Russia’s Korean Policy since 2012: New Hopes, Achievements, and Disappointments

This article focuses on Russia’s Korean policy since 2012. That year was very important: in North Korea, Kim Jong-un had just come to power at the end of 2011; in Russia, Vladimir Putin returned to the presidential office in May; and in South Korea, leadership changed in the aftermath of Park Geun-hye winning the December presidential election. These changes involved major shifts in foreign policy strategy and prompted foreign states to seek new opportunities for cooperation. In 2016, a new string of important developments has been set in motion: North Korea’s January nuclear test followed by its long-distance missile test in February, South Korea’s comprehensive rejection of economic ties with North Korea including those involving Russia in February, the Security Council’s Resolution 2270 greatly expanding sanctions on the North in March, and Seoul’s July decision to deploy THAAD against the strong objections of Russia and China. These developments may reflect shifts in strategy, intensifying competition even as elements of cooperation have been renewed. A close look at Russian reactions—both aspiring to new types of cooperation and warning of severe consequences—is warranted since Russia considers itself a major player in the jockeying over the future of the Korean Peninsula.

What are the major trends and developments of Russia’s Korean policy since 2012? How should we evaluate its success or failure? What are the implications for the next stage in its relations? To try to answer these questions, my coverage considers: first, the historical background of Russian-Korean relations until 2012; second, the trilateral agenda amid Moscow’s conflict resolution efforts; third, the major trends in Russia’s bilateral relations with both Koreas; and finally, the policy considerations that Russia may be weighing following the far-reaching changes on the peninsula that occurred through the first half of 2016. The conclusion provides an evaluation of Russia’s equidistant approach to the Koreas and its prospects going forward.

Historical Background

Russia became a Korean neighbor in 1860 when the Qing empire ceded the current Primorsky krai territory to the Russian empire according to the Convention of Peking. It took decades for Russia to populate this territory, leading to bilateral relations with the Kingdom of Joseon in 1885. Increasing Russian influence in Korea was a factor provoking Japan to launch the 1904-1905 Russo-Japanese War that resulted in Russian defeat and Japanese annexation of Korea. The 17-kilometer Russian-Korean land border allowed Koreans to emigrate northwards, fleeing first from the harsh domestic order and later from the Japanese occupation. The cross-border migration was stopped by the Soviet regime in the first half of the 1930s, and in 1937 some 172,000 Soviet Koreans were deported to Central Asia as potential accomplices of the hostile Japanese empire. In turn, Japan stimulated both voluntary and (from the late 1930s) forced migration of Korean workers to southern Sakhalin, which was seized by the Soviet Union in 1945, as 43,000 Koreans remained. Despite several thousand emigrating to South Korea in the 1990s, the Sakhalin Korean community (some 25,000) contributes to the province’s special relations with South Korea.

The USSR made essential contributions to the formation of the DPRK from 1945, the Korean War, and the development of transportation infrastructure and restoration and construction of many enterprises afterwards. In the 1950s a railway bridge across the Soviet-DPRK border was built, but no automobile bridge has been built to the present time. The USSR also started to use the North Korean workforce in timber harvesting in some regions. Thousands of North Korean workers today live in isolated settlements inside the Russian Far East supervised by North Korean security officials, as during the Soviet era. Only after the 1988 Seoul Olympic Games did bilateral relations with South Korea start to improve quickly.

