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Asean

North Korea: Trilateralism in the pipeline?

Author: Aidan Foster-Carter, Leeds University August found Kim Jong-il on the road again. Travelling only in his trademark armoured train, due to a fear of flying, restricts his choice of destinations considerably. His previous three trips had all been to China , so it was time for a change. On August 20 Kim’s train crossed the border at Khasan into Russia . Such a trip had been anticipated earlier. Given Pyongyang’s abiding goal of being beholden to no single benefactor, one would expect it to seek to balance and mitigate its new dependence on Beijing. Russia is an obvious candidate to play off against China, as Kim Il-sung skilfully did during the Sino-Soviet dispute from the 1960s onwards. There was a rumour that Kim Jong-il would meet Russian president Dmitry Medvedev when the latter visited Vladivostok at the end of June. A June visit to Vladivostok did not materialize. Whatever the reason, for Vladivostok in late June read Ulan Ude in late August. While Kim’s visit was as ever described as unofficial, the usual bizarre pretence that it was not happening until it was all over and he was safely home, was dropped. KCNA reported his entering Russia promptly on August 20. On August 21 Kim Jong-il visited the largest dam in the Far East region, the Bureya hydropower plant. This caused a frisson in Seoul. Bureya produces more electricity than can be used locally, and Russia would like to sell the surplus to Korea — North and South. For Kim to visit this site is thus significant. On August 24-25 KCNA released a thick file of reports, including an account of an outing on Lake Baikal on August 23. This stressed how Kim was following in the path of his father Kim Il-sung half a century earlier. But where was Kim the day before his Baikal cruise? There seems to be no report of what he got up to on August 22. By some accounts he may have visited Skovorodino: the starting point of a 1,000 km oil pipeline to China and Russia’s Pacific coast. Whether he did or not, energy pipelines were certainly on Russia’s agenda. As anticipated, Kim Jong-il’s summit with Medvedev was held in the rather exotic locale of Ulan Ude, capital of the Buriat Republic. The Buriats are a Mongol people. On his journey home, Kim would later pass through inner Mongolia in China. For completeness he should also at some point visit Mongolia proper. But not this time, for Lee Myung-bak was one step ahead on his own simultaneous if rather brisker inner Asian odyssey — Lee travels by plane, like normal people — which saw him in Mongolia’s capital, Ulaanbaatar during August 20-22, followed by visits to Uzbekistan and Kazakhstan. Lee returned home on August 26, the day before Kim, having wrapped up energy-related deals in all three countries worth a total of some US$12 billion. For all the excited persiflage in which North Korea wrapped Kim’s talks with Medvedev, it is unclear how much they accomplished. There was no formal concluding communiqué, let alone any substantive new treaty or detailed economic agreements. However, two agenda items stand out. First, Kim reiterated the current DPRK stance of alleged willingness to return to the nuclear Six Party Talks (6PT) , stalled since 2008, without preconditions. That may sound good, but it cut no ice in Seoul, Washington or Tokyo, all of whom do have a precondition: that in the wake of last year’s two Northern attacks on South Korea, not to mention getting nowhere much at a snail’s pace during the six long years (2003-08) when the 6PT did meet, this time Pyongyang really has to offer something new, different and substantial to show that it is sincere and means business. (Typically, while Russian reports mentioned a supposed DPRK offer of a moratorium on nuclear and missile tests, KCNA said nothing about this.) Yet the US does need to discuss and curb the DPRK’s uranium enrichment program. And however unfairly, to say you have no preconditions makes you sound the reasonable party. Hence South Korea and its allies will continue to mull what kind of engagement with North Korea is feasible; not least for fear of losing out as Kim cozies up to China and now Russia. The second key agenda item involved energy and infrastructure cooperation, which for Seoul presents a new twist. KCNA was perfunctory in its report: ‘The talks discussed a series of agenda items on boosting the economic and cooperative relations in various fields including the issue of energy including gas and the issue of linking railways and reached a common understanding of them. It was decided at the talks to organize and operate working groups to put the above-said issues into practice and the two countries agreed to continue cooperating with each other in this direction’. Yet to be fair, KCNA also reported Medvedev’s amplification of this in his banquet speech: ‘Cooperation among Russia, the DPRK and the Republic of Korea in carrying out the grand plans in the fields of infrastructure and power has a great prospect. I am convinced that to realize this cooperation would be beneficial to all our three countries and have a positive impact on providing a favorable environment for dialogue and confidence-building between the DPRK and the ROK’. ‘It is our common task to put an end to the confrontation between the north and the south that has lasted for more than half a century, I think’. For KCNA thus to use South Korea’s official name — Republic of Korea, or ROK — is almost unheard of. It usually says ‘south Korea’ (note the lower case s), or as often as not ‘puppet clique’ and similar insults. Nothing in DPRK media happens by chance, so at the very least this suggests that Kim Jong-il is entertaining the idea — or dangling bait for the South to bite. What is at stake here is twofold. Firstly, Russia and South Korea would like to link their rail systems — especially for freight. That involves crossing North Korea, as well as upgrading its decrepit and outmoded railway system, which will not come cheap. Tracks across the Demilitarized Zone (DMZ), the inter-Korean border, were rejoined in 2003 but are almost never used. Secondly, in 2008 Lee Myung-bak and Medvedev — meeting in Moscow almost three years before the latter finally caught up with Kim Jong-il — announced with much fanfare a US$90 billion deal for Russia’s Gazprom to send gas to the ROK’s KoGas for the next thirty years. This would mean a pipeline across North Korea: an idea first floated over 20 years ago by the Hyundai group’s prescient founder, Chung Ju-yung. Yet the DPRK was not party to the Moscow announcement, which thus appeared oddly undiplomatic. It has taken another three years to bring Kim Jong-il on board — if indeed he is, as opposed to feigning interest. For now, what is clear is Kim’s great tactical skill. He has waited to play the Russian card for maximum effect. Suddenly he has two friends again, not just one. China, through which he travelled home can hardly complain. Russia is keen on the rail and gas projects. These are also an offer which resource-poor South Korea can ill afford to refuse. Lee Myung-bak may hesitate, but Kim will not give him the pleasure anyway for two reasons: deep mistrust, and his being a lame duck. Lee’s five year term of office is drawing to a close: by early 2013 someone else will be in the Blue House. Whoever it be, they are unlikely to ‘nix’ gas from Siberia, despite the obvious risks that Pyongyang will play games, turn off the taps and so on. It is too early to be sure, but northeast Asian politics and economics alike might be entering a new era. Aidan Foster-Carter is honorary senior research fellow in sociology and modern Korea at Leeds University, and a freelance consultant, writer and broadcaster on Korean affairs. A longer version of this article first appeared in, and is used with the kind permission of, NewNations.com . Russia-North Korea: Denuclearisation of the Korean peninsula US and China playing hands over North Korea Third time unlucky: Carter snubbed again on Elders’ North Korea trip

