It was proof to the world, the regime believed, of the victory of totalitarian socialism. More importantly, it was also a way to reward the regime's key supporters, and to keep them close.
Pyongyang is a closed city, sealed off by security forces that monitor movement at dozens of checkpoints. North Koreans cannot move there, or even visit, without official permission. Its estimated 3 million residents have been vetted for their ideological purity, or at least their connections to the inner circle.
In many ways, the capital is a complex mixture of facade and reality: blackouts remain commonplace in many neighborhoods; backstreets are dusty and potholed; the outsides of many apartment buildings are splattered with patches of mold.
But life is also far less grim than in the rest of the country. If nothing else, there is the appearance of opportunity.
Top officials in the ruling party, the government and the military live in gated neighborhoods closed to outsiders. They shop in stores filled with goods, and sing karaoke in wood-paneled restaurants. They live and work in constant proximity to power, opening up channels for professional promotion, business opportunities and black market profits.
So when the regime needs to ensure support, it knows where it needs to focus.
"The government is privileging Pyongyang as a political strategy," said Glyn Ford, a former European Union parliamentarian and international consultant who travels regularly and widely in North Korea. "The people who live in the capital are the people who count. They're the people who underpin the regime."
Their support is particularly important right now, with the ascension of third-generation leader Kim Jong Un, who clearly sees his political survival linked to improved standards of living.
His grandfather, Kim Il Sung, was an anti-colonial guerrilla who led the country during North Korea's Cold War heyday, when the Soviets showered the country with everything from oil to food. Things grew desperate in the next generation, when Kim Jong Il hardened the police state and launched a nuclear program that made the country an international pariah. He led the country through a mid-1990s famine that foreign economists believe killed hundreds of thousands of people.
Now, with Kim Jong Un's abrupt rise to power, Pyongyang is getting even more.
In just the past few months, the regime has opened the Dolphinarium (which also required a new 30-mile pipeline to pump in fresh seawater), a $19 million amusement park and an elaborate pool-and-water-slide complex. All are filled with adults, and all are wildly popular.
Even in Pyongyang, the top restaurants and karaoke parlors are too expensive for the rank-and-file supporters — everyone from party bureaucrats to low-ranking soldiers to schoolteachers — who also need to be kept happy.
Outside of Pyongyang, certainly, there are no $19 million amusement parks.
Asked what Kaesong residents do for enjoyment, a city official paused to think. There's the pool, Kim Ryong Mun said eventually, though it's really just for children. Finally, he had something: "Many people go outside and have picnics."
Kim, with his faded, blue-striped tie and digital camera hanging from his wrist as a sign of his success, blames international sanctions, imposed because of Pyongyang's nuclear program, for the lack of development.
"We are suffering because of the imperialist powers," he said, standing near his new chauffeur-driven car in the city center. Nearby, an elderly woman pushed a homemade wheelbarrow filled with bricks. A little later, a man rode by on his bicycle, with handmade shovels tied to it with twine.
Kaesong has "the determination to build a more prosperous city," Kim said, reciting a propaganda phrase that has become commonplace since the rise of the latest Kim.
"The problem of electricity is now solved," he said, when pressed about what needed to be done.
But how can that be, if there are only a few hours of power?
"We supply electricity in the evening, so people can enjoy their lives," he said. During the daytime, he added, the electricity goes to small factories. "This is normal."
On a recent evening, most lights were out by 10 p.m. Occasionally, though, you could see the orange glow of a cigarette, as a cyclist smoked as he rode home in the darkness.
And somewhere to the north, the lights of Pyongyang's amusement parks shone brightly.
The AP's David Guttenfelder contributed to this report.