Moscow’s “turn to the East” and challenges to Russia–South Korea economic collaboration under the New Northern Policy

Abstract

The Republic of Korea (ROK) has not traditionally regarded the Russian Federation as an important partner in the Korean security crisis. Nevertheless, the ROK–Russia relationship has grown by leaps and bounds. Furthermore, the Moon Jae-in administration’s “New Northern Policy,” which focuses especially on economic collaboration with Russia, exhibits a great deal of compatibility with the “turn to the East” in the Russian Federation’s recent foreign and domestic policies. For Seoul, the “New Northern Policy” is not simply a means of generating economic benefits for the ROK but is also part of Seoul’s plans for promoting peace on the Korean Peninsula. Indeed, the Kremlin shares with South Korea not only the goal of increased economic interconnectivity but also a lasting peace on the Korean Peninsula. Nevertheless, two main barriers exist undermining aims outlined in the New Northern Policy. The continuation of the crisis over North Korea’s weapons of mass destruction (WMD) capabilities, particularly the perpetuation of the various layers of sanctions against Pyongyang, frustrate the economic integration as espoused in the New Northern Policy. Furthermore, economic conditions within Russia, namely, a lack of economic development within the Russian Far East, frustrate South Korean hopes for greater trade connectivity with Russia. Substantial changes to both the Northeast Asian sub-regional order as well as in the Russian Federation’s domestic economic situation, therefore, are necessary before the prospects envisioned in Seoul’s New Northern Policy can be realized.

Keywords

Economic Korea New Northern Policy Russia security

Introduction

Simultaneously dynamic yet still not up to the desired standards of both parties, the relationship between the Russian Federation and the Republic of Korea (ROK) has grown by leaps and bounds. Within the past 10 years in particular, South Korea has been desirous to solidify its ties with Russia in the field of economics and trade. Concurrently, over the course of the past decade, the Russian Federation has engaged in what has been labeled the “turn to the East,” which entails strengthening Moscow’s relationships with East Asian states as well as expanding Russia’s economic and political influence in the region. Moscow’s emphasis on the Asia-Pacific vector of its foreign policy entails goals such as establishing the modern Russian Federation as an Asian power, and connecting Russia (specifically the Russian Far East) economically to other East Asian commercial powerhouses. Today, South Korea values the Russian Federation’s wealth in natural resources as well as its potential to facilitate geographic access for the ROK to other parts of Eurasia. The Russian government, meanwhile views its relationship with the ROK largely in terms of the latter’s status as one of the top 15 most powerful economies in the world, endowed as it is with vast investment potential as well as advanced technology. The election of ROK president Moon Jae-in in 2017 led to a new emphasis on the specter of cooperation between the ROK and Russia starting at the bilateral level, with the hope of evolving into a multilateral cooperative framework. At the third Eastern Economic Forum in September 2017 in Vladivostok, Russia, Moon Jae-in unveiled his “New Northern” policy. At that time, Moon Jae-in declared that economic cooperation with Russia could be part of a wider strategy aimed at fostering peace in Korea (Rossiyskaya Gazeta, 2017a). Furthermore, Moon noted that Russia–South Korea cooperation cannot stand on its own, but must include North Korea’s participation. According to Song Young-gil, a lawmaker for South Korea’s Democratic Party and chair of the party’s Special Committee on Peace and Cooperation in Northeast Asia, the New Northern Policy can be summed up in two overarching goals. The first is to increase economic cooperation in a variety of economically relevant fields between the ROK and other countries including Russia and the post-Soviet republics of Central Asia. The second is to help mitigate military tensions on the Korean Peninsula by means of economic cooperation (Kang, 2018).