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Author: Aidan Foster-Carter, Leeds University

August found Kim Jong-il on the road again. Travelling only in his trademark armoured train, due to a fear of flying, restricts his choice of destinations considerably.

His previous three trips had all been to China, so it was time for a change. On August 20 Kim’s train crossed the border at Khasan into Russia.

Such a trip had been anticipated earlier. Given Pyongyang’s abiding goal of being beholden to no single benefactor, one would expect it to seek to balance and mitigate its new dependence on Beijing. Russia is an obvious candidate to play off against China, as Kim Il-sung skilfully did during the Sino-Soviet dispute from the 1960s onwards. There was a rumour that Kim Jong-il would meet Russian president Dmitry Medvedev when the latter visited Vladivostok at the end of June.

A June visit to Vladivostok did not materialize. Whatever the reason, for Vladivostok in late June read Ulan Ude in late August.

While Kim’s visit was as ever described as unofficial, the usual bizarre pretence that it was not happening until it was all over and he was safely home, was dropped. KCNA reported his entering Russia promptly on August 20.

On August 21 Kim Jong-il visited the largest dam in the Far East region, the Bureya hydropower plant. This caused a frisson in Seoul. Bureya produces more electricity than can be used locally, and Russia would like to sell the surplus to Korea — North and South. For Kim to visit this site is thus significant.

On August 24-25 KCNA released a thick file of reports, including an account of an outing on Lake Baikal on August 23. This stressed how Kim was following in the path of his father Kim Il-sung half a century earlier.

But where was Kim the day before his Baikal cruise? There seems to be no report of what he got up to on August 22. By some accounts he may have visited Skovorodino: the starting point of a 1,000 km oil pipeline to China and Russia’s Pacific coast. Whether he did or not, energy pipelines were certainly on Russia’s agenda.

