Russia and North Korea signed an agreement to settle the debt of $11 billion. 90 percent of the debt is forgiven, and the remaining amount will be used in exchange for aid. Russia made it clear that it was ready for partnership. But will the courage of Moscow return North Korea into the ranks of the allies?
The DPRK debts stem from the loans granted by the former Soviet Union, said Deputy Finance Minister of Russia Sergei Storchak. Russia wrote off 90 percent of the debt, the remaining $1.1 billion will be invested in joint projects in education, healthcare and energy sectors. This is a rather large amount, so why has the Russian government made such a clearly political move when it is obvious that the debt will not be paid back?
For North Korea, because of its model of government, Russia has always been the most acceptable among the unacceptable partners. This is indicated by at least three visits of Kim Jong Il to Russia. But so far the agreements reached on construction of the transit gas pipeline, railway and power lines in South Korea remained on paper. In addition, Russia as part of its participation in the six-party talks on North Korea's nuclear program has always supported the toughest Western sanctions against it, leading to its isolation, hunger and dangerous prospects.
It seems that finally the Russian government has changed its point of view with regard to "the North Korean issue" inspired by the West. Of course, it was helped by the change in leadership and the rise to power of Kim Jong-un, who in eight months has proven his ability to govern the state and his readiness to change. Clearly, the question will now be seen not only from the point of view of using the DPRK for energy transit to South Korea, but also cooperating with it as a possible geopolitical partner.
North Korea gets a clear benefit from the recovery of the Russian presence. This, in effect, means the destruction of the economic blockade, the removal of unilateral energy dependence on China, and increase of the budget by at least $500 million a year in transit fees alone. Not only that, at the recent APEC summit in Vladivostok President Vladimir Putin has secured support of the president of South Korea in the implementation of the ambitious plans for the construction of infrastructure. Therefore, it is a three-way partnership.
In the meantime, the trade between Russia and North Korea is very small, even by the meager standards of the latter. Over the last 15 years the Russian-North Korean trade has fluctuated around 100 - 250 million, whereas, over the same period, the volume of Chinese-North Korean trade increased nearly ten-fold in the last year, to 5.6 billion dollars. Yet, the prospects are good. Suffice to say that Russia has a common border with the DPRK and the long history of relations. It was the Soviet Union in 1945 that initiated the establishment of the North Korean state, and for a long time, the countries were allies.
However, some experts do not think so. For example, Andrei Lankov, Associate Professor of the History Department of the University Kunming in Seoul, believes that today Russia's foreign policy is pragmatic and Russia is not going to spend money on such "vague goals" as the prestige and political influence search outside the former Soviet Union. In addition, the new leader Kim Jong-un is unlikely to be able to keep the country in his hands, it would join South Korea under a revolutionary scenario, so it is dangerous to invest money there and private Russian investors would not invest, said Lankov.
However, the facts suggest otherwise. After coming to power of the "new" Putin, the initiator of the EurAsEC "from Lisbon to Beijing" (how is that for the prestige and ideology?) Russia began relying on the Far East and cooperation with the countries of East Asia. The latest summit AZES in Vladivostok was a clear confirmation of that. $20 billion spent to "overhaul" Vladivostok show that Russia has money and will develop the region with ambitious intentions. It is the state, not private investors, who determines the policy of the largest energy companies "Gazprom", "Rosneft", and RAO UES.
In addition, the concerns about the young Kim Jong-un are rather groundless. After the removal of the second person in the state, the influential "hawk", the DPRK army commander Ri Yong Ho, the President has shown that he completed the consolidation of power in a very short time without any hindrance and is heading for cautious economic reforms while preserving the state strategy of survival. He has already introduced requisitioning, promising farmers to take only 70% of the crop. This means that a revolution from above is not expected, and the people accustomed to obey will not have a revolution from below.
North Korea's political system can continue to offer the community a new social and ideological project and continue to exist at a new level. For Russia, this would be the ideal scenario.
Therefore, Russia must follow the initiative of China that is already creating a free economic zone on the border with North Korea, and establish relations on a new basis. North Koreans have long been working in Siberia and the Far East, and in contrast to other immigrants - from the CIS and China - legally. Why not increase their quota, which currently is at around 20 thousand people? Incidentally, they are considered the best workers in the region and are ready to work for ridiculously low wages.
The myth of the North Korean nuclear threat, which is nothing but a "double" of the Iraqi chemical threat that led to the overthrow of Saddam Hussein, must be dispelled. If there is a bomb in North Korea, it is no more dangerous than the Israeli one. When the threat is removed, the Russian government will have an extra argument against the deployment of the U.S. missile defense in Europe. If this does not become an argument, Russia might think about its military base in North Korea.
Germany continues the discussion about the completion and commissioning of the Nord Stream 2 gas pipeline. For the time being, it is too early to ascertain that the opponents of the project are gaining the upper hand