Seoul’s hope that increased economic integration—both between the Koreas and with other countries—will reduce the prospects of violent conflict in Korea is a most welcome prospect for Moscow. Indeed, the Kremlin’s economic interests in Asiatic Russia depend in large part on peace in Northeast Asia. Russia–South Korea economic cooperation, therefore has security undertones in addition to purposes of creating wealth. Yet the relative soundness of ROK–Russia ties notwithstanding, this article argues that there are two primary stumbling blocks for the realization of Moscow and Seoul’s mutual goals spelled out in the ROK’s New Northern Policy, which are found in both interstate security relations in Northeast Asia as well as internal economic conditions within the Russian Federation. The main challenge in the context of interstate relations, directly pertinent to the North Korean security crisis, is the issue of economic sanctions against the DPRK (Democratic People’s Republic of Korea), which undermine North Korea’s potential role in serving to connect Russia and South Korea economically. Although all countries involved (except, of course, North Korea) have approved laying economic punishment against Pyongyang for its security provocations, countries such as China and Russia have openly called for sanctions to be reduced. As for internal matters within specific states participating in the New Northern Policy, the Russian Far East, which is for Russia the geographic crux of its partnership with the ROK, presently experiences a great deal of economic underdevelopment in its own right. In particular, conditions within the Russian Far East undermine the potential for greater commercial connectivity between South Korea and the Russian Federation at large. Therefore, although economic integration with the ROK has the potential to serve the ROK and Moscow’s mutual security interests aimed at stemming instability on the Korean Peninsula, cooperation between Moscow and Seoul cannot occur to the fullest extent until the Russian Far East achieves a higher level of economic vitality than currently exists. Given that serious coverage of the relationship between internal factors within particular states as well as external factors in interstate ties in the context of security remains wanting (Ravenhill, 2013), the purpose of this article is to demonstrate the connection between interstate relations and Russia’s own economic situation to underscore the challenges Russia and South Korea face in their quest for economic cooperation.

Regarding the prospects that the stumbling blocks spelled out can be overcome, as the major barriers to the success of the New Northern Policy’s vision exist both in the context of interstate relations and the Russian economy, changes to both of these aspects are required to see the New Northern Policy succeed. Tensions surrounding the North Korean security crisis will need to be reduced substantially, at least to the point where there is broad interstate agreement that sanctions against Pyongyang can be partially, if not fully lifted. This is unlikely to occur until the main driver of sanctions against Pyongyang—the United States—realizes a sufficient level of confidence in its relations with North Korea. Yet even if punitive economic measures against the DPRK—both those implemented at the United Nations and US unilateral measures—were diminished to a point allowing for greater trilateral cooperation between the North Korea, Russia, and South Korea, conditions within the Russian Far East will nevertheless present their own hurdles. The Kremlin has consistently taken actions aimed at making the Russian Far East more conducive to economic integration with the Asia-Pacific, yet the diligence with which the Kremlin will continue pushing for the Russian Far East’s development will likely depend in part on to what extent the Kremlin wishes to position Russia’s Pacific territories as a self-sustaining center of economic activity versus merely serving as a nexus between the wider Russian Federation and East Asia (in other words, satisfying minimum requirements for development and investment in this particular sub-region of Russia). In any case, the Russian Far East is the key to the ROK’s economic relations with Russia.

Security considerations behind ROK–Russia economic cooperation

The formidable barriers to Russia–South Korea cooperation under the New Northern Policy notwithstanding, both Moscow and Seoul are united by a mutual view that the security situation on the Korean Peninsula is unsatisfactory, posing a threat to both Russian and South Korean interests. Threats do not become securitized based on subjective perception, but inter-subjective agreement between states. Because “security” is a social construct, issues that are considered to be security-related will differ from state to state (Oelsner, 2005). Despite the fact that securitizing Northeast Asia centers first and foremost on eliminating hostilities on the Korean Peninsula, many of the states involved in—and affected by—the Korean security debacle have competing agendas and visions over how peace in this sub-region of Asia can come about. The United States’s priority is North Korean denuclearization, while China wishes to preserve stability on its peripheries so that Beijing can continue pushing forward its program of generating a wide middle-class social base. As far as Russia–South Korea commercial ties are concerned in the matter of security, in addition to the Moon Jae-in administration’s aforementioned view of the New Northern Policy as a means of mitigating the risk of armed violence, the Russian Federation’s own national security strategy also mentions economic issues over three dozen times, indicating that the Russian security establishment has come to view economics as a security issue as well (Office of the President of Russia, 2009). The Russian government, furthermore, has outlined specific provisions (noted later in this article) that connect the economic development of the Russia Federation’s Asiatic territories to the Russian state’s overall security.

