Libmonster ID: JP-1306
Author(s) of the publication: L. V. ZAKHAROVA
Educational Institution \ Organization: Institute of the Far East of the Russian Academy of Sciences

Keywords: Russia, North Korea, economic relations, cooperation

During the Cold War, the USSR was a key economic partner of North Korea. The Soviet Union accounted for between a quarter and a half of North Korea's foreign trade turnover in the 1970s and 1980s. In 1990, the USSR's share in North Korea's foreign trade reached 53.3%, or $2.2 billion. At the same time, economic relations between the two countries in the Soviet period were largely based on preferential prices and clearing settlements, as well as preferential technical assistance provided by the USSR. By the early 1990s, facilities built in the DPRK with the help of the Soviet Union produced up to 70% of electricity, 50% of chemical fertilizers, and about 40% of ferrous metals. The aluminum industry was created entirely by Soviet specialists. In total, 70 large industrial enterprises were built with the assistance of the USSR.1

The turn of Russia's Korean policy, which focused on economic cooperation with the ROK, in the first half of the 1990s led to an almost complete freeze in relations with the DPRK and a decline in bilateral economic ties. Many joint projects were discontinued, and the transfer of mutual settlements to a freely convertible currency led to a sharp reduction in trade. Already in 1995, the trade turnover between the two countries amounted to only $83 million.2

KEY MILESTONES OF THE CURRENT STAGE

The beginning of the restoration of relations between Russia and North Korea was laid at the turn of the XX-XXI centuries. In February 2000, a new interstate Treaty on Friendship, Good Neighborliness and Cooperation was signed. In it, the parties agreed to actively promote the development of trade, economic, scientific and technical ties, creating favorable legal, financial and economic conditions for this. In July 2000, the President of the Russian Federation Vladimir Putin. Putin visited Pyongyang, and in 2001 and 2002, North Korean leader Kim Jong Il paid two visits to Russia. The new treaty laid down the legal basis for modern relations between the Russian Federation and the DPRK, and the documents signed following the summits outlined priority areas of cooperation for the future. In particular, the Moscow Declaration of the Russian Federation and the DPRK of August 4, 2001 mentioned such areas of economic cooperation as " implementation of reconstruction projects built by joint efforts


The article was prepared in the framework of the RGNF project N 15 - 07 - 00028 - "Russia and China: Korean dimension of Security and Cooperation (DPRK and ROK)".

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enterprises, in particular, in the electric power industry", as well as "a project to create a railway transport corridor connecting the North and South of the Korean Peninsula with Russia and Europe".

Since the early 2000s, in its policy on the Korean Peninsula, the Russian leadership has placed special hopes on the implementation of major projects with the participation of both Korean states - connecting the Trans-Siberian Railway and the Trans-Korean Railway, laying a gas pipeline from Russia to the ROK through the territory of the DPRK, and organizing the supply of Russian electricity to the Korean peninsula. Discussion of these initiatives is an integral part of any meaningful negotiations between officials of the Russian Federation and the DPRK, the Russian Federation and the ROK. Despite years of negotiations, none of these projects has yet begun to be implemented in a trilateral format. The tense situation on the peninsula due to the DPRK's nuclear program and the aggravation of relations between North and South Korea since 2008 have made a destructive contribution to this.

There are interstate mechanisms between the Russian Federation and the DPRK designed to promote the development of economic ties. Among them are the Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation and its sectoral sub-commissions (on trade, transport, interregional cooperation, scientific and technical cooperation, and the forest industry), whose meetings regularly discuss issues of economic cooperation.

North Korean Leader Kim Jong Il's trip to Siberia and the Russian Far East and his meeting with Russian President Dmitry Medvedev in Ulan-Ude in August 2011 gave a significant boost to bilateral economic cooperation. After that, Gazprom's negotiations with KOGAS (ROK) and the Ministry of Oil Industry of the DPRK on the construction of the gas pipeline intensified. In September 2011, Gazprom and KOGAS signed a Roadmap for the implementation of natural gas supplies from Russia to Kazakhstan via the territory of the DPRK, which set out a schedule for further work with the South Korean side. On the same day, Gazprom and the Ministry of Oil Industry of the DPRK signed a memorandum of understanding and agreed to establish a working group on the construction of a gas pipeline to the Korean peninsula (its first meeting was held in November 2011).