During the first half of the 1990s, South Korea was considered, as a pro-Western democratic state, a welcome Russian partner, whose trade turnover with Russia was quickly rising. Despite some tensions in the second half of the 1990s (Seoul’s persistent pressure aiming to alienate Moscow from Pyongyang, marginalization of the Russian role in the Korean nuclear talks, Russia’s $2 billion debt, and South Korean reluctance to invest in unstable Russia), relations between the two were generally friendly. In contrast, in the first half of the 1990s Russia considered North Korea ideologically alien: a hostile state suspected of attempting to obtain nuclear weapons, steal Russian military technology,¹ smuggle heroin into Russia, and organize some high-profile contract killings on Russian territory (such as the murder of South Korean consular official Choe Deok-geun in Vladivostok in 1996). Bilateral trade turnover dropped from $2.3 billion in 1988 to $85 million in 1996, overwhelmingly Russian exports, for which Pyongyang was able to pay mainly by sending its cheap, semi-slave, logging workforce to Russia. The Russian attitude softened somewhat in the second half of the 1990s for several reasons, including discontent with its marginalized role in Korean peace talks, cooling in Russian-South Korean relations, and the window of opportunity provided by President Kim Dae-jung’s Sunshine Policy.

Shortly after coming to power in 2000, Vladimir Putin started to implement a new approach, proclaiming equidistance to Pyongyang and Seoul and interest in peaceful conflict resolution and ultimate unification. Moscow managed to achieve recognition as an intermediary and joined the Six-Party Talks in 2003, while offering Pyongyang and Seoul a set of large-scale economic projects involving construction of a trans-Korean railroad, pipeline, and power line that could turn the peninsula into a transcontinental transportation hub, supply both Koreas with Russian energy resources, and provide North Korea with much-needed currency and incentives for peaceful development and closer cooperation with the South. These plans have endured in the face of repeated obstacles, rising and falling in visibility since the Six-Party Talks failed in 2008.

Bilateral relations with the two Korean states developed along different trajectories. Relations with South Korea were much more stable, and the trade turnover in 2000-2011 grew nine-fold to $25 billion, as Russian raw materials were exchanged for Korean equipment and consumer electronics, though Russia also drew on its high-tech achievements in space. In 2008, presidents Dmitry Medvedev and Lee Myung-bak proclaimed a strategic partnership, which some analysts found to be largely rhetorical.² Relations with North Korea were far less stable. The political breakthrough of the early 2000s cooled in the second half of the decade, while the trade turnover peaked at $260 million in 2006, dropped to $45 million in 2008, and partially recovered to $110 million by 2011. It is worth mentioning, though, that some experts believe that the value of uncounted trade was many times larger, as the majority of supplies of Russian goods were carried via Chinese intermediaries.³ In 2008, Russia started reconstructing the railway from Khasan to the port of Rajin that was finished in 2014 — considered an initial step to the trans-Korean railroad project.

Russia-DPRK-ROK Trilateral Relations and Conflict Resolution

After Russia joined the Six-Party Talks, some Russians argued that it was the only party among the non-Korean participants that was really interested in a single Korea for economic (profiting from transit transportation) and political (counterbalancing the Chinese influence in the Russian Far East) reasons.⁴ Moscow largely condemned Pyongyang’s confrontational approach, but did not abandon hopes for the ultimate success of its initiatives. It was restrained in criticizing North Korea, framing the North’s military policy as defensive and reactive to the existential threat from outside.⁵

Russian hopes concerning Kim Jong-un’s coming to power initially seemed to be well grounded, as in February 2012, when Pyongyang agreed to suspend nuclear weapons tests and uranium enrichment in exchange for US food aid and prospects of progress in peace talks. The deal was soon suspended, however, as North Korea undertook a “satellite launch.” Moreover, a North Korean missile launch in December 2012 and nuclear test in February 2013, each time followed by new UN sanctions supported by Moscow, gave rise to escalation, peaking in late March and early April 2013 when Pyongyang resorted to indirect threats of launching a nuclear war and asked foreign embassies, including the Russian one, to evacuate, claiming that it could not guarantee their security if hostilities start. Russia, however, decided not to evacuate, aware of the demonstrative character of the North Korean intimidation tactics. Shortly after, de-escalation followed, amid more cooperative rhetoric. Beijing and Moscow tried to take advantage of this trend by reviving the Six-Party Talks in July. Seoul, Tokyo, and Washington rejected the idea, since North Korea showed no interest in denuclearization.

