Monday, January 20 2020 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Is this Moonshine or Chimera?
RUSSIA, China, the United States and North Korea are all key players in South Korean President Moon's grand plan to "connect" a newly-burgeoning economic region of Northeast Asia, a "community of peace and prosperity". Again, the key is Pyongyang. Can it be counted on as a consistent, willing partner? Or will its traditional recalcitrance to 'reform' again dash all hopes . . .
SEOUL -- Since his election to the Presidency of South Korea in May 2017, Moon Jae-in has been pursuing an ambitious policy intended to achieve multiple political, strategic, economic - and even, presumably, personal objectives.
The Busan-native, born of North Korean refugee parents from the evacuation from Hungnam, North Korea, in 1950, Moon has brought, under his far-reaching New Northern Policy, a number of policy initiatives and economic investment projects (many recognisable to ATI readers) involving Russia, China and, especially, North Korea.
The New Northern Policy has its own Presidential Committee on Northern Economic Co-operation, involving four Ministers collectively responsible for Foreign Affairs, Economy, Finance and Trade.
Its Chairman, Song Young-gil, citing President Moon's "dream" of "being able to board a train in Busan . . . pass through Rajin-Khasan and reach Europe by the Trans-Siberian Railway", sees it as "a vision" that not only seeks to "connect" South Korea to "countries in the northern region" but also "aims to develop Northeast Asia . . . into a community of peace and prosperity".
The Policy, which ultimately seeks to enlist support from Russia, China, Mongolia, and the Eurasian Economic Union, makes specific reference to the resurrection of previous economic projects (the ROK-Russia gas pipeline, the Rajin-Khasan railway) again familiar to long-term ATI readers.
The Policy also is expressly intended to mitigate a decline in the shipping and shipbuilding industries of Busan and Ulsan.
In this new New Northern Policy, Russia looms large.
At the Third Eastern Economic Forum, held appropriately in Vladivostok in early September, Moon proposed nine ROK-Russia projects involving port rejuvenation, railways, shipbuilding, gas, power generation, fisheries, agriculture, (resultant) employment and a North Polar Route - all under the framework of Moon's 9-Bridges Strategy.
This policy is one that has been taking shape in the Korean public consciousness since ROK-USSR joint recognition in 1991. The two economies are highly complementary (Russia exports raw materials while the ROK exports finished products).
However, integration of the Policy's multitudinous components with their often-conflicting stakeholders gives reason for pause.
One sentence from Song's "message from the Chairman" highlights the extreme complications in all this: "The Moon Administration has remained consistent in its basic principle of improving relations with China and Russia and thereby bolstering its defence based on the ROK-U.S. alliance while taking a peaceful approach to resolve the North Korean nuclear issue." Whew!
An even greater problem concerns the motives and interests of the other players: Russia, China, U.S. and, of course, North Korea itself.
Russia: A clear winner in this win-win policy is Russia itself.
Having invested (to no obvious financial or political return) in various Russia-ROK-DPRK projects, Russia would have every reason to support the New Northern Policy generally and the 9-Bridges Strategy specifically.
After all, it would potentially assist in economically reviving Russia's Far East, open up new markets, strengthening Russia's presence and hence position in the region, and even assisting in mitigating the stranglehold of sanctions.
China: Various factors of unequal weight (the U.S. trade sanctions; the Made in China 2025 initiative that set off alarm bells globally; fortification of the South China Sea to reinforce China's maritime claims; Beijing's most ill-advised economic pressure on Seoul following installation of THAAD that caused South Koreans to become wary of -- if not alarmed at -- economic dependence on China; China's "Social Credit System" that is widely perceived as ranking its citizens based on how strongly their Internet behaviour supports official PRC policy, resulting in embarrassing and even criminal behaviour by its agents and citizens in other countries -- the list goes on) have led to growing apprehension over becoming drawn into a too-close orbit with China.