Although the notion that trade between states helps promote security has been subject to debate in international relations, recent quantitative research demonstrates that trade integration between countries does reduce the likelihood of armed conflict, and that economic integration programs have often been initiated based on political and security benefits as much as they have economic gains (J. Lee & Pyun, 2016). Much of the literature focused on security remains rooted in the vantage point of interstate relations, with some modest exploration of security as pertains to the internal nature of the state emerging of late. With the rise of transnational agreements and regional integration frameworks, particularly in the Asia-Pacific, there is some debate on the degree to which cooperative frameworks overlap in their coverage of economics or security, and to what extent they are compartmentalized. In light of the proliferation of economic- and security-oriented multilateral groups in East Asia, such organizations have largely remained compartmentalized. Economically oriented groups have been established to protect Asian countries from phenomena such as the 1997 IMF (International Monetary Fund) crisis. Security arrangements, meanwhile, are designed to handle regional security issues without forcing states to give up too much sovereignty (Pempel, 2010). There are nevertheless overlaps between the two, although in terms of security’s connection to trade, traditional security factors in more than non-traditional security. As the New Northern Policy at this point in time encompasses geographically continuous states (namely the two Koreas and the Russian Federation), it would be considered minilateral. In recent years, there has been an increase in minilateral arrangements in Asia that focus both on economic and security questions, including Asia-Pacific Economic Cooperation (APEC) and the Shanghai Cooperation Organization (SCO) (Aggarwal & Govella, 2013).

The ROK itself has vacillated between outreach to the DPRK and taking a hardline stance toward Pyongyang, largely depending on where the governing administration in Seoul falls on the political spectrum. Across administrations, however, the ROK has striven in recent years to promote itself as a middle power, largely to leverage its economic might while being caught between the great powers, especially China and the United States. By promoting economic relations with the Russian Federation as part of a broader effort at regional commercial integration, the ROK could possibly find a means of prying itself, at least in part, from continually being overwhelmed by China and the United States. Moscow, for its part, places a particular emphasis on striving to be an active player in Korean peninsular security (Ministerstvo Vneshnikh Del Rossiyskoy Federatsii, 2016). Moscow’s main security goal in Korea is stemming the outbreak of armed conflict, given that large-scale violence on the Korean Peninsula poses a grave risk for the overall development of the Russian Federation’s Asia-Pacific territories (Blank, 2015). More specifically,

Russia’s key security interest on the Korean peninsula is to form a peaceful and stable peninsula, which can help Russia to focus its own domestic reform. Russia’s security goals on the Korean peninsula can be summarized as preventing direct military conflicts between the two Koreas or military conflicts caused by the intervention of a third party, and as checking overconcentration of the armed forces there. The former objective aims to remove the security cost produced by the military instability on the Korean peninsula, and the latter goal intends to prevent the domino effect in the Northeast Asian arms race that seriously may destabilize Russia’s Far East security. (Ha & Shin, 2006, p. 14)

The Russian Federation’s status as both a great power and permanent member of the United Nations Security Council notwithstanding, South Korea has consistently downplayed a direct role for the Kremlin in fostering regional security. After North Korea’s second nuclear test in 2009, Russia sent a delegation to Pyongyang and then to Seoul to meet with North and South Korean officials to try and find a diplomatic solution to the North Korean nuclear situation (Zabrovskaya, 2012). Nevertheless, at that time, Seoul’s expressed interest in a multilateral security mechanism for the Korean peninsula envisioned only the two Koreas, along with China and the United States at the negotiating table (Hong, 2013). Nearly a decade later in the aftermath of the first North–South summit under Moon Jae-in on April 27, 2018, the Panmunjeom declaration stated that future negotiations would involve the two Koreas as well as China and the United States—no mention of Russia appeared. The lack of consideration for Russia as a security actor notwithstanding, there is potential for increased commercial collaboration between Moscow and Seoul, of which security is a desired by-product.