Seoul made the next significant, cooperative move, revitalizing the Russian initiative of the 2000s. In October 2013, Park Geun-hye proposed a far-reaching Eurasian Economic Initiative, highlighting the idea of a Silk Road Express between Busan and Europe via the trans-Korean railroad, while making South Korea a major Asian transportation hub and boosting cooperation between the two Koreas. A month later, during Vladimir Putin’s visit to Seoul, both leaders expressed their joint support for the initiative and highlighted Russian efforts to build a railroad to the North Korean port of Rajin and modernize the port’s facilities as the first step for the Silk Road Express proposal. Moreover, a memorandum of understanding stipulated that South Korean companies could participate in the Rajin-Khasan project despite severe sanctions imposed by Seoul on North-South trade in 2010.⁶

In 2014, Russia’s conflict with the US and the EU over Ukraine and subsequent Western economic sanctions prompted Moscow to intensify the “turn to the East” aimed at diminishing its economic dependence on Western countries. Relations with both Koreas gained additional importance: North Korea mattered as one of a few firm voters against “anti-Russian” resolutions in the UN General Assembly, while South Korea mattered as one of the few developed economies that did not join in the sanctions despite US pressure.⁷ Implementation of the trans-Korean railroad project was eagerly sought by Russia both to support its economy in a time of crisis and to avoid overreliance on China as a political and economic partner.

Russia actively tried to boost trilateral cooperation with both Koreas, expressing interest in participating in Gaeseong Park projects,⁸ initiating the trans-Korean motor rally held in August, moving Russian ambassador to North Korea Alexander Timonin to Seoul in November, and launching trial deliveries of its coal to South Korea via Rajin in December. Finally, Moscow tried insistently to organize a meeting between Kim Jong-un and Park Geun-hye in 2015, inviting them both to attend the May 9 parade devoted to the 70th anniversary of Soviet victory over Nazi Germany. The South Korean president, however, declined the invitation allegedly not to irritate Western partners (whose leaders boycotted the celebrations), while the North Korean leader initially accepted the invitation but changed his mind afterwards.

While before 2014, Russian official statements describing the US role on the Korean Peninsula had generally been restrained, Russia began criticizing the US military presence in South Korea and especially their joint military exercises as provocative and not in keeping with the North Korean military threat. Additionally, the US proposal to deploy THAAD in South Korea was opposed in Moscow (as well as in Beijing) due to concerns that it could be used for reconnaissance of its own ballistic missiles.

Considering the increased US military presence to be counterproductive, Russian officials claimed that the right way to deal with Pyongyang is not militarization, but détente with reliable security guarantees and rolling back foreign military presence.⁹ Official statements give no details on particular mechanisms of providing mutual security guarantees, but some suggestions can be found in Russian experts’ works.  According to one, it could be achieved by building a monitoring system of bilateral, overlapping treaties (e.g. Russia could monitor implementation of the US-North Korean treaty while Pyongyang could monitor the US-South Korean treaty).¹⁰ According to another suggestion, in exchange for Pyongyang joining the Comprehensive Nuclear-Test-Ban Treaty, Washington could provide guarantees of North Korean security not only to North Korea itself but also to Russia and China.¹¹ Both proposals left unclear what to do if Pyongyang violated the agreements, as it has already done many times with other agreements.

Russian efforts to reconcile Pyongyang and Seoul and weaken the grounds for the US military presence in South Korea were challenged again at the beginning of 2016. In January, Pyongyang claimed that it carried out a hydrogen bomb test and in February, it launched a “satellite.” Russia strongly condemned these actions and supported Resolution 2270, prohibiting among other things the export of a large part of North Korean mineral resources and the supply of aviation fuel, while introducing financial sanctions and inspections of all cargo to and from the DPRK. As a condition of its support, Russia demanded making an exception for transit supplies of its coal via the recently built railway and terminal in Rajin. However, South Korea decided to suspend the trial coal exports via Rajin in March and abandoned its previous intention to sign a binding contract for stable deliveries, thus leaving China the only market.