At the same time, the issue of concluding an intergovernmental agreement between the Russian Federation and the DPRK on cooperation in the gas sector, which would create a legal basis for the implementation of the project, was considered. It was estimated that if the pipeline was built, North Korea could expect $100 million annually in transit fees. In 2012, following the discussion of gas supply volumes, terms, price formula, as well as the point of transfer of products to the South Korean side, commercial agreements were expected to be signed between Gazprom and KOGAS. After that, it would be possible to start the practical implementation of the project. In 2012, however, due to the worsening military and political situation on the peninsula, negotiations between the Russian and South Korean partners were suspended.

Meanwhile, Russia's bilateral economic ties with North Korea are in a state of crisis. In 2011, Russia's trade with the DPRK amounted to about 1% of North Korea's total external trade turnover. Drastic measures were required to restore trade and economic ties. And judging by the events of recent years, the Russian leadership has made a political decision in favor of intensifying cooperation with North Korea on a bilateral basis, stimulating interest in the DPRK and on the part of Russian business.

In the face of international economic sanctions against Pyongyang and the generally difficult investment climate of the DPRK, the main types of assistance that the Russian government can provide to businesses are removing unnecessary administrative barriers, negotiating to improve conditions for Russian business in North Korea, and supporting large projects at the government level.

A clear confirmation of Russia's interest in developing economic ties with North Korea was the resolution of the problem of the DPRK's debt to Russia, which has been negotiated for several years and which has often been called one of the main obstacles to expanding economic cooperation between the two countries.

September 17, 2012 Russia and North Korea signed an agreement on the settlement of the DPRK's debt to the Russian Federation on loans previously granted to the former USSR. The President of the Russian Federation signed the Federal Law on its ratification on May 5, 2014. The amount of debt was estimated at $11 billion. taking into account the exchange rate of the transferable ruble and accrued interest. Russia agreed to write off 90% of North Korea's debt, and the remaining amount ($1.09 billion) should be repaid by North Korea within 20 years in 40 equal semi-annual installments by crediting it to an interest-free account opened by Vnesheconombank at the DPRK Foreign Trade Bank3. The agreement provides that this balance can be used to finance joint Russian-North Korean projects in the humanitarian (education, health) and energy fields. Thus, a kind of fund was created for future Russian investments in the DPRK. At the same time, the remaining debt can also be used to finance trilateral gas and railway projects.

Since 2013, the Russian Embassy in the DPRK, in close cooperation with Russian and Korean economic departments and commercial organizations, has been actively working to correct the unfavorable situation in the trade and economic sphere that has developed over the past 20 years4. The result of this work, supported by the political will of the Russian leadership, was the subsequent activation of bilateral relations. Since the beginning of 2014, Russia-North Korea relations have expanded significantly-

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business contacts in the field of economics both at the governmental and regional levels. In addition, Russia announced the provision of humanitarian assistance to the DPRK in the form of deliveries of 50 thousand tons of food wheat.5

The locomotive of the development of economic relations with North Korea is currently the Russian Ministry for the Development of the Far East, whose head, A. Galushka, is the chairman of the Russian part of the Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation between the Russian Federation and the DPRK (the chairman of the Korean part of the Commission is the Minister of Foreign Economic Relations of the DPRK Lee Ryong Nam).. During the visit of the Russian Minister to the DPRK in March 2014, the parties discussed various joint projects and prospects for bilateral trade and economic ties, and also set a goal to bring mutual trade to a qualitatively new level with an increase in volume to $1 billion by 2020. Taking into account the fact that in the XXI century the volume of direct trade turnover between the Russian Federation and the DPRK did not exceed $250 million a year, and in 2013 it amounted to a little more than $100 million, a significant expansion of economic cooperation will be required to increase bilateral trade almost 10 times in 7 years. According to the Russian minister, this leap is quite achievable.

