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Negotiating Mount Geumgang Negotiating Mount Geumgang
by Joseph Gatt
2019-11-29 08:28:48
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Very brief guide on negotiating the fate of jointly owned Mount Geumgang resort. Mount Geumgang is a hiking resort located in North Korea but managed by Hyundai-Asan, a South Korean firm. The joint venture started in 1999, when the Hyundai founder and CEO, a native of the region, donated 1,000 cows as a symbolic gesture to North Korea, as his first business transaction was that of a cow he stole and sold at the market. Hyundai-Asan owns about 5 hotels, all 5-star standard, which include hot spring spas and other facilities. The Mount Geumgang tour includes a visit to the most Eastern point on the Korean peninsula, and a hiking trail on Mount Geumgang. The resort is heavily guarded by North Korean soldiers. It operated between 1999 and 2009. In 2009, an elderly South Korean lady ventured out in the woods and was told by North Korean soldiers to back off. The elderly lady did not obey orders and was shot and killed. It is unclear whether she was under the influence of alcohol. South Korean president Lee Myung Bak suspended all permits to visit Mount Geumgang after the incident, and the resort has been a ghost town since.

guam01_400Now I will be very brief in my recommendations for North and South Korea. Right now Chairman Kim Jong Eun wants to demolish the Hyundai-Asan owned hotels and build better ones, and have full ownership over the resort. South Koreans, who are notorious for their penny-pinching despite reckless spending, want to negotiate keeping the resort as it is.

In negotiation you have four models and a combination of four models:

-The negotiator has time and money. He will usually be flexible and has nothing to lose.

-The negotiator has money but no time. You have to be quick to settle a deal, as he wouldn't mind leaving with no deal.

-The negotiator has no money but has time. This is North Korea's position. They will try to make the best possible use of time, will play emotional games and stretch time until they get a good deal.

-The negotiator has no money and no time. The negotiator is dangerous, and this could soon be North Korea's position. The negotiator will use every threat, and in some cases execute their threat.

So right now North Korea has time but no money. North Korea probably has a strategy to make the best use of time to gain a deal that is as lucrative as possible. North Korea is using time to its advantage, by trying to wear off the opponent until the opponent grows impatient and starts making huge concessions.

So North Korea's strategy is to buy time. They are silent for a couple of months, shoot a missile to stay in the negotiation. They are then silent for 3 months, before they threaten to demolish the Hyundai-Asan resort. Once a deal is made for that, they will remain silent for a few months before they do something provocative.

North Korea has the time advantage. If Trump and Moon Jae In fail to sign a deal and sign peace with North Korea, their parties could be hurt in the elections. North Korea knows that. So what North Korea is expecting is for Trump and Moon Jae In to come begging for a deal before the elections. And North Korea hopes it can get an excellent deal. Otherwise North Korea will use provocation tactics before the American and South Korean elections for the Americans and South Koreans either to come to the table begging for a deal, or American and South Korean voters being shocked by North Korea's behavior and will vote Trump and the South Korean liberals out.

That's the story.

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