Russia, North Korea Boost Economic Ties

This article originally appeared at Voice of America

A Russian official said Moscow and Pyongyang have agreed to discuss the creation of advanced development zones in Russia’s Far East and North Korea.

The latest project to be discussed between Russia and North Korea would call for a trilateral project, with South Korea’s participation, said Alexander Galushka, Russia’s minister for the development of the Russian Far East.

In an email sent to the VOA Korean news service, Galushka said Moscow and Pyongyang agreed to “discuss the creation of advanced development zones in the Russian Far East and on the territory of the DPRK with the participation of the Russian Federation, the DPRK and South Korea.”

Economic delegation

The agreement was reached during a visit by a North Korean economic delegation to Moscow in late February. The North Korean delegation was led by Ri Ryong Nam, Pyongyang’s Minister for Foreign Economic Affairs.

Ri and Galushka co-chair a commission tasked with promoting economic ties between Moscow and Pyongyang.

The move is an example of a series of ambitious economic projects recently launched by Moscow and Pyongyang in their efforts to enhance economic ties.

In November, the two sides expanded the Khasan-Rajin project, a project connecting the railways of Russia’s border town and the North Korean port, by conducting a test shipment of Russian coal from Russia to the South Korean port city of Pohang through the Rajin.

In October, the two countries launched a rare joint project that calls for Russia to overhaul North Korea’s railway system in return for access to the North’s mineral resources. The project involves reconstruction of more than 3,000 kilometers of railroads over 20 years.

Galushka said the railway project would pave the way for a significant increase in bilateral trade between Russia and North Korea.

Some analysts are skeptical that the project can be sufficiently financed. So far, Moscow is known to have attracted one domestic investor for the project.

Russian investors

When asked if more Russian investors would join, the Russian minister said, “As this is a large project, new participants will be required. However, this is the prerogative of the business to attract new members.”

Relations between Russia and North Korea warmed recently. North Korean leader Kim Jong Un is expected to travel to Moscow in May to attend the 70th anniversary of Russia’s victory over Nazi Germany in World War Two.

Some analysts raised doubts whether the young leader, who has never visited a foreign country or met a head of state since he took power in late 2011, would choose Moscow over Beijing for his first trip. But expectations that Kim will visit Moscow are increasing.

Last year, Moscow canceled $10 billion of Pyongyang’s $11 billion debt incurred during the former Soviet Union era.

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