Time to end the sanctionsA Chinese vessel carrying bituminous coal from Siberia via the North Korean port city of Rajin arrived this morning in Pohang, South Korea. It is the first shipment under the Khasan-Rajin project that aims to establish trade routes among the two Koreas and Russia. The keystone of the project was construction of a 54-kilometer (33.5-mile) railroad from the Russian town of Khasan and the modernization of Rajin, North Korea’s free trade port.
Under the deal, North Korea and Russia set up a joint venture company in 2008 and recently completed railroad renovation and port modernization. South Korean companies are prohibited from direct investment in North Korea under the May 24, 2010, sanctions installed after the deadly attack on the Cheonan. Instead, they had to participate by buying Russian stakes in the joint venture. Although it is not considered direct investment, the fact that South Korean capital goes into North Korea is a violation of the sanctions. Nonetheless, Seoul endorsed the investment as an exception because it is part of President Park Geun-hye’s Eurasia Initiative.
The Khasan-Rajin railroad can be connected with the Trans-Siberia Railway system. When it links up with the Trans-Korean Peninsula Railway, the gigantic rail would become a modern Silk Road linking Northeast Asia and Europe. Whether by land or sea, Rajin can shave as much as 40 percent off shipping costs compared with existing sea routes through Southeast Asia, the Indian Sea and the Suez Canal. If a Russian gas pipeline is built across the Korean Peninsula along with the transcontinental railway system, it would be a turning point for our economy.
The recent visit to Russia by Choe Ryong-hae, North Korea’s second most powerful figure, underscores Pyongyang’s shift toward Moscow. Russia recently offered $25 billion to modernize 3,200 kilometers of North Korea’s railroads over the next 20 years in return for access to the North’s mineral resources. The Construction Economy Research Institute of Korea said North Korea is planning to invest 270 million won (about $240,000) in infrastructure projects.
While the North offers the answer to the bottlenecked South Korean economy, we also need to consider the big picture and unification. We cannot advance northward without going through North Korea. The sanctions must first be removed to clear the way. Local companies must be able to jump on the bandwagon without limitations. It is hypocritical to champion the Eurasia Initiative, while at the same time imposing business sanctions on North Korea. JoongAng Ilbo, Nov. 29, Page 34