South Korea in Moscow’s “turn to the East” and Russian Far East development

Augmented economic cooperation between Russia and South Korea is possible not simply because of their sound bilateral ties but because of actions the Russian Federation has taken conducive to such coaction as well. The ROK’s visions for economic cooperation with the Russian Federation coincide with the Kremlin’s “turn to the East,” a term that applies to Moscow’s emphasis on the Asia-Pacific trajectory of its foreign policy (and to a certain extent domestic policies as well). Analysts often attribute Moscow’s eastward “pivot” to the punitive actions the West undertook against Russia in light of the 2014 invasion of Crimea, although the roots of the “turn to the east” precede the Crimea invasion by several years. The premise of Russian efforts to develop the Far East of the country is based on the concept of “security by means of development,” which aims to transform the Russian Far East into an infrastructure and technology hub of the Asia-Pacific (Kozyrev, 2014). In terms of economics, not only does Russia lack substantive commercial influence in East Asia, but it is also poorly integrated economically with East Asia despite its geographic thrust into the region. In many ways, Moscow’s keen interest in invigorating its Far Eastern territories is notable given the fact that the Russian Far East has traditionally been out of the consciousness of the upper echelons of Russia’s political class (Gelbras, 2001). In spite of (or rather, in response to) Moscow’s traditional lack of attention toward the Russian Far East, the Russian government under the presidencies of Dmitry Medvedev (in office 2008–2012) and Vladimir Putin (2000–2008, 2012–present) has attempted to correct this deficiency by implementing a series of reforms, through policy pronouncements and legislative initiatives as well as ministerial restructuring. In 2008, the Kremlin released a strategy for economic development titled “On the concept of the long-term socio-economic development of the Russian Federation in the period up to 2020.” The concept specifically cites countries such as South Korea as playing an important role in Russian access to technology that would assist in boosting the Far East’s economic vitality (Konsultant.ru, 2008). Six years later, the Russian government issued a law titled “On territories of advanced socio-economic development in the Russian Federation” that sought to create favorable business conditions for both Russia’s Far Eastern territories as well as international partners (Federal’nyy zakon № 473-FZ ot 29.12.2014 g, 2014).

The Russian government has, over the decade since it first released a comprehensive strategy for outreach with the economies of East Asia, taken concrete steps aimed at expanding Russia’s economic integration with East Asia. Examples of specific initiatives include Russia’s hosting of the Eastern Economic Forum in Vladivostok, an annual meeting in September first convened in 2013 that brings together business and political leaders from across the Asia-Pacific. The Eastern Economic Forum, or EEF, has been a particularly important vehicle for Seoul’s pursuit of economic cooperation with the Russian Federation. Not only was it where Moon Jae-in announced his New Northern Policy in 2017, but it was also a setting for officials from North Korea, Russia, and South Korea to discuss multilateral economic collaboration in 2018 in light of the DPRK–ROK rapprochement set in motion under the Moon Jae-in administration.

Particular to the structure of the Russian federal government, the Kremlin undertook a ministerial shuffle that culminated in the creation of the Ministry of Far Eastern Development in 2012. Moscow’s rationale for creating a ministry dedicated specifically to developing Russia’s easternmost regions was because the Kremlin wanted to give specific priority to Russian Far East development as well as facilitate cooperation with external partners. Russia’s Ministry of Far Eastern Development operates partially in Moscow and partially in the Russian Far East itself, so as to make a balance between the center of Russian power and the periphery, a fact that echoes the aforementioned negligence of Russia’s Pacific territories the Russian government has traditionally exhibited. The Far East development ministry has offices in Khabarovsk and Vladivostok, a coastal city that is particularly important for Russian integration with the Pacific. These regional offices of the ministry operate with a degree of authority that is more-or-less equal to Moscow. Originally, the Ministry of Far Eastern Development functioned alongside the Ministry of Regional Development; nevertheless, the latter ministry was abolished in 2014 (Blakkisrud, 2017).

Russia, South Korea, and economic cooperation

In 2008, after Lee Myung-bak met with newly elected Russian President Medvedev, Moscow and Seoul declared their relationship to be a “strategic partnership.” The ROK–Russia strategic partnership, however, has not had as much practical meaning for the ROK or Russia as either side may have hoped. In areas of mutual benefit, such as energy cooperation, the pace of collaboration between the ROK and Russia has been frustratingly slow (Ahn, 2010). In terms of the Kremlin’s relations with South Korea, however, the Russian Federation has clear interests in pursuing an economic with the ROK. Underscoring this is the production of Korea-related analyses from Russia’s major think-tanks. The most influential Russian policy research institutes, such as the Institute of International Relations and World Economy (IMEMO) and the Russian International Affairs Council (RIAC), have ties to the Russian federal government. Among the Korea-related research produced by IMEMO and RIAC, the majority of papers and research projects have focused on economic cooperation with South Korea (Sino-NK, 2018).

