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Russian-North Korean relations are in phase of renaissance

June 05, 2014, 17:48 UTC+3 Alexandrova Lyudmila
© ITAR-TASS/Boris Kavashkin

MOSCOW, June 05./ITAR-TASS/. Economic relations between Russia and the Democratic People’s Republic of Korea have reached a new level, as the two countries are getting over to transactions in the Russian rubles following the write-off of a bulk of North Korean debts. Also, they have reached progress in discussing large trilateral projects with South Korea and their bilateral trade is expected to increase fivefold over the short term.

Cooperation between Russia and North Korea began to develop a long time ago but Western sanctions against Moscow added fuel to the process, experts say.

In the course of a meeting of the intergovernmental commission for collaboration in trade, science and technology, an agreement was reached on launching transactions in rubles before the end of this month. Russia’s Minister for the Far East, Alexander Galushka, told reporters about the contents of the agreements the two sides had reached, saying the opportunity for a timely effectuation of transactions would facilitate bilateral cooperation.

Russia and North Korea also pondered the prospects for trilateral projects involving South Korean corporations, with the project for development of railway communications standing out among others. An integrated railway line linking South Korea, North Korea and Russia’s Trans-Siberian Railroad is destined to become an element of a huge transport bridge between the South Korean port of Busan and Western Europe. A 55-kilometers-long line linking the North Korean port of Rajin with the Russian border has already been built.

“It’s important to extend the Trans-Siberian railroad to the Korean Peninsula, as it (the railway communications) will help bring more stability to the region and improve the situation in general,” Alexander Galushka said.

Another important project is being designed by Gazprom. It envisions construction of a natural gas pipeline via the North Korean territory to enable the Russian corporation to deliver gas to South Korea.

Progress in trade between Moscow and Pyongyang took an outline in April 2014 after Russia had written off virtually the entire North Korean debt dating back to the Soviet era. Of the total sum of $ 11 billion, Moscow pardoned $ 10 billion and pledged to reinvest $ 1 billion into new projects.

Talks on rescheduling of the debt had lasted for almost twenty years.

Minister Galushka said the Russian and North Korean authorities hoped to increase bilateral trade to $ 500 million shortly versus the $ 112 million upon the end of 2013. In the future, the two governments hope to bring it to around $ 1 billion.

The sides also agreed that North Korea would have an opportunity to pay to Russian companies by offering them the access to their deposits of natural resources.

Also, North Korean officials promised to slash the number of formalities for the issuance of multiple-entry visas to business executives and representatives of Russian corporations operating in their country, as well as to open the access to mobile telephony and the Internet for them.

North Korea, on its part, does not conceal its interest and it does not make any secret of it, Dr. Alexander Vorontsov, the chief of the Korea and Mongolia studies department at the Institute of Oriental Studies reporting to the Russian Academy of Sciences told ITAR-TASS. He recalled that, in spite of difference in ideological outlooks, the two countries had always quite friendly relations.

Pyongyang is heavily dependent on assistance from and trade with China and it is displeased with the situation for quite some time. On the face of it, ties with Russia might give a proper impetus to the country’s economy, as well as to scale down Chinese influence on it.

“China’s predominant presence in the North Korean economy makes Pyongyang feel apprehensive,” Dr. Vorontsov said. “It needs a counterbalance to Chinese influence.”

The past few months have seen genuine renaissance in Russian-South Korean relations. It was made manifest in the visits to Pyongyang by a number of high-rank Russian officials, the debt write-off, and completion of a knotty reconstruction of the railway to Rajin, a part of which was built anew.

Dr. Vorontsov said the Russian and North Korean governments attach significance to trilateral projects involving South Korea. Specifically, there are three large infrastructure projects - the railway, the gas pipeline and construction of a power grid.

“They (these projects) embrace both Korean states and work towards resumption of the inter-Korean dialogue,” Dr. Vorontsov believes. “This is an important political component of the projects because the inter-Korean relations leave much to be desired at present.”

He explains for the renaissance of Russian-North Korean relations by a combination of a range of factors. “The projects were drafted over decades and preparations for the visits were done well in advance but the crisis in Ukraine and Western sanctions (against Russia) imparted a new impulse to finalization of the existing plans.

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