Despite supporting the UN resolution, Russia’s approach towards the Korean conflict has not changed a lot. While condemning Pyongyang’s nuclear tests, missile launches, and provocative statements, Moscow continues to criticize US-Korean military exercises and military preparations (including the THAAD deployment). Russia maintains that North Korean reactions are defensive and based on legitimate security interests, which should be fully taken into account during negotiations on a peaceful settlement to the current crisis,¹² and that the responses of Seoul and its allies should be “strictly proportional” to the real threat.¹³

Russia’s Bilateral Relations with the Koreas

Russia continued pursuing distinctive aims in bilateral relations with both countries. Economically, South Korea was incomparably more attractive, remaining the third most important economic partner in the Asia-Pacific (after China and Japan).¹⁴ Politically, the importance of Pyongyang was more commensurate, giving Moscow leverage that it otherwise would not have.
Economic cooperation with the South Korea was on the rise in 2011-2014; according to Russian data, trade turnover reached its peak of $27.3 billion in 2014,¹⁵ still comprised mainly of Russian fuel and Korean machinery and consumer electronics. The bilateral mood improved with the launching of the first jointly developed South Korean carrier rocket Naro-1 in January 2013 and mutual presidential visits in September and November 2013. The two countries abolished visas for each other’s citizens from January 2014 that facilitated tourism and business contacts.

Since March 2014, South Korea took a more cautious approach toward Russia that caused a slowdown in official contacts and a decrease in the number of significant agreements concluded. As many observers argue,¹⁶ close strategic cooperation with the US prevented Seoul from forging a closer partnership with Moscow. Further, Russia’s new rapprochement with North Korea and Seoul’s plans to deploy the THAAD system deepened mutual mistrust. Indeed, Moscow repeatedly protested against the deployment of the THAAD: in February 2016, South Korean Ambassador Park Ro-byu was invited for a talk to the Russian Foreign Ministry concerning this issue,¹⁷ and in July 2016, an unidentified source in the Russian Foreign Ministry said that Moscow will have to take the THAAD deployment into account in its further military planning.¹⁸ In turn, Seoul was suspicious towards some Russia-DPRK contacts, illustrated in particular by the February 2016 diplomatic incident, when South Korean intelligence officials accused Russia of supplying Pyongyang with some vital components for its rockets and Moscow strongly demanded an apology for this allegation. Finally, the National Intelligence Service abandoned its claim declaring that the technology obtained by North Korea was just similar to the Russian one.¹⁹ Despite these underwater rocks, partnership rhetoric continued to dominate official discourse.  Official meetings were held, as before, and negotiations involving Russian’s Far Eastern regions intensified from 2014, supported by the recently created Ministry of the Russian Far East.

In terms of economy, South Korean companies grew more reluctant to participate in bilateral projects that could be affected by the sanctions imposed on Russia by the West.²⁰ While in 2014 the bilateral trade turnover even grew by 8.5% (that could be explained both by the previous year’s rapprochement and by Russia’s “turn to the East”), direct investments dropped by 11%. Since the second half of 2014 the Russian economic crisis, accompanied by a sharp fall in oil-and-gas revenues and devaluation of the ruble, damaged Korean companies present in the Russian market and prompted them to be even more cautious (though Hyundai, KIA, Samsung, and LG managed to increase their market shares despite declining revenue).²¹ All of this contributed to a one-third decline in bilateral turnover to $18.1 billion²² in 2015 and to more than a one-quarter decline in Korean direct investments from $1.8 billion in early 2014 to $1.3 billion in early 2016.²³ The trade between South Korea and its provincial partners in the Russian Far East suffered even more, dropping by 47% in Primorsky krai²⁴ and by 44% in Sakhalin oblast.²⁵