Even as ROK–Russia relations have yet to develop to a substantive level, as a result of their efforts to strengthen bilateral ties, the Russian Federation and the ROK have begun to see tangible results in augmenting their bilateral commercial ties. By 2015, the ROK had become Russia’s seventh-largest trade partner, although the composition of Russian exports to South Korea notably lacks in diversity, as natural resources (almost exclusively oil and natural gas) comprise nearly three fourths of Russian exports to South Korea. South Korean exports to Russia, meanwhile, largely consist of machinery and other technological goods (Ru-Stat.com, 2018). Customs data, furthermore, show that ever since South Korea rose to the rank of Russia’s seventh trading partner, there has been little to no change in the actual volume of trade between the ROK and the Russian Federation (Federal’naya tamozhenaya sluzhba, 2018). Even as the level of trade between the ROK and Russia had grown (and subsequently leveled off while remaining stable), the geographic distribution of Russia’s imports and exports with the ROK is uneven. Most South Korean exports to Russia end up in the European section of the country, while South Korean imports derive primarily from Siberia and the Russian Far East (Han, 2014).

South Korean economic collaboration with Russia under a specific program such as the New Northern Policy is not unique to the Moon administration. Former South Korean president Park Geun-hye had proposed her own “Eurasian initiative,” which sought to connect South Korea to the markets of Asia and Europe. The “Eurasian initiative” was limited in scope, primarily to cooperation with Russia and the post-Soviet republics of Central Asia. It set in motion renewed negotiations on South Korean participation in the Rason-Khasan special economic zone. South Korean companies such as Korail, POSCO, and Hyundai Merchant Marine were invited to invest in projects that ultimately aimed to connect trans-Korean and Russian rail lines, initially by upgrading rail lines connecting Khasan (in Russia) and the North Korean port of Rason (Vartanyan, 2016). The Park administration’s Eurasian initiative, however, did not make much progress for a variety of reasons, including an insufficient level of organization and official oversight (J. Lee, 2017).

Unique to the Moon administration’s New Northern policy is the designation of the so-called “nine bridges” of cooperation between the ROK and Russia. The main aspects of the “nine bridges” entail joint operations in agriculture, fisheries, natural gas, rail transportation, shipbuilding, and the establishment of a Northern Sea route as well as establishing appropriate working groups focused on these areas (Office of the President of Russia, 2017). Given the lack of a direct geographic connection between the ROK and Russia and the continued division of the Korean Peninsula, maritime infrastructure is critical for prospects of ROK–Russia cooperation. President Moon has stated that the “nine bridges” initiative cannot succeed without Russia–South Korea joint participation in areas such as the free port of Vladivostok, as well as in developing rail connections between Russia and South Korea via North Korean territory.

Among the possible areas of cooperation between the ROK and Russia, energy is one of the most important facet of the ROK’s visions for collaboration with Russia, given that Seoul perceives that Russia can serve a key role in the ROK’s energy needs. Having continuous access to energy sources, particularly gas, is crucial for South Korea’s sustained economic development. Among the advantages Russia offers are its geographic proximity to the ROK, meaning that natural gas, with which Russia is richly endowed, could be brought into South Korea via pipeline, thus serving as a more economical choice for the ROK’s energy needs than liquefied gas that South Korea currently imports via sea routes (Vartanyan, 2016). Among Moon Jae-in’s goals is the creation of an “energy and natural resources belt” that extends across the Korean Peninsula’s East Sea coastline up into Russia (Kang, 2018). Furthermore, Russia stands to benefit not only from being able to ship its own products to external markets via this North Korean port, but Russia is also positioned to act as a bridge between the Korean Peninsula and other Asian markets. Mongolia and North Korea, for example, have discussed the possibility of constructing a rail line traversing Russian territory to connect the two countries (Burayev & Krupennikova, 2013), which bodes well with South Korea’s inclusion of Mongolia in its New Northern Policy.

Pyongyang in the middle: Russian and South Korean outreach to the DPRK

The New Northern Policy cannot succeed without the participation of the DPRK, namely, because the northern half of the Korean Peninsula is what geographically separates the ROK and Russian territory. The New Northern Policy coincides with the Moon Jae-in government’s diplomatic outreach to Pyongyang as well as Russian attempts in recent years to shore up ties with North Korea. In addition to engaging in negotiations with Pyongyang over the North Korean nuclear program, the Moon Jae-in administration’s goals for developing ties with the DPRK include the joint use of natural resources on the Korean Peninsula (Y.-C. Kim, 2018). As for Moscow’s relations with Pyongyang, since 2012, North Korea has been interested in cooperating with Russia over economic development, which bodes well with Russia’s pursuit of economic partnerships—as opposed to military alliances—with East Asian states (Heo, Yu, & Shim, 2012). North Korea labeled 2015 to be a “Year of Friendship” with the Russian Federation, during which time the DPRK and Russia implemented mechanisms aimed at facilitating trade, including a North Korea–Russia business council. Attesting to the effects of Russian government restructuring in its “turn to the East,” the Ministry of Far Eastern Development has been particularly instrumental in fostering the Russian Federation’s relations with the DPRK (Troyakova, 2016).

