SEOUL • In the seaside city of Wonsan, North Korean families fire up barbecues on the beach, go fishing and eat royal-jelly-flavoured ice cream in the summer breeze. For their leader, Mr Kim Jong Un, the resort is a summer retreat, a future temple to tourism and a good place to test missiles.

He is rebuilding the city of 360,000 people and wants to turn it into a billion-dollar tourist hot spot. At the same time, he has launched nearly 40 missiles from the area, as part of his accelerated tests of North Korea's nuclear programme.

"It may sound crazy to outsiders to fire missiles from a place he wants to develop economically, but that's how Kim Jong Un runs his country," said Mr Lim Eul Chul, an expert on the North Korean economy at Kyungnam University in South Korea.

This combination of tourism and nuclear weapons is emblematic of Mr Kim's strategy for survival, say researchers and people familiar with the project.

Tourism is one of a shrinking range of North Korean cash sources not targeted by UN sanctions, and the brochures advertise to foreign investors some US$1.5 billion (S$2 billion) worth of potential ventures in the Wonsan Special Tourist Zone, which covers over 400 sq km.

The plan is strategically vital for Mr Kim, according to Mr Thae Yong Ho, North Korea's former deputy ambassador who defected in London last year. "Kim Jong Un knows that he can only control society and guarantee his long leadership if his role and influence in the economy is increased," said Mr Thae.

Wonsan holds symbolic power for the Kim dynasty: It was there that Mr Kim's grandfather, Kim Il Sung, who helped found North Korea at the end of Japanese colonial rule in 1945, first landed with Soviet troops to take over the country.

When the young Mr Kim was picked as the heir in 2009, he had few achievements to his name, noted Ms Kim Young Hui, who heads a team of North Korea researchers at Korea Development Bank in Seoul. If he can develop Wonsan, it will seal his image as a master builder.

REUTERS