Why Russia Is Still Playing Second Fiddle in Korean Geopolitics

The leaders of the two Koreas not attending the forum in Vladivostok indicates that Russia is not among the most influential players on the Korean Peninsula, which, in addition to both Korean states, include only the US and China.

Just a month ago it looked very likely that the leaders of North and South Korea, Kim Jong-un and Moon Jae-in, respectively, would come to Vladivostok for the Eastern Economic Forum (EEF) on September 11-13. If this happened, then, given the already confirmed visits by Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe, Russia would host the first ever multilateral summit with the key Northeast Asian countries. Unfortunately, it has now become clear that this mega-event is unlikely to happen. Instead of Vladivostok, Kim and Moon will be in Pyongyang for an inter-Korean summit on September 12-13.

The leaders of the two Koreas not attending this forum indicates that Russia is not among the most influential players on the Korean Peninsula, which, in addition to both Korean states, include only the US and China. Over the past several months, Kim Jong-un had three meetings with Xi Jinping (all of them in China), two with Moon, and one with Trump. Moscow and Pyongyang have stated their plans to hold a Putin-Kim summit before the end of the year, but it remains unknown where and when it will take place.

There are two main reasons behind Russia remaining on the periphery of the geopolitical games unfolding around the Korean Peninsula. First, Moscow's diplomatic resources remain focused on Europe and the Middle East more recently while East Asia, perhaps, with the exception of China, remains secondary in Russia’s foreign policy.

Second, there is the impression that Russian diplomacy tends to follow in the wake of China when it comes to North Korean matters. Importantly, Moscow has in fact delegated to Beijing the authority to negotiate with the United States on international sanctions on North Korea, which are then unanimously adopted by the UN Security Council. As a result of increasingly stringent sanctions, especially those imposed by the Security Council since the second half of 2017, the DPRK has found itself in an economic blockade, where its major export items have been outlawed. It has been cut off from the international financial system and the supply of a number of essential civilian goods, including oil, machinery and equipment, have come under major restrictions. This gave rise to a cognitive dissonance where Moscow never stops to insist that it is impossible to resolve the nuclear issue on the Korean Peninsula with sanctions and that sanctions should not aggravate the humanitarian situation in North Korea, but at the same time it voted for the US-China draft resolutions which actually seek to strangle the DPRK economy.

Undoubtedly, Russia must closely coordinate its steps on the Korean Peninsula with its main strategic partner – China – recognizing the fact that, for China, Korea is almost as important as Ukraine is for Russia. This, however, does not mean that Moscow should abandon its independent and meaningful political role in Korean affairs.

Megaprojects on the Korean Peninsula

Russia is unlikely to become a major political player on the Korean Peninsula without the necessary economic influence. For almost two decades now, three groups of major economic projects on the Korean Peninsula have been discussed, in which Russia is assigned the role of a major participant.

First is a gas pipeline project from Russia to South Korea via the DPRK. Even though Gazprom has recently resumed talks with South Korea on pipeline gas distribution, the prospects for this project appear bleak. Gazprom is not eager to finance an expensive pipeline across North Korea, especially given the remaining political risk on the peninsula. Gazprom’s main pipeline priority in Asia is not the Trans-Korean project, but the Power of Siberia pipeline to China. In addition, it is not entirely clear how much South Korea needs Russian gas. The gas infrastructure of South Korea (as well as Japan) is geared toward liquefied natural gas (LNG). Under these circumstances, preference may be given to Russian LNG supplies from Sakhalin to Korean consumers (which are already underway), as well as from new Arctic projects. Thus, the Korean gas corporation KOGAS is showing an increased interest in participating in the construction of NOVATEK’s LNG transhipment terminal in Kamchatka.

The second group of projects is related to Russian electricity exports to the Korean Peninsula, partly through the future energy super ring in Northeast Asia. So far, this has just been a nice idea. Creating an integrated community in such a sensitive area as the electricity industry requires close and trust-based political relations between potential participants, which is not the case in Northeast Asia. In addition, there are doubts that the Koreans (both south and north) will be willing to buy large quantities of electricity from Russia. Power generating is a high-tech process with high markup, so industrialized countries try to produce as much of their own electricity as they can. This may be why a major project to distribute Russian electricity to China has not materialized for many years now. Some power is being sent to China across the Amur River, but not much.

The third group of projects that are related to transport looks most promising and feasible. The main effort is to connect the Trans-Korean Railway to the Russian Trans-Siberian Railway. For South Korea, who will bear the brunt of expenses associated with these projects, the reconnecting of railways in South Korea and North Korea has, first, an important symbolic value as the beginning of an actual reunification of the nation, and, second, will open a direct corridor to Eurasia. Connecting the transport infrastructure of the north and the south, as provided for in the Panmunjom Declaration adopted on April 27 following the inter-Korean summit, was designated as a priority area of ​​practical cooperation. The project is already underway. Importantly, several years ago, Russia invested about $300 million into renovating the railway from the Russian station Khasan to the North Korean port of Rajin which is part of the Korean Peninsula-Eurasia transport integration project.

Cooperation is possible under sanctions as well

All of the above projects can be implemented only after lifting or significantly mitigating current international sanctions on the DPRK. The same applies to full-fledged bilateral trade and economic cooperation between Russia and North Korea which remains extremely encumbered by the sanctions for which Russia itself voted in 2016 and 2017. As a result, not only the North Korean, but also the Russian economy was damaged. So, according to some estimates, about a third of the construction workers in the Primorsky Territory are the DPRK nationals. Following the ban on importing North Korean labor, there’s no one who could replace them. Moscow's support at the UN Security Council of the stifling sanctions against the DPRK initiated by Washington looked all the more strange as Russia has been itself an object of tightening US sanctions for several years now.

As a permanent UNSC member, Russia is interested in maintaining the high standing of this body and, for that reason alone, should comply with sanctions resolutions on the DPRK until they are canceled or altered by a Security Council resolution. However, just like any other legal document, the UN resolutions leave some room for interpretation. Russia does not have to adhere to absolutist interpretations of the sanctions as required by the US and its allies. Participating in the UN sanctions regime, Russia must take into account its political and economic interests, as well as be guided by humanitarian considerations. A number of projects between Russia and North Korea may well be implemented without violating the UN Security Council resolutions, such as the construction of a road bridge between Russia and the DPRK across the border Tuman (Tumangan) River. Efforts should also be made to resume regular ferry service between Vladivostok and Rajin, which was launched in the spring of 2017, but was soon suspended largely because the ferry service failed to receive the necessary support from the government agencies and port authorities.

In the financial sphere, Russia and the DPRK fully feel the consequences of the monopoly status of the dollar, which is increasingly being used as a tool to punish the states that Washington deems objectionable. Why not, then, create a Russian-North Korean working group at the expert level, to begin with, who could consider alternative mutual settlement methods. Perhaps, cryptocurrencies could be an alternative. As is known, North Korea boasts a high level of development of a number of IT technologies and, perhaps, Russia and North Korea could establish a partnership here to be later joined by other countries that are not happy with the undivided dominance of the dollar.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.