Tag Archives: Trade

Ukraine Sanctions Potential Catalyst for Russia-Koreas Rapprochement

‘’To a large degree,’’ Russian parliamentarian Sergei Neverov said less than a fortnight ago, ‘’a ‘Cold War’ has been declared which is today expressed by devising sanctions.’’ While such statements are overly dramatic, Russia has indeed been growing increasingly unpopular in many European countries. This rejection by the West is likely to speed Moscow’s own pivot to the Asia-Pacific, seducing rising economies and expanding its diplomatic influence while consolidating its grasp on the weak provincial governments in resource-rich eastern Russia.

The eastern provinces have historically been neglected as Moscow attempts to juggle various other problems, leading the Russian Far East (RFE) to survive by funneling resources into China. By guiding the sales more closely, Moscow insures it deals with Chinese buyers

Map with the Russian Far East highlighted in red. Image taken from: http://en.wikipedia.org/wiki/Russian_Far_East
Map with the Russian Far East highlighted in red.
Image taken from: http://en.wikipedia.org/wiki/Russian_Far_East

as an equal, while harnessing the unspoken energy threat so effective in Europe.

Developing the coastal RFE equally allows for trade with the Asia-Pacific region, imports being especially important now with the growing sanctions targeting Russia. Getting more deeply involved with the growing financial powers of the region may pull Russia’s fortunes up with them, or in the worst case, increase the chances of the next generation of financial powers being sympathetic to Moscow. The other important possibility ports (such as Sevastopol in the Black Sea) open is power projection, obviously a priority for Russia. However, this may lose importance given the perception that the East and South China Seas are more ‘turf’ for China than for Russia, and that Beijing is unlikely to take kindly to interference.

 

Delving into specifics, it is an unsurprising theory that one of the first targets of Muscovite charm would likely be a region that Vladimir Putin has described as ‘’historically and geopolitically […] included in the sphere of Russia’s national interests’’: the Korean peninsula. While the perhaps quixotic leaders of the newborn Russian Federation burnt their bridges with North Korea in order to court the more ideologically appealing South, both Pyongyang and Moscow have interests in reconciliation. Seoul, a growing trade partner of Russia (Korean exports to Russia increased by 165.9% between 2009 and 2013) and one of the world’s largest economies (12th by PPP and 15th by nominal GDP), also has reasons to grow closer to Moscow.

 

First, why Russia would be interested in gaining influence in North Korea. While the Democratic People’s Republic of Korea (DPRK) is not very interesting as an economic partner—as stated here, Russian businesses lack the incentive to invest in the DPRK while North Korea lacks the funds to purchase Russian goods—, diplomatic influence in North Korea will help Russia regain its place as a regional power.

Being able to influence Pyongyang’s actions would allow Russia to attempt stabilizing the political situation, in its interest if only because of the proximity of would-be wars. Russia may also, despite this seeming unlikely, be able to convince Pyongyang to slowly denuclearize with the promise of a Russian nuclear umbrella. However, in a more reasonable long-term goal, Russia could cooperate with China in getting North Korea back into ‘six-party’ (both Koreas, China, Russia, Japan, U.S.) denuclearization talks, and with Moscow being one of the implicated parties, again use its influence to increase the chances of negotiations holding. While not as relatively important as China, some nations may find it preferable (or necessary) to cater to Russia as well as China in order to modify North Korea’s course of action.

Having a certain level of understanding between Moscow and Pyongyang is also necessary for the construction of any commercial land-paths directly from South Korea into Russia. More specifically, if the DPRK cooperates, tri-party projects such as a trans-Siberian and trans-Korean railway dubbed the Iron Silk Road could lead to the cheaper transfer of products between Europe and the Koreas.

Russia, for reasons similar to China, also has a certain interest in

Map of North Korea indicating various facilities related to the nuclear, energy, and chemical spheres. Image taken from http://gentleseas.blogspot.ca/2013_02_01_archive.html
Map of North Korea indicating various facilities related to the nuclear, energy, and chemical spheres.
Image taken from http://gentleseas.blogspot.ca/2013_02_01_archive.html

maintaining the current DPRK government system, a status quo needing protection and funding. Any transition away from the current government style is predicted to be both bloody and chaotic, leading to streams of refugees fleeing north. Even if China somehow absorbs the entire exodus, the many chemical and nuclear sites dotted across the map are of concern. While a Chernobyl-type incident, perhaps even willingly triggered by belligerents, would affect mostly Chinese population centers, Russian interests would certainly be damaged. Even postulating North Korea peacefully and flawlessly combines with the South, this leaves the possibility of a Western-aligned Korea pressed against Russian frontiers.

 

Nevertheless, given a lack of serious opening from Pyongyang for the past few years, Russia may have resigned itself to never truly seducing the current leadership.

 

South Korea is hence more appealing to Russia, to the point where

While trade between Russia and South Korea remains minor, it has grown rapidly in the past decade. Picture taken from http://topforeignstocks.com/2010/11/11/the-top-trade-partners-of-south-korea/
While trade between Russia and South Korea remains minor, it has grown rapidly in the past decade.
Picture taken from http://topforeignstocks.com/2010/11/11/the-top-trade-partners-of-south-korea/

Putin has made it clear he is prepared to ignore North Korea while working with Seoul. As recently as November 2013, the President himself has stated in Seoul that Moscow is ready to build an underwater pipeline transferring gas directly from Russia to South Korea despite the cost.

Trade, which in 2013 was over 250% of its 2009 value, seems to be the primary interest for both parties, although Moscow again benefits from influence with any party that can lower tensions in the region.

 

North Korea also stands to gain from renewing ties with Russia, despite Pyongyang’s attention to the issue having wavered since the leadership change. Since Soviet aid shriveled up following the collapse of the Soviet Union, North Korea’s economy has been floundering, surviving mainly due to Chinese trade and assistance. Other than the sheer economic benefits having an additional partner would bring, the DPRK leadership insures it has a counterbalance to Chinese influence by diversifying its income sources.

Tied to the aforementioned Iron Silk Road project is a Russian proposition to develop the North Korean port of Rajin, allowing an expansion of external trade. In September 2013, the Russian portion of the railroad was linked to Rajin.

Having Russia, a permanent UNSC member on poor terms with the West, as a strong ally will likely stem, if not entirely block for a time, UNSC sanctions targeting North Korea that China may otherwise let through for its own reasons. Even if the DPRK leadership can survive decades of a crippled economy almost unflinching, there are no reasons to invite additional sanctions.

 

As Western pressure on Russia increases, it seems likely the chances of a rapprochement between Russia and the Koreas would rise as well. North Korea may launch a missile or attempt another nuclear test as a statement that, despite Russia’s wishes it remains fully independent, although following the flare-up—presumably with rhetoric aimed solely at Japan or the United States, exempting South Korea—tensions will hopefully remain low.