Russian Far East to top agenda of Park-Putin summit talks

By Korea Herald
  • Published : Oct 13, 2013 - 18:48
  • Updated : Oct 13, 2013 - 18:48
The Arctic Sea and multiple railways crisscrossing Siberia and the Russian Far East might become alternative routes to the Suez Canal.

With Seoul as a potentially important investor, an ambitious program of Arctic shipping and trans-Siberian railway expansion opens up the prospect of new trade routes between South Korea and Europe.

“This topic will be among the biggest to be discussed by our two presidents,” said Russian Ambassador to South Korea Konstantin V. Vnukov in an interview with The Korea Herald at the Russian chancery Wednesday.

Russian Ambassador Konstatin V. Vnukov gestures during an interview with The Korea Herald at the Russian chancery on Wednesday. (Philip Iglauer/The Korea Herald)
In addition to the situation on the Korean Peninsula and other issues, Presidents Park Geun-hye and Vladimir Putin will discuss the financing of huge infrastructure projects during a summit scheduled for the middle of next month.

Putin has long envisioned the Russian Far East as a major energy and logistics provider to the world’s largest economic engine: the Asia-Pacific region, home to nearly 50 percent of global GDP and more than half of all trade.

Initial investment projects are valued in the billions, with estimates ranging from $17 billion to $30 billion just to expand and modernize the aging Baikal-Amur (BAM) and Trans-Siberian railways. Energy, port facilities and shipbuilding are three other areas that could attract foreign direct investment.

Putin referred to interest in such projects by South Korean investors when world leaders gathered for the Asia Pacific Economic Cooperation summit in Bali, Indonesia last week, though the leaders of Russia and South Korea did not meet on the sidelines.

But they have already met, Vnukov pointed out.

“(Park) started her talk during the G20 Summit in St. Petersburg by describing a dream she had in which she took a train from Busan, and traveled via Russia using this trans-Siberian route to Western Europe,” he said.

If the rail modernization plan goes through, it could boost industry in Siberia and the Far East region by expanding rail capacity for transporting freight. That could create half a million jobs in the medium-term, according to one report.

Heads of state of the two nations have met more than once a year since diplomatic relations were established between Russia and South Korea 23 years ago.

Putin’s visit here in November marks the 27th such meeting, but this one could be the most important summit to date.

“It will be the main event in our relations this year and will be very important in working out the main direction of our cooperation with South Korea in the years to come,” the ambassador said.

Vnukov said that South Korean businesses have been interested in three Moscow-led projects in Siberia and the Russian Far East since. One project would give South Korean products a faster, cheaper route to Western Europe by linking up the trans-Siberian and the trans-Korean railways.

A third looks to lay a pipeline linking Russian oil and natural gas to energy-hungry Seoul. South Korea is one of the world’s largest consumers of gas.

A third project links up the electricity grids in the Russian Far East with ones in North and South Korea, and all three depend on improving notoriously volatile inter-Korean ties.

“For us, the situation here is not just a theoretical problem; it is very practical. The state of the security situation here directly affects the Russian Far East,” he said. “Korean security affects our national security.”

The three projects have been talking points in meetings between Russian, and North and South Korean officials since as early as the 1990s. Over the last two decades, numerous feasibility studies were conducted. Proposals floated. All for naught.

“What is most important is that both North and South Korea have expressed interest in (the three projects), including the new leader of North Korea, Kim Jong-un,” he said.

“North Koreans have said several times that they are interested in the railway and the gas pipeline,” Vnukov said. “The new leader of South Korea has also expressed interest when she met Putin in St. Petersburg in September.”

There are already some Korean-Russian joint ventures under way. In the works is a POSCO plan to develop Vanino Port, a major logistics hub located just north of Vladivostok, enlarging shipping capacity for trade between Russia’s Far East and East Asian neighbors Japan and Korea, in particular to the port of Busan.

Commercial links between the two nations have surged since diplomatic ties were first established in 1990. Korean investment in Russia was $2.9 billion in 2012 but increased collaboration faces major challenges, according to one official at the Ministry of Foreign Affairs.

Two-way trade increased to $25 billion last year from negligible figures a little more than two decades ago. South Korean and Russian officials discussed shipbuilding, energy and a slew of other bilateral topics at their annual Joint Commission on economic, scientific and technological cooperation in July.

By Philip Iglauer (

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