As Moscow and South Korea have reached out to the DPRK on their own respective terms, interest in implementing trilateral cooperation between the three states has grown. The Kremlin, for its part has consistently promoted economic cooperation with the DPRK (Park, 2016b), although the specter of instability on the Korean Peninsula has made Russia wary pursuing large-scale projects with the DPRK (Weitz, 2010). Upon his arrival in Moscow as a special envoy to Vladimir Putin shortly after Moon’s election in mid-2017, Song Young-gil declared that Seoul was interested in reviving attempts at trilateral cooperation with North Korea and Russia (MK News, 2017). Furthermore, despite the difficulties the North Korean nuclear crisis presents, Moon has encouraged South Korean companies to start cooperating with Russian firms with an aim to strengthen trilateral collaboration between the DPRK, Russia, and South Korea (D. Kim, 2017).

Moscow and Seoul’s bid to push for trilateral economic cooperation between North Korea, Russia, and South Korea became particularly strong in 2018. A month after Russian foreign minister Sergei Lavrov met Kim Jong Un in Pyongyang in May of that year, Moon Jae-in traveled to Moscow for a summit with Vladimir Putin, where the two sides discussed three-way commercial collaboration. Putin had hoped to get Kim Jong Un and Moon Jae-in to attend the Eastern Economic Forum in September that year, although neither one of the Korean leaders was present. At the 2018 Eastern Economic Forum, former DPRK ambassador to Moscow and current North Korean Minister of External Economic Relations Kim Yong Jae represented Pyongyang, while ROK prime minister Lee Nak-yeon represented South Korea. There, Vladimir Putin iterated his hope for trilateral economic cooperation, but insisted that cooperation was not possible until tensions on the Korean Peninsula subsided (RIA Novosti, 2018). Indeed, the Korean security crisis, directly related to North Korea’s WMD program, has complicated both Russian and South Korean interests, with the Kremlin complaining that the division of the Korean Peninsulas frustrates Russian economic interests (Weitz, 2010). Likewise, although Kim Dae-jung and Roh Moo-hyun had moved to strengthen the ROK’s ties with Russia, the North Korean nuclear crisis that began in 2002–2003 has complicated Seoul’s efforts at northern-oriented diplomacy (Shin, 2018). Complicating matters further, particular to the DPRK’s own political system, economic reforms that otherwise may be necessary for greater integration between North Korea and other countries run the risk of causing internal instability making the Kim Jong-un regime averse to implementing necessary reforms (Seo, 2013).

Challenges to the pursuit of security via trade in the New Northern Policy

Hurdles to Russia–South Korea economic cooperation under the New Northern Policy stem from both issues related to traditional, interstate security as well as from internal economic conditions within the Russian Federation’s Far Eastern regions. In addition to the perpetual risk of conflict and instability that has caused Russian investors to shy away from sinking large amounts of money into North Korea, cooperation between any dyad of states involving North Korea (i.e., DPRK–ROK or North Korea–Russia) immediately runs up against the issue of sanctions, which have been put in place in response to DPRK provocations. States trading with North Korea run the risk of violating either UN sanctions or unilateral sanctions from countries such as the United States. To be sure, Russian entities have been at the receiving end of Washington’s wrath for their dealings with North Korea, as the US Treasury Department has blacklisted a number of companies it has accused of illegally engaging with the DPRK, in particular, logistics-oriented firms such as Primorye Maritime Logistics and Gudzon Shipping. Seoul, for its part, has been cautious about pursuing joint projects with the DPRK for fear of retaliatory measures from Washington, while also occasionally being forced to act against Russian entities in the name of complying with American sanctions. A case-in-point is the detention, in late 2018 of the Sevastopol, a vessel owned by Gudzon Shipping, by South Korean authorities, which prompted the Russian government to lodge a protest with the ROK’s ambassador in Moscow.

