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North Korea: Witness to Transformation

The Russian Pivot

by | May 5th, 2014 | 07:00 am
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In a speech at the St. Petersburg International Economic Forum in June 2013, Putin touched themes that echoed Gorbachev’s groundbreaking efforts to redefine the Soviet Union as a Pacific power (most notably, in his speeches in Vladivostok and Krasnoyarsk in July 1986 and September 1988). Putin outlined Russia’s calling card in ambitious infrastructure developments including upgrading the Trans-Siberian railway and building out the pipeline infrastructure in the Far East.

Western views of the Russian pivot have generally been skeptical, noting the relatively marginal role Russia plays in Asia-Pacific trade and the failure to achieve effective cooperation with China even in areas where complementarities are obvious, such as natural gas.

But while all eyes are on Russian behavior in the Ukraine, troubles to Putin’s west could in fact motivate a more concerted diplomacy toward the east, including with respect to North Korea. Russia’s Foreign Minister Sergey Lavrov visited China in mid-April to lay the groundwork for a visit by Putin to China later this month; he will also attend the quadrennial summit of the Conference on Interaction and Confidence Building Measures in Asia. Since Xi Jinping took over leadership of the country in March 2013, he has visited Russia three times, including his maiden foreign policy voyage. As Doug Paal notes for Carnegie, China has predictable concerns about referendums on succession. Nonetheless, Paal argues that Russia’s isolation could make China a more important partner.

Of particular interest to this blog are a series of initiatives Russia has taken recently vis-à-vis North Korea, covered well by NKNews here and here: Alexander Fedorovskiy provides a longer-run background in a piece for Russian Analytic Digest last summer

  • Recently Russia has reiterated its interest in completing the Korean trunk line of the trans-Siberian railway, the motive for investments completed last year in the Khasan-Rajin rail link. This issue was raised at the Park-Putin summit in November.  There is also the longstanding issue of a possible pipeline that we have covered in some detail.
  • In late March, a delegation of Russian officials visited the country and signed a protocol outlining the ambitious goal of $1 billion in two-way trade by 2020. A curious feature of the agreement was the decision to allow settlement of trade in rubles. If North Korea is short of foreign exchange, this could be useful for Russian purchases but the DPRK would still have to earn the rubles. One possibility: that labor exports to the Russian Far East may ramp up under this agreement as well. It will be interesting to see if North Korean exporters are as interested in earning rubles on their exports; we are doubtful.
  • A month later, Russia’s vice-premier and special envoy to the Far East Yury Trutnev was also in North Korea with the governors of Russia’s far-eastern provinces (Primorsky, Khabarovsky and Amursky); the president of the autonomous Russian republic Tatarstan visited Pyongyang for talks on energy too. (Ironically, the the TASS story detailing the trip carried the headline “Vice-Premier Yuri Trutnev in South Korea.”)
  • By chance, the relevant Duma committee finally voted on the write-off of  North Korea’s Russian debt negotiated in 2012.  This complex agreement envisioned a joint fund that would finance common infrastructure projects.

North Korean motives with respect to these projects are relatively clear: they fit with the broader effort to secure more foreign investment and have the added advantage of diversifying away from China, including perhaps with respect to energy. For Russia, however, the motives may be less economic than geostrategic signaling. Moscow has the ability to make life difficult for Europe and the United States; it is not coincidental that the North Korea initiatives were taking place at the same time that Russia was pursuing a large energy deal with Iran that could effect sanctions with that country.

Comments (2)

Interesting piece. If one will observe increased Russia’s engagement with Vietnam and Mongolia, Russia has already pivoted to the Asia Pacific. It increased its military assistance and regular exercises with Mongolia while agreed to build the second Trans-Mongolian rail link and first-ever pipelines to and through Mongolia. Of course, Russians, esp., in last few months become very practical – because rails, pipes, and roads through Mongolia is the shortest safest, and most efficient in comparison with potential ones through Russian Far East and North Korea or Central Asia. Russia’s move is very recent – probably intensified by events in Ukraine and sanctions. Russia’s approach to North Korea is still been quite problematic (both Chinese and Russian businesses complain a lot) – Mongolia is becoming (has been another important) territory for Russian geo-economic pivot.

Mendee May 7, 2014 | 4:13 pm

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The same time, Russia wrote off North Korean debt of round about 10 Billion of US $, it wrote off the same amount with Cuba.
And just recently Lawrow toured Latin America, esp. Nicaragua.
Russia is back as global competitor to the US. And it´s more determined to lock horns with the US as China, because the US crossed the red line in Ukraine.

Roland May 5, 2014 | 12:27 pm

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