In April 2014, a large delegation of more than 40 people visited the DPRK headed by Deputy Prime Minister of the Russian Federation, Presidential Plenipotentiary Representative in the Far Eastern Federal District Yu. Trutnev, who held talks in Pyongyang with Chairman of the Presidium of the Supreme People's Assembly of the DPRK Kim Yong Nam, Chairman of the Government of the DPRK Park Bong Joo and other top leaders of the country. The Russian delegation included: the Governor of Primorsky Krai V. Miklushevsky, the Governor of Khabarovsk Krai V. Shport and the Governor of the Amur Region O. Shport. Kozhemyako, who confirmed the interest of their regions in the further development of economic cooperation with the DPRK. In addition, the Governor of the Amur Region and the Minister of Foreign Trade of the DPRK signed an Agreement on trade and economic cooperation, agreeing to develop cooperation in the fields of agriculture, logging and construction. During the visit, a ceremony was held to hand over 50 units of special fire equipment to the Korean side as humanitarian aid.

At the request of the federal center, President of Tatarstan R. Minnikhanov became a participant in negotiations between Russia and North Korea on economic cooperation. He led a large delegation that visited the DPRK in March 2014. Together with the President, representatives of the Ministry of Industry and Trade, the Ministry of Agriculture, the Chamber of Commerce and Industry of Tatarstan, JSC Tatneftekhiminvest-Holding, JSC TAIF and Kazan State University left for North Korea. One of the results of the trip was an agreement to create a joint working group on cooperation between Tatarstan and the DPRK and strengthen the trade turnover of the republics. To date, this subject of the Republic of Korea has not actually had economic contacts with North Korea. However, during the visit, it became clear that the parties have quite a lot of areas of mutual interest. During the talks, issues of cooperation in the oil industry, construction, agriculture and other areas were discussed.

In June 2014 (after a three-year break), the 6th IPC meeting was held in Vladivostok, where promising conditions and projects for intensifying bilateral cooperation were discussed. Under international and US economic sanctions against the DPRK, bank transfers to and from North Korea are significantly impeded. To resolve this problem, the Russian Federation and the DPRK agreed to switch to settlements on export-import transactions in Russian rubles and solve problems of interbank interaction.

In June, the first agreements were signed on opening correspondent accounts of North Korean banks in Russian banks. The agreements were concluded between JSC JSCB Regional Development Bank, the DPRK Foreign Trade Bank and the Korean Bank for International Development. On this basis, in October 2014, the first settlements in rubles were made between the parties.7

Within the framework of the IPC meeting, a presentation of the special economic zones of the DPRK was held, and priority tasks for expanding cooperation between the two countries in the field of trade, energy, and natural resources were outlined. Among the regularly discussed and potential areas of mutually beneficial bilateral cooperation, Russian companies can highlight geological exploration of hydrocarbons on the territory of the DPRK, participation in the development of mineral deposits, including non-ferrous and rare-earth metals, establishing cooperation in the field of gold mining, production of goods in North Korea using raw materials, joint projects in the field of agriculture and others.

According to direct participants in the 2014 talks, the North Korean side demonstrated an unprecedented level of openness and willingness to cooperate with Russian representatives. The DPRK authorities expressed their readiness to create the necessary conditions for doing business by entrepreneurs from the Russian Federation. These include simplifying the procedure for issuing multiple-entry visas, providing technical communication systems (mobile communications and the Internet), guaranteeing investment protection and access to North Korean legislation on the functioning of special economic zones*. One of the practical steps to comply with mutual agreements was that in the second half of 2014, Russian entrepreneurs received long-term multiple-entry visas to the DPRK for the first time8.

In September-October 2014, the Minister of Foreign Affairs paid a 10-day visit to Russia


* In the DPRK, not all adopted laws are published, and therefore, sometimes foreign investors need to make efforts to quickly obtain full versions of the legislation they need regarding their activities in North Korea (editor's note).

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Chart. Dynamics of trade turnover between the Russian Federation and the DPRK in 2000-2013 (in millions of US dollars).

Source: data from the Federal Customs Service of Russia.

