Some of the people involved in the booklet have taken CE trainings, so we were most pleased to run into this booklet in China.


First, the good: this is a well-produced booklet, nicely designed and laid out, in multiple languages. It clearly explains – sometimes with well thought out detail - the projects that the Wonsan planners wish to prioritize.

Unfortunately, the “wish” element is prominent, with many of the projects presented on a scale that is unlikely to happen. Two can only best be described as “mega-projects”.

A mega-project we’d like to see succeed is the Wonsan Brewery, which plans to draw on Poptong spring water to create 20,000 kiloliters of beer a year for domestic and international markets. The project is seeking $52.47 million and can be an equity investment or a joint venture. We sincerely wish them luck. One person connected with the project we’ve spoke to, however, suggested, “it doesn’t have to be 50 million, of course…1 million would be fine.” We know from experience that much more humble investments are sought after by Korean businesspeople.

Yet the booklet does this all over the place: projects are listed as large potential investments, rather than as more feasible propositions reflecting a risky operating environment. There are two restaurants that seek a $4.55 million investment – high numbers, even if they’re factoring the construction of the building in which it will be housed. It speaks to a cultural difference that might be hard to bridge with most potential investors.  North Koreans seem to want to shoot for the moon, but are then happy to talk about realistic projects. If, however, I’m a potential investor looking at these numbers, but without understanding this cultural quirk, I might just have a good laugh and move on.

Of all the ambition packed into the booklet, perhaps the least likely to be built is the Financial Service Centre, which one might think could be a few computers, accountants and finance specialists in an office. Instead, the Wonsan team are looking for $80 million to create a building with “a sail-style structure”, to have 210,000 square meters of floor space. It will, of course, have a revolving restaurant. “In the future many foreign tourists will visit the Zone and huge fund will be circulated,” states the blurb: “therefore, it is inevitable to set up a financial service center.”

Maybe so, but it won’t start with a giant sail-style building project.