SEOUL, South Korea — The opening of a ritzy new beach resort in North Korea is puzzling pundits.

The impressive scale and apparent high quality of the resort are raising questions about the economy of the heavily sanctioned and supposedly poverty-wracked North Korea, which is only just reopening its borders post-COVID.

It also raises questions about its intended clientele. While hard currency-toting foreign tourists might form a small sector of the visitor base, the majority are likely to be locals, experts say.

Come to Kalma, comrades

North Korean leader Kim Jong-un, accompanied by daughter Jue Ae and wife Ri Sol-ju, oversaw the opening of the Kalma Resort on Tuesday, according to state media reports released Thursday and monitored by South Korea’s Yonhap News Agency.

Kalma, a 2.5-mile-long beach, is on the scenic Wonsan Bay on the country’s east coast, some 58 miles north of the DMZ.

One image from North Korea’s state media showed the Kims seated next to a swimming pool, watching as a comrade splashed down a water slide.

In another, Mr. Kim — not quite beach-ready in a black suit — cut a ribbon on the terrace of a balconied resort building.

An overview showed high-rise buildings and low-rise, Mediterranean-style, red-roofed villas lining a spotless white beach dotted with umbrellas.

Kalma, served by an airport and two rail stations, is scheduled to open Tuesday and “should play a leading role in establishing the tourist culture” of North Korea, Mr. Kim said, per reports.

Wonsan has a long history as a tourism site: It was patronized by some of the first expatriates to live in Korea in the early 20th century.

Mr. Kim’s late father, Kim Jong-il, famously moored his luxury yacht in the bay.

That vessel was visited by U.S. basketball star Dennis Rodman, whose entourage was the first to report that the Kims had a daughter.

South Korean media commentary focused on the public reappearance of Mr. Kim’s wife for the first time in a year and a half. Some speculate Mr. Kim is pushing his teenage daughter to the fore to promote her eventual succession as the nation’s first female leader.

Attention also focused on the Gucci handbag toted by Ms. Ri. Speculation suggests — with luxury imports to North Korea sanctioned — the bag perhaps entered the country via diplomatic channels.

Notable guests at the ceremony were Russian diplomats, indicating Russians may be targeted as visitors.

The two countries share a border, and relations have soared following the signing of a 2024 bilateral alliance that has seen North Korean troops fighting for Russia against Ukraine.

Tourist troubles

In addition to Kalma, Mr. Kim has overseen the construction of a water park in Pyongyang, a ski resort at Masikryong and a mountain resort at the country’s near-sacred Mount Baekdu. Luxury apartments have sprouted up in Pyongyang.

Where the money and materials for those grandiose projects come from is a mystery.

“The North Korean economy is a total enigma — even I don’t understand it,” said Moon Chung-in, an academic who has advised the three South Korean administrations that summited with North Korea. “During COVID, North Korea was building all kinds of apartment complexes at an amazing pace, but we don’t know how they got these construction materials.”

Mr. Moon, who joined all South Korean presidential delegations to North Korea, said he guessed some were imported from China, though even that is questionable, given border closures during COVID.

“There are so many unknowns,” he admitted.

Another question is who the projects cater to. Mr. Moon said Chinese, Russians and Southeast Asian tourists are likely targets.

Chinese media reported that some 200,000 residents visited North Korea in 2018, but it is not clear how many came in on day tours by bus. Kalma is far from China border crossings.

South Koreans could be a rich source of tourists — they surged into special tourism and investment zones just north of the DMZ from 1998 to 2016 — but bilateral relations are frozen.

Andrei Lankov, a North Korea expert at Seoul’s Kookmin University, said he doubted North Korea’s international tourism potential beyond niche markets, such as a handful of adventurous Westerners and — more recently — Russian soldiers recuperating from wounds suffered in Ukraine.

“North Korean officials don’t understand how modern international tourism — luxury or mass market — operates,” he said. “They don’t understand that their country is quite poor in tourist resources.”

Unreliable and infrequent transportation is an issue. Another is inflexible and carefully chaperoned itineraries, as are problematic Internet and mobile communications.

“On top of that, they probably don’t understand how bad their international reputation is,” Mr. Lankov said.

A South Korean tourist was shot dead in 2008, and a U.S. tourist, after being detained, was returned home in a coma and died in 2017.

All that suggests locals will be key to North Korea’s tourism ambitions.

Keeping loyalists loyal

Mr. Kim took office in 2012 after studying overseas. That experience likely inspired him to offer upmarket leisure options to fortify the loyalty of his elite.

“When he was fresh from Switzerland, he understood that the lives of his subjects were not full of excitement, so he was going to offer them necessary facilities,” Mr. Lankov said. “He paid a lot of attention to all kinds of leisure activities.”

Within North Korea’s “songbun” hierarchy are, broadly, the loyal class, the wavering class and the hostile class.

Loyalists make up about 23% of the population, with the top 1% being the super elite who run the country, said Robert Collins, author of a 2012 book on songbun, “Marked for Life.”

“They are pretty loyal, as they get a lot of privileges,” he noted.

But Mr. Kim needs to also secure the loyalties of a new kind of North Korean, who arose in the mid-1990s as a survival response to the collapse of the socialist state distribution system: The entrepreneurial “donju” (“money masters”).

Not a class per se, early donju undertook cross-border trade with China and kick-started basic “jangmadang” markets. Those bazaars started out as black markets, but became so critical to the economy that they are now standard.

In the last decade, many donju have shifted from trading to investing in consumer goods manufacturing to satisfy domestic demand.

However, they are not forming a middle class that could make demands of — or threaten — the regime: They need patronage.  

“The donju have the wherewithal to succeed by striving hard, but corruption usually has a lot to do with it,” Mr. Collins said.

“A person in the wavering class can succeed if they have initiative and the access to corrupt the right officials or police.”

• Andrew Salmon can be reached at asalmon@washingtontimes.com.