North Korea's Lee Soo-yong, during which he visited Moscow and a number of Russian Far Eastern regions (Sakhalin and Amur Regions, Primorsky Krai). Special attention was paid to economic cooperation projects between the two countries at meetings with the heads of Russian departments and regions.

In October 2014, a Russian business delegation headed by Minister A. Galushka paid another visit to the DPRK. The parties agreed to create a Business Council of entrepreneurs of the two countries interested in developing economic ties on the basis of the Russian Chamber of Commerce and Industry. The Russian businessmen visited the Kaesong Industrial Complex, which is the only existing inter-Korean cooperation project in which North and South Korea would like to attract investors from third countries. A certain amount of interest on the part of Russian businessmen has recently been shown in Kaesong, especially from companies in the agro-industrial sector.

In general, we can say that a new long-term mechanism of economic cooperation between Russia and the DPRK is currently being developed and tested, in which both the state and private business are actively involved on the Russian side. A special working group has been set up under the Russian Ministry of Eastern Development to support individual projects of Russian companies in the DPRK. Its first meeting was held in September 2014 with the participation of representatives of North Korea.

BILATERAL TRADE

In the first half of the 2000s, North Korea's trade with Russia tended to grow, increasing from $ 105 million in 2000 to $233 million. In 2005, however, this trend reversed in 2006, and in the context of the global financial crisis, the bilateral trade turnover in 2009 decreased to $49 million. As a result of the subsequent partial recovery, Russia's trade with North Korea totaled $112.7 million in 2013. In general, if by the middle of the first decade of the XXI century the share of Russia in the foreign trade turnover of North Korea exceeded 5%, then since 2009. It fell below 2% as North Korea's economic exchanges with the outside world grew. In the early 2010s, the volume of mutual trade between Russia and North Korea was almost 50 times less than the DPRK's trade with China and 15 times less than the DPRK's trade with the ROK.

As can be seen from the diagram, the basis of bilateral trade is made up of exports from Russia. Imports of goods from North Korea to Russia remain insignificant. As a result, in economic relations with Russia, North Korea has a chronically negative trade balance, which decreased from $219.5 million to $94.1 million between 2005 and 2013, primarily due to a decrease in the total volume of mutual trade.

To expand bilateral trade between Russia and North Korea, it is necessary to work on increasing and diversifying commodity supplies. And there are certain groundwork for this. Over the past two years, a number of large Russian companies have shown interest in cooperation with North Korea. At the end of 2012, Evraz's Raspadskaya coal company signed a contract with the DPRK for the supply of coking coal, under which more than 170 thousand tons of coal were delivered from Russia to North Korea in 2013 with a total value of about $19.9 million. 9 Coal supplies continued in 2014.

According to the Russian Embassy in North Korea, the main goods exported by Russia to North Korea in 2013-2014 were:: coking coal and diesel fuel, metals and articles made from them, machinery, equipment and vehicles, food products and agricultural raw materials. Russian imports from North Korea in 2013 included textiles and footwear, chemical products, mineral fuels, metals and articles made from them10. At the same time, more than 90% of the bilateral trade turnover was accounted for by Russian exports. To remedy this situation, the North Korean side is actively trying to offer its Russian partners its export goods and services from the DPRK. For example, in the summer of 2014, the Embassy of the DPRK in Russia suggested that Russian IT companies hire several dozen Korean programmers to fill the shortage of personnel in the Russian information technology market.

To boost trade cooperation between Russia and North Korea, it is also important to establish road links between the two countries. Currently, only the railway line operates

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The message is strange, but the North Korean side has been making proposals for the construction of a road bridge for a long time. In March 2014, an agreement was reached to speed up work on the preparation of an intergovernmental Agreement on international road Transport, 11 which gives hope for the early start of practical work in this area.

INVESTMENT COOPERATION

Investment cooperation between the Russian Federation and the DPRK remained at a low level until recently. According to the Russian Ministry of Economic Development, at the end of 2008, the volume of accumulated investments from Russia to the DPRK amounted to $2.552 million (almost the entire volume is in the manufacturing sector), and from the DPRK to the Russian Federation - $2.505 million. Among the reasons for this situation, experts called: stagnation of the economy and a narrow range of export products of the DPRK; low solvency of North Korean companies and distrust of them on the part of Russian firms; lack of modern infrastructure and difficulties with financial calculations caused by international sanctions against the DPRK.

