Moscow and Pyongyang: From Disdain to Partnership?

A few weeks ago, the Foreign Ministry of the Democratic People’s Republic of Korea (DPRK) said that Moscow and Pyongyang planned to “deepen political, economic and military contacts and exchanges” this year. The two governments have recently launched new economic projects and partnerships to expand bilateral and regional transportation and investment. Last year, more senior North Korean leaders visited Russia than any other country. In the coming months, Russian President Vladimir Putin could become the first foreign leader to meet with Kim Jong-un, the reclusive leader of the DPRK, who Russia says has accepted Putin’s invitation to visit Moscow in May.

If Kim does come, it will mark the culmination of the growing, high-level interaction between the two governments. In February 2014, Kim Yong-nam, chairman of the Presidium of the DPRK’s Supreme People’s Assembly, attended the opening of the Olympic Games in Sochi. The next month, the Russian minister of Development for the Far East, Alexander Galushka, visited North Korea with Rustam Minnikhanov, the president of the Russian Republic of Tatarstan. From April 28-30, Deputy Prime Minister Yuri Trutnev, also the presidential envoy for the Far Eastern Federal District, spent three days in North Korea along with the governors of Russia’s far eastern provinces of Amursky, Khabarovsky and Primorsky. In September and October, Foreign Minister Ri Su-yong spent ten days in Moscow and in Russia’s Far East negotiating various economic deals, with a focus on the agricultural sector.

The most important visit occurred in November, when Choe Ryong-hae, ranking second or third in the DPRK Party hierarchy and a close aide to Kim, spent a week in Russia. He delivered a personal letter from Kim to Putin which asked for renewed aid and diplomatic support to keep the United Nations from passing a critical human rights resolution. For the first time, the text of the resolution advocated sending Kim and other DPRK leaders responsible for human rights atrocities to the International Criminal Court.

The Russian government has not resumed economic or military aid, but it did help block the human rights sanctions. Moscow has even supported Pyongyang against U.S. allegations that North Korea launched a cyber attack against Sony Pictures for producing The Interview. Russian officials and media joined their North Korean counterparts in denouncing the film’s depiction of a fictional assassination of Kim as needlessly provocative. When he received the new DPRK ambassador to Russia in November, Putin declared that, “A further deepening of political ties and trade and economic cooperation is definitely in the interests of the peoples of both countries and ensuring regional stability and security.” Both governments have discussed plans to reconstruct North Korea’s railroad network and connect it to Russia’s, build a natural gas pipeline and electricity power lines through the Korean Peninsula, and develop North Korea’s potentially extensive mineral riches.

Russia’s latest diplomatic initiative has been to invite Kim to Moscow to take part in the Victory Day celebrations marking the 70th anniversary of the defeat of Germany in World War II. Deputy Foreign Minister Igor Morgulov said such a would promote “peace on the Korean peninsula, as well as northeast Asia,” and “would be a logical continuation of a recently noticeably activated Russian-North Korean political dialogue [and] would contribute to the implementation of agreements reached by the parties in the economic field.”

By inviting Kim to Moscow, Russia also demonstrates that it retains considerable diplomatic influence despite Western efforts to isolate Russia over Ukraine. Through its engagement with Pyongyang, Moscow also gains leverage with Tokyo, as the Russian and Japanese foreign ministries have launched a wide-ranging dialogue on North Korea-related issues. Moreover, having Kim sit next to Putin will certainly help the Russian state media distract viewers from the likely absence of many Western leaders at the event, including U.S. President Barack Obama, who has already said he will not come. If South Korea’s President Park Geun-hye attends, Putin could even venture his hand at some high-profile personal diplomacy between the Korean leaders.

The Russian government’s recent drive to improve relations with North Korea was not unexpected. Even before the West imposed economic sanctions on Russia following Moscow’s March 2014 annexation of the Crimean Peninsula, the government had been striving to deepen Russia’s economic ties with Asia by shipping more energy eastward, joining regional institutions, and encouraging more Asian investment in Russia. Since Ukraine, Russians have redoubled their Asian Pivot, though thus far the main surge has occurred almost exclusively with China rather than Japan, South Korea, or the DPRK.