As anticipated, Kim Jong-il’s summit with Medvedev was held in the rather exotic locale of Ulan Ude, capital of the Buriat Republic. The Buriats are a Mongol people. On his journey home, Kim would later pass through inner Mongolia in China. For completeness he should also at some point visit Mongolia proper. But not this time, for Lee Myung-bak was one step ahead on his own simultaneous if rather brisker inner Asian odyssey — Lee travels by plane, like normal people — which saw him in Mongolia’s capital, Ulaanbaatar during August 20-22, followed by visits to Uzbekistan and Kazakhstan. Lee returned home on August 26, the day before Kim, having wrapped up energy-related deals in all three countries worth a total of some US$12 billion.

For all the excited persiflage in which North Korea wrapped Kim’s talks with Medvedev, it is unclear how much they accomplished. There was no formal concluding communiqué, let alone any substantive new treaty or detailed economic agreements. However, two agenda items stand out.

First, Kim reiterated the current DPRK stance of alleged willingness to return to the nuclear Six Party Talks (6PT), stalled since 2008, without preconditions. That may sound good, but it cut no ice in Seoul, Washington or Tokyo, all of whom do have a precondition: that in the wake of last year’s two Northern attacks on South Korea, not to mention getting nowhere much at a snail’s pace during the six long years (2003-08) when the 6PT did meet, this time Pyongyang really has to offer something new, different and substantial to show that it is sincere and means business. (Typically, while Russian reports mentioned a supposed DPRK offer of a moratorium on nuclear and missile tests, KCNA said nothing about this.) Yet the US does need to discuss and curb the DPRK’s uranium enrichment program. And however unfairly, to say you have no preconditions makes you sound the reasonable party. Hence South Korea and its allies will continue to mull what kind of engagement with North Korea is feasible; not least for fear of losing out as Kim cozies up to China and now Russia.

The second key agenda item involved energy and infrastructure cooperation, which for Seoul presents a new twist. KCNA was perfunctory in its report:

‘The talks discussed a series of agenda items on boosting the economic and cooperative relations in various fields including the issue of energy including gas and the issue of linking railways and reached a common understanding of them. It was decided at the talks to organize and operate working groups to put the above-said issues into practice and the two countries agreed to continue cooperating with each other in this direction’.

Yet to be fair, KCNA also reported Medvedev’s amplification of this in his banquet speech:

‘Cooperation among Russia, the DPRK and the Republic of Korea in carrying out the grand plans in the fields of infrastructure and power has a great prospect. I am convinced that to realize this cooperation would be beneficial to all our three countries and have a positive impact on providing a favorable environment for dialogue and confidence-building between the DPRK and the ROK’.

‘It is our common task to put an end to the confrontation between the north and the south that has lasted for more than half a century, I think’.

For KCNA thus to use South Korea’s official name — Republic of Korea, or ROK — is almost unheard of. It usually says ‘south Korea’ (note the lower case s), or as often as not ‘puppet clique’ and similar insults. Nothing in DPRK media happens by chance, so at the very least this suggests that Kim Jong-il is entertaining the idea — or dangling bait for the South to bite.

What is at stake here is twofold. Firstly, Russia and South Korea would like to link their rail systems — especially for freight. That involves crossing North Korea, as well as upgrading its decrepit and outmoded railway system, which will not come cheap. Tracks across the Demilitarized Zone (DMZ), the inter-Korean border, were rejoined in 2003 but are almost never used.

Secondly, in 2008 Lee Myung-bak and Medvedev — meeting in Moscow almost three years before the latter finally caught up with Kim Jong-il — announced with much fanfare a US$90 billion deal for Russia’s Gazprom to send gas to the ROK’s KoGas for the next thirty years. This would mean a pipeline across North Korea: an idea first floated over 20 years ago by the Hyundai group’s prescient founder, Chung Ju-yung. Yet the DPRK was not party to the Moscow announcement, which thus appeared oddly undiplomatic. It has taken another three years to bring Kim Jong-il on board — if indeed he is, as opposed to feigning interest.

For now, what is clear is Kim’s great tactical skill. He has waited to play the Russian card for maximum effect. Suddenly he has two friends again, not just one. China, through which he travelled home can hardly complain. Russia is keen on the rail and gas projects. These are also an offer which resource-poor South Korea can ill afford to refuse. Lee Myung-bak may hesitate, but Kim will not give him the pleasure anyway for two reasons: deep mistrust, and his being a lame duck. Lee’s five year term of office is drawing to a close: by early 2013 someone else will be in the Blue House. Whoever it be, they are unlikely to ‘nix’ gas from Siberia, despite the obvious risks that Pyongyang will play games, turn off the taps and so on. It is too early to be sure, but northeast Asian politics and economics alike might be entering a new era.