The main modern project of investment cooperation between the Russian Federation and the DPRK, implemented since 2008, is the project of connecting the railways of the two countries. As part of the project, a 54-kilometer section of the railway from Khasan Station (Russia) to Rajin Port (North Korea) was restored and a cargo terminal was built in Rajin port to organize transit traffic with access to the Trans-Siberian Railway. The implementation of this project required investments of about $300 million from the Russian side (represented by Russian Railways). In September 2013, the commissioning ceremony of the reconstructed railway section was held, and in July 2014, the commissioning ceremony of the universal transshipment terminal in the port of Rajin was held.

In 2006, the Russian Federation, the DPRK and the ROK announced this project as the first stage of restoring the entire Trans-Korean Highway (in its eastern direction), but since 2008 inter-Korean relations have been in crisis, and ROK's participation in the project has been suspended. According to the original business plan of the project, the infrastructure created in Rajin was to be used for transshipment of container cargo from South Korea (and other Asia-Pacific countries) with access to the Russian railway network. However, due to the freezing of the South Korean side's participation in the project and the lack of a confirmed container cargo base, the project participants had to deviate from the original plan for the construction of a container terminal and temporarily change its specialization for transshipment of bulk cargo. At the initial stage, it is planned to use the terminal to export up to 5 million tons of Russian coal annually to the Asia-Pacific countries.

In April 2014, Russian Railways transported two pilot cargo trains with coal from Kuzbass via the Khasan-Rajin 12 section to develop transportation technology, pass customs procedures, and handle cargo at the port of Rajin. After that, coal shipments from Russia to China began to be carried out through the port of Rajin.

At the same time, Russia does not lose hope of implementing the trilateral model of the project. During the visit of Russian President Vladimir Putin to Seoul in November 2013, a Memorandum of Understanding was signed between the Russian Federation and the Republic of Korea, which provides for the possibility of connecting a consortium of South Korean companies to Russian-North Korean cooperation on the construction and operation of a cargo terminal in the port of Rajin and a railway line from Rajin to the Russian South Korean businesses can enter this project only in the framework of cooperation with Russia13, for example, through the acquisition of a part of the Russian share in the joint venture of the Russian Federation and the DPRK "RasonKonTrans", which is the operator of the project. Currently, 30% of the shares of this joint venture belong to the North Korean side, and 70% - to the Russian JSC "Russian Railways Trading House". It is in these 70% that South Korean business could enter.

Russia and North Korea support the participation of South Korean companies in the operation of the built infrastructure. In 2014, representatives of South Korean companies POSCO, Hyundai Merchant and Marine and KORAIL visited Rajin twice, where they visited the port infrastructure, railway, and other facilities. Currently, Russian Railways and a consortium of the above-mentioned South Korean companies have begun to develop a mechanism for further implementation of the project in the format of trilateral cooperation. Various possibilities of connecting Southerners to the project are considered, including the creation of a joint company in Russia with the functions of a freight forwarder. A trial shipment of coal from Russia via the port of Rajin to South Kore14 was scheduled for the fourth quarter of 2014.

The visits of businessmen from the Republic of Korea to the DPRK were made possible thanks to the support of the South Korean government, which issued permits to its citizens to visit North Korea. However, in general, this initiative is still being implemented through large business in Kazakhstan without the active participation of the government. If the involvement of South Korean companies in Russian-North Korean cooperation is implemented in any format, it will set an important precedent for other trilateral projects.

In October 2014, another large-scale initiative of Russian companies in the DPRK was officially launched. It was the Victory project, which involves the modernization of the transport infrastructure and mining industry of the DPRK with the participation of the Omsk scientific and production association Mostovik. In Russia, it is particularly known for designing and building the Russian Island Bridge in Vladivostok for the APEC summit and some Olympic venues in Sochi.

