By Jeremy Laurence
MOUNT KUMGANG, North Korea (Reuters) - A semblance of international free-market activity broke out on a dusty roadside in reclusive North Korea when about a dozen budding entrepreneurs from a struggling resort set up impromptu stalls.
Spotting an opportunity to make some hard currency, the workers from the Mount Kumgang resort, now a ghost town, produced a range of wares from locally made wine, honey and jam to traditional dolls and a home-grown aphrodisiac.
The North Koreans cheerfully encouraged buyers -- mostly Chinese travel industry representatives on a government-sponsored visit to promote tourism in the mysterious state -- to part with their U.S. dollars, Chinese yuan or euros.
The east coast Mount Kumgang resort was once a symbol of cooperation between North and South Korea, technically still at war having only signed an armistice, not a peace treaty, to end their 1950-53 civil conflict.
Three years ago, the shooting of a South Korean tourist by a North Korean soldier resulted in Seoul halting tours to the complex, effectively drying up a source of much-needed hard currency for the communist North.
The North said last month time had run out to resolve the row, expelling the South's remaining workers and saying it would start selling South Korean assets at the resort, valued at around $450 million.
North Korea, battling chronic food shortages, is known to have one of the world's most closed economies, a centrally planned system in which the state is meant to provide everything for its 20-odd million nationals from food and shelter to education.
North Koreans are taught that they have "nothing to envy" in the outside world. Yet the North is one the world's poorest countries and its economy is in ruins.
It has experimented with the free market, mainly by allowing limited private markets to develop near the Chinese border. A currency revaluation in 2009 paralyzed much of the nascent private business and triggered shivers of unrest and tighter controls.
But markets are again gradually re-appearing, even though foreigners are not permitted to visit, let alone buy.
"BETTER THAN VIAGRA"
Above a pretty lake off the east coast of the peninsula, a variety of North Korean products was on sale at the market on Thursday. A couple of Westerners traveling on the tour bought a packet of 10 capsules of Yangchunsamnok, marketed as an "accelerator for erectility," for $10.
"It's very good and more effective than Viagra made in the USA," said one of the North Korean guides in broken English. "It's also good for your health."
The product is made of "various medicinal herbs in Korea on the basis of modern medicinal science and technology and the theories of traditional Korean medicine." Among the listed ingredients is antler.
A jar of jam sold for $5, and honey was going for $7 a pot. Traditional dolls were priced at around $25.
As for the nearby resort, most of the North Korean employees are out of work, depriving the local population of a livelihood once made possible by hundreds of millions of dollars of South Korean money.
In its heyday, the resort earned the North tens of millions of dollars a year. Then, some 300,000 South Koreans stayed annually at the complex's seven luxury hotels and played golf at its seaside 18-hole course.
Now the two-storey clubhouse stands empty, a window smashed, while the hotels and villas are shuttered, with the exception of the Kumgansan Hotel which welcomes the trickle of foreign tourists coming in from countries other than South Korea.
About 100 Chinese travel industry representatives were taken on a guided tour of the resort this week as part of the North's push to market the complex. About 30 foreign journalists were also on the trip.
"It's a misunderstanding that we are trying to attract Chinese investors to this area," said the head of tourism at the resort, Kim Kwan-un. The aim, he said, was merely to attract Chinese tourists.
(Editing by Nick Macfie)