These developments were not in accord with Moscow’s “turn to the East” policy, which placed great hope on South Korea as a major economy not participating in the sanctions. Russia counted greatly on South Korean companies, urging them to participate in development of the Russian Far East,²⁶ development of oil and gas deposits, and modernization of its Arctic fleet. ²⁷ Still, there is a sense in Russia that the South Korean government and private companies are greatly interested in political and economic cooperation with Russia in various fields. These include resolution of the conflict with Pyongyang, transportation projects, import of Russian minerals and nuclear fuel, export of consumer electronics and cars, construction, and shipbuilding for Russia, supply of pharmaceuticals to the Russian market, and utilization of the Arctic route (through Russian waters) for cargo transport to Europe. Trying to boost bilateral economic cooperation, Russia proposed an agro-industrial fund, investing in agricultural projects in the Russian Far East,²⁸ and to revise the bilateral fishery agreement to condition fishing quotas for South Korea on its investments in the Russian Far East.²⁹ Some significant bilateral events were held in 2015 prior to the downturn in relations affected by the split over North Korea in 2016.³⁰

As for Russian relations with North Korea, they started to improve after Kim Jong-un came to power. Though bilateral trade was falling ($110 million in 2012,³¹ $92 million in 2014,³² and just $63 million for January-November, 2015³³), Moscow and Pyongyang still hoped to boost trade to $1 billion by 2020.³⁴ Russia proceeded with construction of the Rajin-Khasan railway and a terminal in the port of Rajin. In 2012, Moscow agreed to write off 90 percent of North Korea’s $10 billion debt and to invest the remainder in North Korean educational, medical, and energy projects.³⁵ In 2013, Russia tripled the quota for North Korean labor immigrants and, thereafter, increased it to the record figure of 50,000.³⁶After Russia found itself in conflict with the EU and the US over Ukraine, Pyongyang was one of just 11 countries that voted against General Assembly Resolution 68/262 against Russia taking Crimea from Ukraine. When the May 9 Victory Parade in Moscow was boycotted by Western leaders, Kim Jong-un was one of the few foreign leaders who accepted an invitation, although he changed his mind later, allegedly for internal reasons.

In turn, Pyongyang was interested in rapprochement even more than Moscow, as it found itself almost in complete isolation after its relations with Beijing worsened. It should be noted, though, that Russia and China continued to act together in protecting Pyongyang from “too strong” international pressure. In December 2014 and December 2015, they were among a few countries that voted against the General Assembly resolutions condemning the grave state of human rights in North Korea and calling for international criminal investigation of the violations. Indeed, in 2015, Russia signed a highly controversial extradition treaty that was formally directed against criminals but could be used against North Korean refugees, according to observers.³⁷ Remarkably intensified bilateral, official contacts between Moscow and Pyongyang marked 2014 and 2015. During 2014, they agreed to proclaim 2015 the “Year of Russian-North Korean Friendship,” and three high-standing North Korean officials visited Moscow to conduct negotiations on a wide range of issues, including even military cooperation.³⁸.

The most important outcome of intensified Russian–North Korean contacts was the conclusion of two unprecedented investment deals in October 2014 and January 2015, worth several tens of billions of dollars each for several decades. These deals envisaged the modernization of North Korean railways and power networks, in exchange for access to deposits of rare and non-ferrous metals and anthracite coal. Implementation could allow Russia to prepare North Korean transportation networks for trans-Korean projects largely on its own, even without South Korean companies, which were reluctant to invest in an “unpredictable” country. Russia and North Korea agreed to use Russian rubles for mutual settlements in June 2014 and decided to establish the Asian Trading House in October 2015. Among its main purposes were intensification of direct bilateral business contacts and elimination of intermediaries, first of all, China, which allegedly re-exported to the DPRK Russian goods worth $900 million annually.³⁹