Unlike the Khasan-Rajin project, which was implemented with Russian Railways ' own and borrowed funds with the hope of their subsequent payback, the Pobeda project is planned to be implemented on the principle of "money first, then investment". In particular, as the Minister explained

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Russian Far East Development Agency, "Russian companies' expenses will be covered by access to North Korea's minerals, including rare earth metals and coal. " 15 That is, Russian companies (it is not yet specified which ones) plan to develop North Korea's natural resources, sell them, and the DPRK government is going to invest the proceeds in the modernization of railways. As part of the project, Mostovik NGO will create a joint venture with the Korean side, in which technologies, equipment and training instructors will be provided by the Russian side, and workers - by the Korean side.

During the project implementation, 3,500 km of railway track will be reconstructed over 20 years, as well as artificial structures, including tunnels, bridges and pier tracks. As the first object of the first stage of reconstruction and modernization of the DPRK railway, the section "Ja-dong-Gangdong-Nampo" was chosen.

The entire plan for the reconstruction of the railways of the DPRK, divided into 10 stages, is estimated by the management of the NGO Mostovik to involve capital investments of about $25 billion.16 "Pobeda "could be a practical example of the implementation of a mutually beneficial model of trade and economic cooperation between the two countries, which implies the participation of Russian companies in infrastructure and other projects on the territory of the DPRK in exchange for access to North Korean mineral resources.

However, modernization of the transport infrastructure is not enough to solve the problems of the North Korean economy. Improving the country's electricity supply is on the agenda. In this regard, another type of economic cooperation discussed between Russia and the DPRK was the organization of electricity supplies from the Russian Federation to North Korea. Earlier, JSC RusHydro prepared a feasibility study for the project, and as Minister A. Galushka stated in October 2014, the project has shown its commercial attractiveness and will be updated due to mutual interest of the parties. A joint working group of RusHydro and the People's Committee of the City of Rason is planned to be set up to work out options for electricity supplies from the Russian Federation to the Rason trade and economic zone. At the same time, the Russian side also plans to hold negotiations with potential participants from the Republic of Korea on the implementation of an energy bridge from Russia to the Korean Peninsula 17.

REGIONAL COOPERATION

Currently, more than 40 regions of Russia are engaged in economic cooperation with the DPRK in various fields, including construction, forestry, agriculture, fishing, healthcare and clothing industry. In terms of foreign trade with the DPRK, the leaders among Russian regions over the past year were Primorsky Krai ($23.4 million), St. Petersburg ($23.1 million), Kemerovo Region ($19.4 million)18. According to the results of recent negotiations, Tatarstan and Chuvashia also show interest in cooperation with the DPRK in various spheres Russia , Yakutia, Sakhalin and Ulyanovsk regions that are interested in supplying their goods to North Korea.

Traditionally, an important place in bilateral economic relations is occupied by the development of ties between the DPRK and the Far Eastern regions of the Russian Federation, among which the Amur Region, Primorsky and Khabarovsk Territories are the most active. In particular, at the beginning of 2014, 15 enterprises with investments from the DPRK operated in the Khabarovsk Territory, including 6 enterprises with 100% capital of the DPRK, 1 joint venture with Russian capital, as well as 8 representative offices of North Korean companies.

The most dynamic area of inter-regional cooperation is the attraction of Korean labor for temporary employment in the territory of the Russian Federation. In the course of implementing federal and regional development programs for the Russian Far East, there is a tendency for a noticeable increase in the number of workers from the DPRK.19 In 2010, approximately 21,000 North Korean workers were recruited to work in the Russian Federation, including in construction, agriculture, forestry, healthcare, fishing, and light industry. For 2013 Russia has increased the quota for foreign workers from North Korea to 35 thousand people. This area of cooperation is very beneficial both for Russia (a disciplined, unpretentious and inexpensive labor force helps mitigate the shortage of labor resources in the most difficult areas of Siberia and the Far East), and for the DPRK, which receives serious foreign exchange earnings and helps to solve the employment problem that is quite acute in the DPRK. 20 The increase in the volume of cooperation between the DPRK and the Russian Federation on this line resulted in an increase in the company's passenger trafficAir Koryo between Vladivostok and Pyongyang increased by 22% in the first half of 2014 21

Recent years have been marked by an increase in North Koreans ' interest in implementing agricultural projects in the Russian Far East. Since 2011, various options for cooperation with the Amur Region have been discussed, including the implementation of joint projects on the creation of dairy and meat farms, as well as on the cultivation of cereals and soybeans.22 In mid-2013, the Consul General of the DPRK in Nakhodka at a meeting with the Governor of Primorsky Krai reported that the DPRK is going to invest $1 million. for the development of corn and soybean processing in the region, and is also ready to consider joint projects for the development of animal husbandry in Primorye 23.