Moscow’s policies towards Korean issues have remained remarkably consistent during the past two decades. Russian policymakers are eager to normalize the security situation on the Korean Peninsula both for its own sake and to realize their own economic ambitions. Moscow’s goals include avoiding another major war on the Korean Peninsula; preventing DPRK provocations from prompting additional countries to obtain nuclear weapons or ballistic missiles; eliminating the DPRK’s nuclear program through positive incentives rather than punishments; encouraging all parties to fulfill their commitments; building transportation and energy corridors through the Korean Peninsula; and enhancing Moscow’s diplomatic presence in East Asia.

Consequences of Collapse

Still, at the end of the day, Russian strategists consider a nuclear-armed DPRK as only an indirect threat, since they do not see any reason why North Korea would attack Russia. Therefore, Russia is unwilling to incur major risks to force the North Koreans to renounce their nuclear weapons ambitions. Russian officials oppose strong sanctions that could precipitate North Korea’s collapse into a failed state. They seek to change Pyongyang’s behavior, but not its regime. Russia remains more concerned about the economic and security consequences of the DPRK’s collapse for Russia than Pyongyang’s intransigence and provocations.

Moscow’s ability to pursue its goals is constrained by its limited influence in the Koreas and the rest of East Asia. Russian officials constantly fear being shunted aside in the Korean peace and security dialogue, despite what they see as Moscow’s obvious interest in the results. Russian policymakers strive to maintain a high-profile in regional diplomatic efforts, including Moscow’s central role in the Six-Party Talks – a framework that, like the United Nations, substantiates Moscow’s claims to great power status in negotiating East Asian security issues. Russian policymakers have also sought – rather unsuccessfully over the past decade – to mediate Korean security disputes by playing up their country’s good relations with both Koreas.

Russian and U.S. leaders have cited their cooperation in managing the North Korean nuclear dispute as evidence that, despite their many differences, the two governments can continue to work together in solving important international security issues. But Russian government representatives have faulted the United States for impeding a resumption of the Six-Party Talks: “If the American side takes adequate steps and makes the effort, not just claims, to North Korea to meet one-sided requirements, we will definitely welcome it,” an anonymous Russian Foreign Ministry official told the media.

The DPRK has many minerals and other natural resources, but what Russian entrepreneurs most value about North Korea is its pivotal location between Russia and East Asia. They want to make the DPRK a transit country for Russian energy and economic exports to South Korea and other Asia-Pacific countries. Russian planners aspire to construct energy pipelines between Russia and South Korea across North Korean territory. They have also discussed building a trans-Korean railroad and linking it with Russia’s Trans-Siberian rail system. If realized, the new rail line would allow the shipment of goods between Europe and Korea to proceed three times faster than through the Suez Canal. Russians have also sought to use the DPRK’s ice free ports which, unlike Vladivostok, are accessible year-round. In addition to the economic benefits, Russian policymakers say that these projects would contribute to regional peace and security. However, the DPRK’s continuing alienation from the international community has severely slowed the progress of transnational projects involving its territory.

To jump-start these projects, in the first half of 2014 the Russian parliament and president approved the 2012 agreement to write off 90 percent of the DPRK’s $10.94 billion Soviet-era debt (valued as of September 2012). Russia agreed to allow North Korea to repay the remaining $1.09 billion in semiannual installments over the next twenty years, and use these payments to fund bilateral economic infrastructure projects.

Moreover, the Russian-DPRK joint venture to develop the Rajin port has so far completed the modernization of a pier and built a 34-mile railway connecting the facility to the Russian border. This project to develop a transshipment center for northeast Asia continues to attract interest among South Korean businesses, with the South Korean government even granting a waiver from the economic sanctions that were adopted after the 2010 provocations. Moreover, Russian energy officials and firms are evaluating various plans to transmit electricity from the Russian Far East to North or South Korea. The Russian and DPRK governments are pondering a megaproject in which Russia would spend $25 billion over 20 years to modernize North Korea’s dilapidated 3,000-km rail network in return for privileged access to North Korea’s mineral resources, whose value might exceed that cost by several orders of magnitude.

