THE RUSSIAN ROLE IN CONSTRUCTING A SOUTH-NORTH KOREAN ECONOMIC COMMUNITY
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Expansion of South-North Korean economic cooperation would give an opportunity for Russia to increase trade, investment and technological exchanges with Korea. Because Russia has already constructed about 70 large factories and power stations in North Korea, it would be possible for Russia to take part in the modernization of North Korean industry and infrastructure. Also, a South-North Korean Economic Community would have more opportunities to take part in the development and reconstruction of the Russian Far East. Human resources from the North and highly-skilled management from the South, financial resources from East Asia, Russia’s mineral resources and high technology could be successfully combined in a cooperative effort that would be fruitful for all participants. The process of the establishment and improvement of an institutional framework for inter-Korean relations could develop successfully if both sides are involved in the process of preparing and establishing the essential institutional arrangements. On a large scale this process depends on North Korea’ transition to a market economy. However, Pyongyang is still afraid that every radical transition towards a market economy, including the establishment of domestic market institutions, could undermine political and ideological stability in the North. Thus, institutional arrangements stimulating inter-Korean cooperation are expected to be introduced very slowly. The modernization process of North Korean infrastructure may be the first real step to the establishment of a South-North Korean Economic Community. As both the ROK and DPRK are interested in a stable supply of energy, oil and gas, timber, sea products and other raw materials, as well as technology from Russia, this triangular cooperation has a good chance of stimulating inter-Korean exchange positively. One of the most important principles of inter-Korean as well as multinational economic cooperation on the Korean peninsula may be gradualism. One of the main obstacles to direct inter-Korean cooperation is the lack of mutual confidence. Under these conditions other countries, including Russia, could support inter-Korean economic exchanges. It is necessary to note that Russian foreign policy will follow a more pragmatic course. Russia is interested in developing North Korea’s infrastructure and has a real opportunity to participate in these international projects.
Abstract
Expansion of South-North Korean economic cooperation would give an opportunity for Russia to increase trade, investment and technological exchanges with Korea. Because Russia has already constructed about 70 large factories and power stations in North Korea, it would be possible for Russia to take part in the modernization of North Korean industry and infrastructure. Also, a South-North Korean Economic Community would have more opportunities to take part in the development and reconstruction of the Russian Far East. Human resources from the North and highly-skilled management from the South, financial resources from East Asia, Russia’s mineral resources and high technology could be successfully combined in a cooperative effort that would be fruitful for all participants. The process of the establishment and improvement of an institutional framework for inter-Korean relations could develop successfully if both sides are involved in the process of preparing and establishing the essential institutional arrangements. On a large scale this process depends on North Korea’ transition to a market economy. However, Pyongyang is still afraid that every radical transition towards a market economy, including the establishment of domestic market institutions, could undermine political and ideological stability in the North. Thus, institutional arrangements stimulating inter-Korean cooperation are expected to be introduced very slowly. The modernization process of North Korean infrastructure may be the first real step to the establishment of a South-North Korean Economic Community. As both the ROK and DPRK are interested in a stable supply of energy, oil and gas, timber, sea products and other raw materials, as well as technology from Russia, this triangular cooperation has a good chance of stimulating inter-Korean exchange positively. One of the most important principles of inter-Korean as well as multinational economic cooperation on the Korean peninsula may be gradualism. One of the main obstacles to direct inter-Korean cooperation is the lack of mutual confidence. Under these conditions other countries, including Russia, could support inter-Korean economic exchanges. It is necessary to note that Russian foreign policy will follow a more pragmatic course. Russia is interested in developing North Korea’s infrastructure and has a real opportunity to participate in these international projects.