In 2014, North Korean officials said they were interested in renting 10,000 hectares of land in the Khabarovsk Territory for growing vegetables, raising livestock, and setting up processing plants using Korean labor and equipment. In addition, there were reports of possible attraction of investors from the Middle East to finance these projects. Most of the products produced by agricultural enterprises created in Russia

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It will have to be exported to North Korea to improve the food situation in the DPRK.

PROSPECTS FOR BILATERAL ECONOMIC COOPERATION

Since Kim Jong-un came to power, the DPRK has stepped up its foreign economic policy aimed at diversifying trade ties and attracting foreign investment. Pyongyang seeks to reduce its economic dependence on China, as well as restore economic ties with Russia, and bring our relations to a qualitatively new stage. The current low level of economic cooperation between the DPRK and the Russian Federation does not meet either the economic or political interests of the two countries.

As for Russia, Moscow is gradually coming to the realization that it is not necessary to count on the rapid implementation of trilateral projects with the participation of South Korea. In the meantime, it is necessary to strengthen bilateral economic ties with the DPRK in order to strengthen its position on the Korean peninsula, including in the dialogue with the ROK. At the same time, the policy of implementing significant infrastructure projects on the Korean Peninsula for Russia is obviously maintained in anticipation of better times in the inter-Korean dialogue. At bilateral talks with representatives of the Russian Federation, both the leadership of the ROK and the leadership of the DPRK warmly support the trilateral format of economic cooperation.

It is important to emphasize that at the present stage, Russia is ready to expand economic relations with the DPRK on the basis of mutual benefits and economic pragmatism, based on specific projects. There is no question of any return to the Soviet-era model of relations, although the North Koreans are trying to offer cooperation "on credit" again in the negotiations. Despite the crucial role that the Russian government plays in promoting economic cooperation with the DPRK at this stage, it is important that after creating the necessary institutional conditions and gaining some experience, the initiative passes into the hands of private companies. For this purpose, it is urgently necessary to improve the efficiency of North Korean partners ' work, identify specific responsible persons for interaction with Russian companies, and provide complete and reliable information about mineral deposits offered in exchange for Russian investments and supplies of goods. Russian business interests in the DPRK are gradually growing, and Russian ministries and departments provide their support to interested companies, but if North Korea is unable to provide the necessary level of information and organizational interaction with Russian partners, the projects that are currently being actively discussed will not be implemented.


1 Koreiskoe regulirovanie i interesy Rossii [Korean Settlement and Interests of Russia], ed. by V. I. Denisov and A. Z. Zhebin, Moscow, IDV RAS, NP Publishing House "Russian Panorama", 2008, p.84.

Leshakov P. S. 2 The role of Russia in the policy of economic involvement of the DPRK-see: Korea: New Horizons, Moscow, IDV RAS, 2005, pp. 201-202.

3 The law on ratification of the intergovernmental agreement on the Settlement of the DPRK's debt to Russia on Loans granted during the former USSR period was signed, May 5, 2014 / / website of the President of the Russian Federation - http://www.kremlin.ru/acts/20916

4 It is necessary to prevent a new round of the arms race on the Korean Peninsula / / Interfax, 06.02.2013 - http://www.mter-fax.ra/txt.asp?id=288966&sec-1483

5 On the delivery of the first batch of Russian humanitarian aid to the DPRK, October 7, 2014 / / website of the Ministry of Foreign Affairs of the Russian Federation - http://www.mid.ru/ brp_4. nsf/newsline/F539FFB9F1956DDE44257D6A0057CED2

