A far Far EastThe territory of Russia’s Far East is 28 times larger than the Korean Peninsula. Russia won some of the territory from the Qing Dynasty after the Opium War. Russia is proud of its history as a great country that controls vast territories.
The Far East is an important geopolitical location. It is an entry to the Eurasian continent and an exit to the Pacific Ocean. It is also linked to the Korean Peninsula. The world’s economic and military superpowers are around it.
Vladimir Putin, who took office as the sixth Russian president in 2012, is paying attention to the Far East. In September 2012, Putin made a declaration during the Asia-Pacific Economic Cooperation summit in Vladivostok that he would make Siberia the “Middle East of Asia.” He wants to build gas and oil pipelines to supply Siberia’s energy resources to Northeast Asia and the Asia-Pacific region and reinforce Russia’s geopolitical status. He also has a political purpose for developing the poor area in order to bolster the unity of the country.
But Putin’s ambitious plan faces a great obstacle: plummeting oil prices. Due to the shale boom in the United States and the failure of OPEC to reduce production, the oil price has more than halved since 2014. About 70 percent of all Russia’s exports and over 50 percent of the federal government’s income comes from the energy industry, and the Russian economy was severely hit. Its hardship was worsened by economic sanctions caused by the Ukraine crisis. Russia’s economic growth was minus 3.7 percent in 2015. Due to the recession and plunging foreign exchange rate, its gross domestic product per capita fell from $15,600 in 2013 to $9,200 in 2015.
But rising oil prices are brightening future prospects for the Russian economy. OPEC and non-OPEC oil producers agreed to a reduction in output. In February 2015, the price of West Texas Intermediate was $26 per barrel, but the price went up to $53 recently. Of course, oil prices cannot continue to go up in the longer term, and reforming the Russian economy is a difficult task. So the country cannot expect the rapid growth it experienced in the past. The International Monetary Fund forecasts that Russia’ growth rate will be about 1 or 2 percent after next year.
The future of the Far East is uncertain. The population of the region is only 6.2 million, just 4.2 percent of the total Russian population. That is far lower than the 120 million population of the three Northeastern provinces of China, which share its border. The climate is cold, and the soil is barren.
Two seminars took place during the JoongAng Ilbo Peace Odyssey in August to address Korea-Russia economic cooperation and joint development of Russia’s Far East. When Korea’s manpower and technology work with Russia’s natural resources, the area has the potential for development. But there is also a high risk in such an investment. Russia wants to offer special benefits to attract foreign capital, but information is scarce and the infrastructure is poor. Experts warn that business is not easy in Russia without connections and the law does not provide safeguards to the investors. Business-wise, the Far East is a Wild West.
Trilateral transportation and energy cooperation among the two Koreas and Russia and an agricultural cooperative project, in which Russia would offer land, the South would offer technology and the North would offer labor, have high potential. But without improvement in the two Koreas’ relations, trilateral cooperation is impossible.
The Peace Odyssey was a journey that reminded us once again that inter-Korean relations are the key to building a joint cooperative system for peace and prosperity in Northeast Asia. In order to persuade the North to reform and open up and accomplish peaceful unification, we must resume inter-Korean talks and bolster cooperation with our neighbors to change the North.
Odysseus won the Trojan War. But it took him 10 years to return home to Ithaca. During the Peace Odyssey journey, we visited places where many independence fighters, who died before Korea’s liberation, were buried. The country they dreamed of is still divided 70 years after liberation from colonial rule, and their dream is still our dream.
Because of North Korea’s missiles, planes have to fly across Manchuria and detour to the Yellow Sea instead of flying directly between Vladivostok and Incheon. Our hope is sincere that Korea will see a leader with the courage and wisdom of Odysseus to link Seoul and Pyongyang and to open a direct path between Russia’s Far East and the Korean Peninsula.
Translation by the Korea JoongAng Daily staff
JoongAng Ilbo, Dec. 30, Page 29
*The author is a professor of economics and the head of the Asiatic Research Institute of Korea University.