ONJUNG-RI (North Korea): From his perch on a huge illuminated billboard, the founder of this communist state, Kim Il Sung, smiles down benevolently as, a few yards away, North Korean waitresses serve snacks to a crowd of cheerfully tipsy South Korean tourists.

Behind a booth at the outdoor cafe, a decidedly sober-looking North Korean manager with a Kim Il Sung button on the lapel of her tweed jacket methodically counts a fat wad of US dollars.

Through ventures such as this at Onjung-ri, the main tourist centre of the Mount Kumgang enclave on North Korea’s southeastern coast, the regime is trying to meld Kim Il Sung’s anti-capitalist ideology with its desperate need for money.

“They hate the United States, but they love US dollars,” said Oh Mi Seon, a South Korean executive who works at one of the resort’s hotels.

Since it opened in 1998, the Mount Kumgang tourist operation has provided the regime of Kim Jong Il, the founder’s son, with at least $490 million, becoming one of North Korea’s largest legal sources of hard currency, say western diplomats who have analyzed the country’s finances.

Despite the long-simmering tensions over North Korea’s nuclear weapons programme, the tourist business is better than ever. Last year 260,000 tourists, mostly South Koreans, visited Mount Kumgang, more than triple the previous year, and the number is expected to grow 40 per cent this year, according to Hyundai Asan, the South Korean company that operates the resort.

Hyundai Asan hopes to open two new tourist enclaves in the North this year. Last month, Kim met with the company’s chairwoman in Pyongyang, North Korea’s capital, to sign off on a deal to bring tourists to Kaesong, a historic city just north of the demilitarized zone, and to Mount Paektu, a famous peak on the China-North Korea border. Pilot tours are expected to take place this month. “Everything is happening right now. There is a very positive atmosphere for dialogue and for new tour opportunities,” Jang Whan Bin, a director of Hyundai Asan, said last month. —Dawn/LAT-WP News Service