6 The President of Tatarstan went to the DPRK to establish economic cooperation, March 21, 2014 / / RBC website-http y / rt.rbc. ru/tatarstan_topnews/21 /03/2014/912657.shtml

7 Between Russia and the DPRK passed the first settlements in rubles, 20.10.2014 / / website of the Ministry of Eastern Development of the Russian Federation - http://min-vostokrazvitia.ru/press-center/news_minvostok/?ELEMENT_ID=2370

8 North Korea for the first time issued long-term and multiple-entry visas to Russian citizens, 08.09.2014 / / Website of the Ministry of Eastern Development of the Russian Federation -http://minvostokrazvitia.ru/press-center/news_minvostok/? ELEMENT_ID=2150&sphrase_id=10023

9 According to the Federal Customs Service of Russia.

10 Trade and economic cooperation / / Website of the Russian Embassy in the DPRK - http://rusembdprk.ru/ru/rossiya-i-kndr/torgovo-ekonomicheskoe-sotrudnichestvo

11 A. Galushka: Russian-North Korean relations are aimed at a qualitatively new level and a breakthrough in the trade and economic sphere, 28.03.2014 / / Website of the Ministry of Eastern Development of the Russian Federation - http://min-vostokrazvitia.ru/press-center/news_minvostok/?ELEMENT_ID-1905

12 Russian Railways to transport two pilot freight trains with coal under the Khasan - Rajin project, 08.04.2014 / / Website of the Russian Railways-Partner Information Agency.ру - http://www.rzd-partner.ru/news/zheleznodorozhnye-gruzoperevozki/rzhd-osushchest-viat-per evozku-dvukh-pilotnykh-gruzovykh-sostavov-s-uglem-v-ramkakh-proekta-khasan/

13 Since May 24, 2010, the ROK Government has imposed trade and economic sanctions on the DPRK, prohibiting any investment cooperation.

14 South Korea may participate in the Russian Railways and North Korea project //RIA Novosti, 06.11.2014.

15 Minister of the Russian Federation for the Development of the Far East Alexander Galushka spoke about the results of his visit to the DPRK, 28.10.2014 / / Website of the Ministry of Eastern Development of the Russian Federation - http://min-vostokrazvitia.ru/press-center/news_minvostok/?ELEMENTlD-2530

16 Russian "Victory" in North Korea, 22.10.2014 / / Site Expert-Online - http://expert.ru/2014/10/22/rossijskaya-pobeda-v-kndr/

17 Russia and North Korea will move to abolish visas / / Interfax, 06.02.2013 - http://www.interfax.ru/404369

18 Igor Slyunyaev held a working meeting with North Korean Ambassador to Russia Kim Yong Jae, 14.08.2014 / / Information and Analytical portal "United Korea" - http://onekorea.ru/2014/08/15/igor-slyunyaev-provel-rabochuyu-vstrechu-s-poslom-kndr-v-rf - kim-en-zhe/

19 Regional communications / / Website of the Russian Embassy in the DPRK -http://www.rusembdprk.ru/rossiya_i_kndr/regionalnye_svyazi/

Matsegora A. I. 20 Korey peninsula in Russian Politics / / Korey: uroki istorii i vyzovy sovremennosti [Korea: Lessons of History and Challenges of Modernity], Moscow, IDV RAS, 2013, p. 15.

21 Vladivostok International Airport summed up its results in the first half of 2014, 01.08.2014 / / Vladivostok International Airport website - http://vvo.aero/press-center/news/mezh-dunarodnyy-aeroport-vladivostok-podvel-itogi-raboty -v-pervom-polugodii -2014-goda.html

22 Specific agreements have been reached between the Amur Region and the DPRK in a number of areas of cooperation, 19.10.2011 / / Website of the Government of the Amur Region - http://www.amurobl.ru/ wps/portal/Main/AllNews/News/!ut/p/c5

23 Vladimir Miklushevsky met with the new Consul General of the DPRK in Nakhodka, 20.06.2014 / / Website of the Governor of Primorsky Krai V. V. Miklushevsky - http://miklushevskiy.ru/ news/1660.html


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