Russia-South Korea Relations: Much ado About Something

10.26.11

Russia-South Korea Relations: Much ado About Something

10.26.11
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China and Russia’s close relations have played out on the international stage for the past decade and each signed memorandum or trade agreement has reinforced the strengthening bond of these two odd bed-fellows. But there’s a less public romance developing between Russia and South Korea as well. In recent years, Moscow has invited and courted South Korean businessmen and diplomats, encouraging investment and political cooperation. Robust trade numbers between the two nations seem to indicate that the relationship is functioning: in 2010, bilateral trade increased by 82.2 percent, hitting more than $11 billion, and major South Korean brands have become ubiquitous in the Russian market.

Seoul is likely the only nation in East Asia that has a relationship with Moscow unhampered by suspicion or tension. Japan and Russia often suffer from prickly relations due to territorial disputes regarding the Kuril Islands. North Korea’s erratic and reclusive behavior has made it difficult for Russia, and for any member of the Six Party talks, to form a dependable relationship. As for South Korea, its high-tech economy and regional proximity have made it an optimal partner in the context of Russia’s economic “modernization” movement.

But for the Kremlin, Russia’s closer ties with South Korea are more than just a matter of increasing trade. The strengthening of ties with South Korea provides a slight counterbalance to a number of Russia’s security issues in East Asia, especially in light of China’s explosive growth. Furthermore, a closer relationship allows Russia to further expand its presence in East Asia. In particular for the Kremlin, a quiet diplomacy with Seoul addresses three major security questions: Russia’s energy trade that’s overly dependent on China, the development of the Russian Far East (RFE), and increasing Moscow’s leverage in North Korea.

Russia’s Energy Exports

The first security issue is the persistent question of energy and diversification of Russia’s export partners. Moscow has been actively looking for new customers beyond its European and Chinese market, and this past year, it made overtures to South Korea and Japan. The high-energy economies of Seoul and Tokyo represent a large market for Russia’s energy supply, and even a point of entry into other Asian countries. Since there is no direct gas pipeline connecting to Russia, liquefied natural gas (LNG) has become the major choice of consumption for South Korea and Japan countries.

In the 2010 Summit between South Korea and Russia, Seoul pledged to increase its import of Russian oil to 7.5 million tons, equaling about 20 percent of its consumption. South Korea has also invested in energy projects in the RFE. This past month, South Korean energy company Kogas announced its proposal to build three mini liquefied natural gas (LNG) plants in the Primorskiy Krai region and on the Sakhalin islands of Russia. Meanwhile, similar agreements have been made with Tokyo. Particularly after the Fukushima disaster, Russia has been quick to offer energy support to Japan. The recent string of energy deals between Tokyo and Moscow has revived relations that had only before been at a historic low due to the Kuril Island disputes.

The Development of the Russian Far East

In regards to the RFE, Moscow is well aware of China’s major presence in this sparsely populated area. With federal funds comprising only a third of what Chinese businesses are investing in this area, Moscow cannot afford to lose Chinese cash, which is desperately needed for the region’s economic development. At the same time, however, local Russians have been interpreting China’s strong presence as a gradual economic takeover by Beijing. As a result, Moscow welcomes the development of these provinces by foreign investment, so long as it is not dominated by China. South Korean presence in the RFE, though not as large as China, remains substantial, especially in the areas of automobile manufacturing, consumer goods, and shipping. South Korean companies would be a welcomed in an area dominated by Chinese businesses.

South Korea has been especially active in the RFE, conducting numerous low-level cultural and economic exchanges. In nearly all of the exchanges between South Korea and the RFE, the agenda has consistently been about the integration of the South Korean economy into the region. During an October meeting between South Korean diplomat Lee Yu-ho and Russia’s Gazprom representative Alexey Miller, the two parties discussed the “potential future of cooperation in the RFE, within the framework of the eastern gas pipeline program.” Any dialogue with South Korea—whether about economic or energy cooperation—is inseparable from the question of the RFE’s development.

Russia and North Korea Question

Finally, closer ties with South Korea increases Russia’s influence over North Korea and the Six Party talks. After the September meeting between President Medvedev and North Korean leader Kim Jong-il, Moscow reached a number of economic and military agreements with Pyongyang. On a subject where Russia has traditionally let Beijing play the leading role as Pyongyang’s intercessor, the Kremlin has taken a more independent position within the peninsula. Increasingly, Russia is presenting itself to South Korea as a reliable partner in the resolution of issues with North Korea.

On October 22, the Russian Ministry of Foreign Affairs met with their South Korean counterparts in Moscow to discuss the possibility of a trilateral economic project between Russia, South Korea, and North Korea. The talks also touched upon political, economic development, and humanitarian cooperation. Most noteworthy is Moscow’s recent leveraging of its energy resources to normalize South-North Korean relations. Russia has suggested the construction of a gas pipeline through the DPRK and into the South, an idea that has garnered support from both North and the South Korea. If executed, the proposal would strengthen Russia’s influence in the Koreas, positioning itself as an intermediary for negotiations between the two countries. This could be accomplished without any need for Chinese participation.

Part of a Larger Strategy?

Russia’s pursuit of quiet diplomacy with South Korea has been a foreign policy success. Though Russia’s relations with South Korea can never reach the level of magnitude it has achieved with China, Seoul represents an opportunity for Russia to develop a larger presence in East Asia. Especially when one considers that Russian security issues that have been traditionally dominated by China, the concept of developing other East Asian partners may be decisive in assuring Russia’s interest in the region. And so, as both nations prepare for another high-level meeting next week in the second round of the “Russia-South Korea Dialogue,” Russia faces perhaps its first real opportunity to become a major player in East Asia.

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