The Kremlin has long remained opposed to laying sanctions against Pyongyang, although Moscow has still continued to assent to sanctions at the UN Security Council, possibly as a way of maintaining an image of being a responsible player among the other powerful states involved in the Korean security standoff (Gabuev, 2017). Nevertheless, particularly since 2018, the Russian government has called for a reduction in the sanctions laid against the DPRK. Senior Russian lawmaker Valentina Matvienko, who had met with Kim Jong Un to celebrate the 70th anniversary of Moscow-Pyongyang ties, claimed that Kim Jong Un desired Russian help in mitigating the negative effects of sanctions (Tass.com, 2017). Several months later, senior Russian policy officials insisted that the time had come to lessen economic restrictions against the DPRK, as Pyongyang had not engaged in either nuclear tests or ballistic missile tests for the better part of 2 years. Furthermore, Georgy Toloraya, a former diplomat and expert on Korean affairs, has warned that in addition to the difficulties American unilateral sanctions have placed on trilateral cooperation between the two Koreas and Russia, additional sanctions could undermine not only Moscow’s ties with North Korea but with the ROK as well (Toloraya, 2018). Vladimir Putin himself mentioned this to Moon Jae-in in December 2018, to which Moon replied that if sanctions are to be drawn down, the Kremlin should use what leverage it has to push for the DPRK’s denuclearization (Regnum.ru, 2018), underscoring how the discrepancy in states’ views on sanctions could complicate economic cooperation, insofar as Russia and South Korea were still not in alignment over sanctions.

The mitigation of tensions on the Korean Peninsula, to the point where the relevant parties of the security crisis perceive the time is right to reduce sanctions, is nevertheless not sufficient for the realization of Moscow and Seoul’s shared vision of using commerce as a means of fostering peace. Russia’s own economic security situation presents its own unique stumbling blocks to the success of the New Northern Policy. Indeed, the Russian Far East remains the geographic entry point for South Korea’s deeper penetration into Russia’s economy. South Korean government organs such as the Korea Trade-Investment Promotion Corporation (KOTRA) have promised to assist South Korean firms that wish to invest or pursue projects in the Russian Far East (Rossiyskaya Gazeta, 2017b). Nevertheless, in spite of both the high degree of policy alignment between Seoul and Moscow, as well as the latter’s efforts at developing the Russian Far East’s preparedness to participate in the wider economic life of the Asia-Pacific, conditions in the Russian Far East continue to present challenges for cooperation with the Russian Federation’s Asian partners. Compared with other regions of Russia, the Far East has defied general negative trends vis-à-vis foreign direct investment. Among the reasons for international interest in the Russian Far East is Moscow’s initiatives deliberately being undertaken to develop the region (Levchenko & Khablak, 2016). Particular to Russia–South Korea cooperation, among all of the Russian Far East’s territories, Primorye Province has been the largest recipient of South Korean foreign direct investment (Levintal, 2013). Russia, however, has struggled to attract South Korean investment in its Far Eastern territories in recent years (Levintal, 2013).

Principal among the challenges Russia faces in attracting South Korean investment is the state of regional infrastructure and unfavorable logistical conditions within this particular region of Russia. One such case is the poor condition of automobile roadways and the insufficient state of connectivity of ports to the interior of the county remain major obstacles to external investment (Levintal, 2013). In light of South Korea’s goal to increase its economic integration across the Eurasian landmass via Russian territory, if the state of infrastructure within Russia is inadequate, then the ROK’s wider goals of commercial integration cannot be met in the way Seoul has aspired. The Russian government faces significant hurdles in its attempt to ease the flow of goods through Russian territory, including limitations on the budget amounts available for investment in infrastructure, as well as the risk that existing transportation routes could be overwhelmed by an increase in traffic without new rail lines or roads to alleviate them (Bezrukov, 2016). Indeed, the lack of adequate maritime port infrastructure—in contrast to Russia’s relatively well-connected transit links in the western part of the country—have been part of the reason why the majority of Russian exports go to Europe. This includes natural resources found in regions such as Siberia. The Russian Federation has been a supplier of coal to South Korea, yet much of the ROK’s coal supplies come from Australia and Indonesia, which are significantly farther from the Korean Peninsula than Russia is (Bezrukov, 2016). Concurrently, the construction of infrastructure must be oriented toward more than just raw materials exports, which is unsustainable as a way of boosting Russian economic health given the volatility of global prices (Tsvetkov, Zoidov, & Medkov, 2012).

