Russia's Korea projects gather
dust By Stephen Blank
In August 2011, Russia signed what
appeared to be a momentous agreement with North
Korea (Democratic People's Republic of Korea -
DPRK), an accord that marked Kim Jong-il's last
great foreign policy accomplishment.
North
Korea's Supreme Leader's last major foreign policy
initiative was the August summit in Moscow, where
he announced his willingness to resume his
country's participation in six-party talks on
giving up nuclear weapons without preconditions,
ie no preconditions for denuclearization and no
apologies, regrets, and so forth for the North's
2010 attacks on South Korean (Republic of Korea -
ROK) ships and territories.
He also
accepted Moscow's long-standing idea to discuss a
trans-Korean gas line that would begin in Siberia,
traverse the
DPRK to the ROK, and pay
North Korea US$100 million annually once the
pipeline opened in 2017.
Russia also
joined the DPRK in conducting joint naval search
and rescue operations, is discussing forgiving
North Korea's debt, and is also moving forward on
its century-long dream of a trans-Siberian -
trans-Korean railway (TSR-TKR). Yet, as of Kim's
death in December 2011, neither the railway nor
the pipeline is a done deal. Nor has there been
much progress in the 10 months since then in
moving these projects forward.
To be sure,
there are some inherent obstacles involved in
doing so. Indeed, negotiating a multi-national gas
pipeline, especially with such deeply entrenched
adversaries as the two Koreas, is by definition a
protracted process that can be reversed at any
time.
Second, the exigencies of domestic
consolidation seem to be the driving force in the
new North Korean regime's policies. This means
reshaping the governing coalition, discussing
economic policies at home, and in foreign policy:
discussions with or about China and the United
States, North Korea's principal interlocutors.
Nonetheless, Russia is still pushing this agenda
and has scored at least one objective, namely
writing off North Korea's debt, as discussed
below.
Russian Foreign Minister Sergei
Lavrov has admitted that North-South tensions on
the Korean peninsula present obstacles to
realizing tripartite projects such as the
projected gas pipeline. However, the pipeline
through North Korea to South Korea, a similar
power line, and the TSR-TKR projects are still on
the books, and negotiations continue.
Nevertheless, the political problems -
leaving aside the technical problems of building a
pipeline across the peninsula, agreeing on the
volumes of gas to be sent and the price - are
still considerable. As one Russian report pointed
out, the key obstacle is the absence of a legal
framework for this project because there is no
Russo-DPRK agreement on bilateral gas cooperation.
As a result, "all current planning is no more than
wishful thinking rather than concrete and
goal-oriented steps waiting to be taken as soon as
commercial terms are agreed on".
As this
report also points out, there is no bilateral
accord between Pyongyang and Moscow. Moreover, no
accord on gas cooperation, let alone much of
anything else, is currently being discussed by the
two Korean governments. And the absence of that
accord retards progress on key issues of technical
implementation, even if Russia is technically and
politically ready to move forward.
Third,
the author points out that because Moscow has no
leverage over Pyongyang, it cannot guarantee
either to North Korea or, perhaps more
importantly, to South Korea that energy deliveries
will be safe and secure. Given the other two
states' lack of influence upon North Korea,
Russian energy deliveries to South Korea can be
held hostage at any time North Korea wants to do
so.
These considerations preclude any
rapid movement to realizing this gas pipeline,
which is a key component of Russia's overall Asia
policy as well as its Korea policy (see here.
And this is true even though South Korean Finance
Minister Bahk Jae-wan recently proposed resuming
talks with Russia on a bilateral economic
agreement that would open the door to further
growth of those two states' bilateral trade and
economic relations.
On the other hand,
after protracted negotiations, Russia agreed to
forgive North Korea's US$11 billion debt, which in
any case Pyongyang could not pay back. According
to Deputy Finance Minister Sergei Storchak, Russia
applied classic terms of the Paris Club - ie
conversion of the debt into dollars at an
appropriate exchange rate, an initial discount and
the use of the balance of the debt for so called
"debt for aid operations".
Apart from
clearing up this problem and opening the door
partially to an uptick in Russian trade with North
Korea, Moscow's decision appears to be in line
with a more general policy of forgiving the debts
of poor countries like North Korea and also
Kyrgyzstan, which cannot, in any case, repay their
debts, in return for both enhanced investment and
trade operations, and in Kyrgyzstan's case, a
military base.
Nevertheless, Russia is
unlikely to get any kind of enhanced military
presence in North Korea, and any truly substantive
increase in economic presence awaits the DPRK's
economic reform, something we have yet to see.
Moreover, it is unlikely that China will not react
by trying to minimize any such Russian presence
and further enhance its already relatively large
presence in the North Korean economy.
Meanwhile, the six-party talks remain
deadlocked, and Moscow's policy of awarding
benefits like debt forgiveness to Pyongyang in
return for no discernible conditions has yet to
produce meaningful results or to move the gas
program, Moscow's key objective, forward.
Dr Stephen Blank is a professor
at the Strategic Studies Institute of the US Army
War College at Carlisle Barracks, PA. The views
expressed here do not represent those of the US
Army, Defense Department, or the US
Government.
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