Moscow is pushing a project to link the Trans-Siberian and the Trans-Korean railways. The plan is hoped to help the Russian Far East recover from economic decline and contribute to Moscow's political objectives in Northeast Asia. But its economic viability remains in question and it's not clear yet how the parties would raise the estimated $3 billion to fund the project.
Prague, 21 November 2002 (RFE/RL) -- Moscow in recent weeks has stepped up talks with North and South Korea on an ambitious plan to link the Trans-Siberian and Trans-Korean railways.
The rail link would open up the 9,000-kilometer Trans-Siberian railway to South Korean exports. At the same time, Moscow sees the plan as a way both to help the Russian Far East recover from economic decline and to strengthen its political influence on the Korean peninsula.
Stephen Blank, a professor of national security affairs at the Strategic Studies Institute of the U.S. Army War College, told RFE/RL the project is part of a larger strategy to form a giant network of transportation lines linking Asia and Russia. "There is a strategy in economic terms to leverage Russia's geography between Europe and Asia, and make Russia the hub of a huge series of infrastructure networks, transportation, trade, pipelines, that tie Europe and Asia together through Russia. One example would be this railroad that ties the Trans-Siberian to the Trans-Korean, and then at the other end in Europe we need to go to Baltic ports or on to Europe. A second example would be the North-South corridor, which ties together Russia, Iran, and India."
Blank said Russia believes such projects will promote trade and attract foreign investment. In particular, he added, the linking of the Trans-Siberian and the Trans-Korean railways will help Moscow maintain a hold on its Asian territory by establishing a lasting economic-political influence there. "Russia would benefit enormously from becoming a trade center between Asia and Europe. They would be able to charge transportation taxes, making a lot of money. It will help develop Asian Russia, further interest South Korea in [investment] projects with regards to Russia, and benefit the area that way."
Sergei Blagov is a Moscow-based specialist in the political affairs of the Commonwealth of Independent States. He said until recently Russian Railway Minister Gennadii Fadeev was pessimistic about the Korean railway project. The minister appears to have changed his mind and now argues the link with the Koreas would bring in some $30 billion a year, on the assumption that South Korea would divert at least 10 percent of the cargo it currently delivers to Europe by sea.
Blagov said, however, the reason for the change of opinion is probably political -- and not economic -- since the economic dynamics of the region have not improved and, in some cases, have gotten worse. "This change [of opinion] indicates that it's rather a political than economic project because the Trans-Siberian itself has not been economically viable in recent years. In fact, the traffic [has] dropped significantly compared to the Soviet times. And it remains to be seen whether the connection with Trans-Korean would do any good for the Trans-Siberian."
Indeed, there are strong doubts about the economic viability of the rail link, given the continuing lower cost of sea transportation.
Japan's Economic Research Institute for Northeast Asia estimates that the cost of moving cargo from South Korea to Europe by rail would be about 30 percent higher than by sea. As a senior economist at the institute, Hisako Tsuji, pointed out, many of the technical issues have yet to be resolved. "It will take a lot of time. North Korean railway conditions are very bad, very poor, and old. And they are all single tracks. So someone has to rehabilitate North Korea's railway. That's a big issue. And trans-shipment facilities between North Korea and Russia have to be constructed. And more importantly, the South Korean side doesn't harbor a railway line along the east [coast]. About 300 kilometers must be constructed to reach [the South Korean port of] Pusan."
One point that the three parties agree on is the need to create an international consortium to finance the estimated $3 billion for the plan. It is not yet clear, however, where the money will come from.
The project may make more sense on political grounds. Russia and South Korea argue that it may fuel progress in reconciling the two Koreas. Tsuji agreed. "The most important part is the political part. This [project] really gives an opportunity to talk between North and South Koreas. That is the biggest point. So we hope that North and South [Korea] could at least continue talking through this railway."
Blank said the project goes beyond the two Koreas and may also enhance Russia's standing in the overall Korean peace process. "Politically, Russia wants to be seen and to be understood as a state that has a major and legitimate interest and influence over the shape of a Korean peace process. Politically this [project] shows they can provide economic opportunities to the North and to the South [of the Korean peninsula]."
Blank says competition with China constitutes a hidden agenda for Russia. Moscow, he says, is concerned about rising Chinese economic power and Chinese influence in the Far East.
Both Koreas are working on another rail line along the west coast of the Korean peninsula that would link the South Korean port of Pusan to Pyongyang and to the Trans-China railroad.
Blagov noted that Moscow is eager to capitalize on its long-standing ties with North Korea to increase its role in Northeastern Asia. "Since Russia is keen to have its special role on the Korean peninsula, the Russian government needs to back it up with some economic substance. And since direct trade between Russia and North Korea is quite low -- it's $100 million a year -- such a high-profile project is needed to back up this Russian special role on the Korean peninsula. A railroad link could very well serve this aim."
In the past two years, ties between Russia and North Korea have experienced a modest revival. Putin visited North Korea in July 2000 to become the first-ever Kremlin leader to visit Pyongyang. North Korea's leader Kim Jong-il has also visited Moscow.