The prospects for Russian-DPRK military cooperation are less clear. In November, the vice chief of the DPRK’s Army General Staff, No Kwang-choi, travelled to Moscow with a North Korean leadership team. According to the Korean Central News Agency, No met with his Russian counterpart and, “Both sides had a wide-ranging exchange of views on putting the friendship and cooperation between the armies of the two countries on a new higher stage.” Last week, Valery Gerasimov, the chief of the General Staff of the Russian Armed Forces, said that the Russian and North Korean militaries would hold joint drills later this year.

The DPRK is especially eager to acquire new Russian warplanes to replace its aging Soviet-era planes. The North Koreans have reportedly notified Moscow that they want to obtain Russia’s top-of-the-line Su-35, but they might settle for Russian help in sustaining and modernizing the DPRK’s existing fleet of planes. Although international sanctions limit foreign military sales to North Korea, Russia might be able to provide spare parts under the guise of aiding North Korea’s civilian airliners.

To circumvent the Western sanctions imposed on both their economies, which make it difficult for them to use Western currencies and financial institutions, the Russian and DPRK governments agreed to use rubles for some transactions, thus facilitating the realization of their declared objective of raising two-way trade to $1 billion by 2020. The first ruble-based transaction occurred with agreements reached during the October 2014 meeting of the Russia-DPRK intergovernmental committee on commercial-economic relations.

Actually realizing all of these plans will remain a challenge. According to the latest data, Russia-DPRK trade remains low, with the first three quarters of 2014 seeing a slight decline compared to the first nine months in 2013. In contrast, North Korea’s trade dependence on China has reached record levels, with more than 90 percent of DPRK exports going to China in 2013. The volume of DPRK trade and investment with China is many times greater than with Russia. These figures are unlikely to change any time soon given the greater degree of compatibility between the Chinese and North Korean economies and the deep-rooted and long-standing PRC ties with North Korean economic activities.

Moreover, trying to reconstruct the DPRK rail network and build new trans-Korean railroads and pipelines could take decades and cost billions of dollars. The success of these projects would also require an unprecedented period of cooperative relations among the two Koreas and Russia. The same is true of Russian aspirations to establish an enduring commercial presence in Kaesong Industrial Complex or to boost bilateral commerce to $1 billion, some ten times current levels.

Russia could better achieve these goals if it departed from its post-Soviet insistence that all foreign economic intercourse proceed according to market principles and instead returned to the “friendship prices” of the high Soviet era of the 1960s and 1970s. Russian officials have so far refused to do this.

Other barriers to DPRK-Russian economic exchanges include the limited commercial experience and marketable skills of the North Korean workforce, widespread impoverishment that makes purchasing Russian consumables impossible for most North Korean consumers, and the country’s underdeveloped transportation, energy, and other infrastructure systems.

Most likely, Russia will use any renewed commercial presence in the DPRK less as a revenue source and more as a foundation to expand Russia’s economic ties with more valuable East Asian partners. Conversely, as in the case with Iran, Russian planners may calculate that they need to establish some kind of robust economic foothold now, in case North Korea should later reconcile with the West and embrace South Korea, Japan, and other new economic partners.

Influence

In terms of the broader implications of the recent Russia-DPRK reconciliation, Moscow might gain more influence in the stalled Six-Party Talks and thus push to resume negotiations or alternatively play a spoiler role and punish the United States and Japan for imposing sanctions on Russia. Indeed, Russian government officials have recently warned that they might break with Washington on the nuclear talks regarding North Korea and Iran due to U.S. sanctions. While Moscow has thus far eschewed such disruptive actions, the tensions between Russia and the U.S. over Ukraine and other issues have likely already made Pyongyang bolder in resisting its nuclear disarmament.

Although it is unlikely that anything Russia, China, or any other country does regarding North Korea will induce this regime to abandon its nuclear weapons ambitions, international pressure by Russia and other countries seems to have discouraged more nuclear or long-range ballistic missile tests since 2013. With Kim expecting to visit Moscow in May, the DPRK is less likely to go ahead with another nuclear test or additional provocations before then. Afterwards, he would have to weigh a potential loss of his new Russian ties when contemplating future disruptive steps.

Given the race to see which happens first – the DPRK develops a credible nuclear deterrent or the regime in Pyongyang collapses from its own internal contradictions – the Russian-DPRK reconciliation could help keep the situation from getting worse while we await a more enduring solution to the Pyongyang problem.