Even Kim Jong-un's execution of his uncle, Jang Song-thaek, was seen in part (in both South and North Korea) as a move to limit Chinese influence.
In short, China is now distrusted by both North and South given that it is seen to be offering at best a pact with the Devil.
Yet, given China's resources to assist, along with its means to obstruct -- both abundant in equal measure -- having China on board is seen as far more preferable than excluding it.
As to whether President Moon is playing China and Russia off against the other, several observations are in order.
First, given differences between China and Russia in terms of economic compatibility, national issues at stake, degree of potential and actual involvement and relative size of the three countries, probably not.
Moon and his team are most likely currently engaged in sky-thinking, seeing where opportunities are likely to open up -- and exploiting them.
Under Moon's plan, China and Russia's assigned roles are as yet not in conflict and the first mover is likely to obtain disproportionate benefits (should the initiative succeed).
Both China and Russia may view any gains on the Korean peninsula as beneficial so long as they do not see a zero-sum gain (one winning more than the other). At least, economically, any progress ought to cohere with their national development plans.
The United States: Trump is widely perceived as being personally favorable to Vladimir Putin (and by extension Russia) and antagonistic to China for its economic rise through means considered nefarious by the Trump base: corporate interests and largely white, blue collar workers.
In contrast, members of Trump's National Security Council, including Chief-of-Staff John Bolton, have consistently advocated wariness toward Russia and support for NATO, which, in turn, hinges on Nixonian-Kissingerian calculations of continued detente with the PRC.
Fiona Hill, Special Assistant to the President and Senior Director for European and Russian Affairs, has been quietly representing these longstanding U.S. foreign policy objectives.
Her deputy, Richard Hooker, Senior Director for Russia, Europe and NATO, who had advocated a hardline stance toward Russia and unwavering support for NATO, left the NSC in July, leaving in his wake questions as to whether he was forced out.
As for North Korea, Trump lauded Kim Jong-un and predicted beforehand that his summit in Singapore would be "tremendously successful", despite an obvious lack of planning or a clear agenda. Did the outcome indeed create a "special bond" between the two leaders?
Trump may find walking back on his words awkward, unless Chairman Kim makes it easier for him to do so through a renewal of provocations.
Despite its current dysfunctionality on the global stage, the U.S. remains critically important to the success of the New Northern Policy and its subordinate 9-Bridge Strategy.
Here we need to look at (1) Russia and North Korean sanctions, and (2) the U.S. China trade war.
Unless Eurasia unites to collectively isolate (read ignore) the U.S. over its succession of unilateral political and economic impositions, individual States will need to factor in secondary sanctions (pressure on third parties who might be tempted to help primary sanctions targets evade them).
As Song Young-gil wailed, according to a Washington Post article by Adam Taylor: "It's so stressful that the United States is so controlling."
This was a clear reference to U.S. sanctions against North Korea that aggressively pursue secondary sanction violations.
A relatively recent new law, the Countering America's Adversaries Through Sanctions Act (CAATSA) took effect in January. This specifically covers both North Korea (Title III) and Russia (Title II).
The Act authorises sanctions against third parties doing "significant" business with designated firms (Section 231 specifically covers third parties doing business with sanctioned Russian firms). Yet, as this report went to press, the UN (with US approval) permitted a survey of the east coast rail project (intended to connect the ROK to Russia) to proceed, although actual construction is still sanctioned.
North Korea: This player is the most critical of all as all assumptions are based on its consistent, willing co-operation.
Over the years of writing for ATI, this author has seen countless policies, proposals and projects launched and dashed by the ultimate (and highly predictable) recalcitrance of North Korea to 'reform' as the price of opening up.
With experience ranging from the USSR's glastnost and perestroika to Libya's Pact with NATO, the North Korean regime has remained highly sceptical of any meaningful international bond.
That may well explain why such an apparently dysfunctional, political aberrant anomaly has outlasted its ideological fraternal regimes.
*Peter Sylvestre is ATI Correspondent in Seoul.