The rapprochement of 2014-2015 ended at the beginning of 2016 with the nuclear test and satellite launch, followed by collective sanctions the Security Council introduced on March 2. Russia supported this resolution after the exemption for its transit coal trade and, according to some, the removal of a representative of the Korea Mining Development Trading Corporation in Russia from a personal sanctions list.⁴⁰ Several days after the UN resolution was adopted, the Russian Foreign Ministry made public a draft presidential decree prohibiting import of North Korean minerals and closing all financial institutions with North Korean participation in Russia.⁴¹ However, as of the end of June, the decree still had not been adopted under the pretext of conducting an anti-corruption investigation,⁴² which apparently can be as quick as nominal when needed. Formal adoption of these regulations would not damage Russian interests significantly, as the value of imports from North Korea was just $60,000 in January-November 2015 and Russia can still export to North Korea fuel if it is not explicitly intended for military needs. Bilateral political contacts also were not curtailed completely: in May the Joint Commission on Cooperation in the Fishing Industry discussed conducting fishery activities in exclusive economic zones of the two countries and issuing fishing quotas for each other.⁴³In June and July, North Korean and Russian leaders exchanged official congratulations: Kim Jong-un congratulated Vladimir Putin and the Russian people on Russia Day,⁴⁴ Putin congratulated Kim Jong-un on being elected chairman of the State Affairs Commission.⁴⁵

Even if Russian-North Korean relations significantly improve again, Russian economic problems, insufficient North Korean economic vitality, and the poor state of North Korean and cross-border transport infrastructure would hinder further economic cooperation.

Russia’s Policy Options vis-à-vis the Koreas

Russia has significant interest in developments on the Korean Peninsula. It is highly interested in preventing a nuclear conflict that could affect its own territory. It relies on South Korea as a key partner for its “turn to the East” policy and wants to establish a trans-Korean railway corridor, pipeline, and electricity traffic from Russia. However, the viability of Russia’s equidistant approach is suspect due to its weak economic influence (in comparison to the Chinese) and inability to reconcile its empathy towards Pyongyang with Seoul’s desire to reduce insecurity via cooperation with the US. Insistence on strategic collaboration with North Korea, which could support Moscow’s political stance on some sensitive issues, can hardly assuage South Korea.

The period 2013 until early 2016 became the second major Russian attempt after the first half of 2000s to achieve a breakthrough through closer ties to North Korea and triangular ties including South Korea. Major agreements with Seoul and the Silk Road Express initiative were followed by Russia-DPRK barter deals and by the launch of a symbolically important first-ever trilateral project for coal transshipment via Rajin. Western sanctions, cooling relations between Moscow and Seoul, and economic crisis hindered Russian plans but did not thwart them entirely.

However, in early 2016, Pyongyang chose again to prioritize its military program over economic development, and Moscow, once again, had to put its trans-Korean plans on ice.Still, Russia regards the trans-Korean project as one of the main potential incentives for Pyongyang to return to limited cooperation. If Pyongyang chooses gradual de-escalation, unfreezing its barter deals with Moscow could create grounds for proceeding with the trans-Korean project either with or maybe even without major South Korean investments. Thus, Russian incentives could play very useful role in conflict resolution under the optimistic scenario.

If Pyongyang continues its current course preferring militarization to economic incentives while consenting to Russia-supported initiatives only for tactical respite, it would be difficult for Moscow to make its equidistant approach efficient or abandon it completely. If Russian incentives do not work, Moscow could hardly supplement them with other levers of pressure, as North Korean economic dependence on Russia is weak. It makes little sense for Moscow to prioritize Pyongyang, as it would attain little gains but potentially incur huge economic and political damage from worsened relations with Seoul and deepened international isolation for supporting Pyongyang. On the other hand, not cooperating with Pyongyang risks rendering itself irrelevant in Korean Peninsula affairs, while gaining little in terms of economic cooperation with Seoul, especially if Western financial sanctions against Moscow continue. Thus, although the ‘equidistant’ policy doesn’t look very efficient now, Russia will most likely continue to pursue it in hopes of its long-term success, provided Pyongyang becomes more cooperative.