The continuous division of the Korean Peninsula means that South Korea’s geographic access to Russian territory is largely limited to the Rason-Khasan region. Indeed, for South Korea, the port of Rason holds great geopolitical value. By connecting to it, South Korea can secure access to Eurasian markets via Russian territory, while securing a flow of natural resources from Russia (S. Lee, 2015). Moon Jae-in has also noted the importance of cooperation with the Russian Federation at Rason-Khasan, which has been made more possible with the recent thaw in inter-Korean relations (Seo & Han, 2018). Rason’s geopolitical significance notwithstanding, the zone is not ready to sustain large-scale economic activity that would likely take place under a system of ROK–Russia cooperation as envisioned in the “New Northern Policy.” This is in no small part due to the lack of official investment in either time or resources from Moscow aimed at strengthening Rason’s position as a hub of cooperation between the Russian Federation and other states in Northeast Asia. Underscoring this reality are cases such as the faltering of transportation and infrastructure projects like Primorye-2, a transport corridor aimed at connecting the Russian Far East with China. Until the Russian government signed a memorandum of understanding with China in 2017, followed by a maritime transportation test run in April of 2018, the Primorye-2 transit corridor project stalled due to issues such as a lack of political will in Moscow, as well as fears of conflict that could increase the risks attached to investment, especially in the case of armed conflict or instability in Korea (Vashchuk & Konyakhina, 2016). Furthermore, a continuing state of dissonance between Moscow and the Russian Far East (in spite of aforementioned official efforts at focusing government attention to the region), has in part undermined the Greater Tumen Initiative (Park, 2016a), an UN-supported economic security mechanism involving the governments of China, Mongolia, Russia, and South Korea.

Conclusion

The Korean Peninsula has consistently held an important place for Russia’s ambitions to integrate its economy with the Asia-Pacific, and factors into Moscow’s goal of developing the Russian Far East. The Kremlin has, both as part of its “turn to the East” as well as in its post–Cold War foreign policy overall, taken steps to strengthen its bilateral ties with South Korea. From the ROK’s side of the Russia–South Korea relationship, recent South Korean administrations have recognized the important role the Russian Federation plays in South Korea’s broader economic vision. As recent international relations literature demonstrates, particularly in the Asia-Pacific, there has been an increasing melding of economic and security considerations in regional integration initiatives. For the New Northern Policy, security is not simply a possible by-product but is an integral part of Seoul’s vision for cooperation with Russia. At present, there is a great deal of policy compatibility between Moscow and Seoul in terms of economic cooperation. Furthermore, both Moscow and Seoul have been developing their ties with the DPRK, further facilitating the possibility of trilateral cooperation between North Korea, the Russian Federation, and South Korea, which is essential to the success of the New Northern Policy.

For the Russian Federation and South Korea, however, plans for augmented economic collaboration as a means of contributing to peace and security on the Korean Peninsula continue to face significant hurdles. Conditions such as the continued division of the Korean Peninsula as well as the perpetuation of international sanctions complicate interstate cooperation. Furthermore, economic conditions in the Russian Far East are not conducive to implementing a multilateral economic framework. The ROK, for its part, brings vast investment potential to Russia’s Far East. Yet given the risky environment in Russia for South Korean investors, particularly in light of the poor state of connectivity—within the Russian Far East and between the Russian Far East and the rest of East Asia—the ROK will be hard pressed to spend resources or otherwise take steps to participate in cooperative economic activities with Russia.

Removing the barriers to cooperation between Russia and South Korea related to North Korea itself will require major changes in the traditional, military-oriented security situation on the Korean Peninsula. Such shifts will necessitate the participation of several states involved, whether involving the removal of American troops from the ROK or reducing the DPRK’s missile and nuclear capabilities. The latter in particular is directly tied to the very punitive sanctions that perpetuate North Korea’s economic isolation, thus frustrating a critical geographic link between the ROK and Russia. As for the situation within the Russian Federation itself, Moscow has shown a great deal of diligence in attending to the Russian Far East. Much work remains, however, for the Russian government to increase the Russian Far East’s viability in the context of cooperating with South Korea the “New Northern Policy.” Should the Kremlin wish to continue collaborating with the ROK under the latter’s “New Northern Policy,” the onus is on Moscow to utilize its recent policy developments to ensure that South Korean participation in the economic life of the Russian Far East carries a favorable cost-benefit ratio for Seoul.

Footnotes

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Author biography

Anthony V. Rinna is a senior editor with the Sino-NK research organization. His research focuses on geopolitical and security issues related to the Korean Peninsula and the Russian Far East. He has lived in South Korea since 2014.

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