Aidan Foster-Carter is honorary senior research fellow in sociology and modern Korea at Leeds University, and a freelance consultant, writer and broadcaster on Korean affairs.

A longer version of this article first appeared in, and is used with the kind permission of, NewNations.com.

  1. Russia-North Korea: Denuclearisation of the Korean peninsula
  2. US and China playing hands over North Korea
  3. Third time unlucky: Carter snubbed again on Elders’ North Korea trip

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North Korea: Trilateralism in the pipeline?

Asean

ASEAN weathering the COVID-19 typhoon

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Vietnam's Prime Minister Nguyen Xuan Phuc addresses a special video conference with leaders of the Association of Southeast Asian Nations (ASEAN), on the coronavirus disease (COVID-19), in Hanoi 14 April, 2020 (Photo:Reuters/Manan Vatsyayana).

Author: Sandra Seno-Alday, Sydney University

The roughly 20 typhoons that hit Southeast Asia each year pale in comparison to the impact on the region of COVID-19 — a storm of a very different sort striking not just Southeast Asia but the world.

 

Just how badly is the COVID-19 typhoon thrashing the region? And what might the post-crisis recovery and reconstruction look like? To answer these questions, it is necessary to investigate the strengths and vulnerabilities of Southeast Asia’s pre-COVID-19 economic infrastructure.

Understanding the structure of the region’s economic house requires going back to 1967, when Southeast Asian countries decided to pledge friendship to one another under the ASEAN framework. While other integrated regions such as NAFTA and the European Union have aggressively broken down trade barriers and significantly boosted intra-regional trade, ASEAN regional economic integration has chugged along slower.

Southeast Asian countries have not viewed trade between each other as a top priority. The trade agreements in the region have been forged around suggestions for ASEAN countries to lower tariffs on intra-regional trade to within a certain range and across limited industries. This has lowered but not eliminated barriers to intra-regional trade. Consequently, a relatively significant share of Southeast Asian trade is with countries outside the region. This active extra-regional engagement has resulted in ASEAN countries’ successful integration into global value chain networks.

A historically outward-facing region, in 2010 around 75 per cent of Southeast Asian commodity imports and exports came from countries outside of ASEAN. This share of extra-regional trade nudged closer to 80 per cent in 2018. This indicates that ASEAN’s global value chain network embeddedness has deepened over time.

Around 40 per cent of ASEAN’s extra-regional trade is with the rest of Asia. From 2010 to 2018 Southeast Asian countries forged major trade relationships with four Asian countries: China, Japan, South Korea and India. Outside Asia, the United States is the region’s major trading partner. ASEAN’s trade focus on Asia’s largest markets is not surprising. Countries tend to establish trade relationships with large, geographically close, and culturally similar markets.

Fostering deep relationships with a few large markets, however, is a double-edged sword. While it has allowed ASEAN to benefit from integration in global value chains, it has also resulted in increased vulnerability to the shocks affecting its network connections.

ASEAN’s participation in global value chains has allowed it to transition from a net regional importer in 1990 to a net regional exporter in 2018. But the region’s deep embeddedness in a small and tightly-coupled network cluster of extra-regional global value chain partners has exposed it to disruption to any and all of its external partners. By contrast, ASEAN’s intra-regional trade network structure is much more loosely-coupled: a consequence of persistent intra-regional trade barriers and thus lower intra-regional trade intensity.

In the pre-COVID-19 period, ASEAN built for itself an economic house held up by just five extra-regional markets, while doing less to expand and diversify its intra-regional trade network. The data shows that ASEAN trade became increasingly concentrated in these few external markets between 2010 and 2018.

This dependence on a handful of markets does not bode well for risk and crisis management. All of the region’s major trading partners have been significantly affected by COVID-19 and this in turn is blowing the ASEAN economic house down.

What are the ways forward? The immediate task at hand is to get a better picture of the region’s position in global value chain networks and to get on top of managing its network risk exposure. Already there are red flags around the region’s food security arising from its position in food value chains. It is critical to look for ways to introduce flexibility into existing supply chains for greater agility in responding to crises.

It is also an opportune time for ASEAN to harness the technology transfer gains of global value chain participation and invest in innovation-driven diversification of products and markets. The region’s embeddedness in global value chain networks certainly places it in a strong position to readily access large export markets not just in Asia but also Europe and the Americas.

Over the longer term, ASEAN is faced with the question of whether it should seriously look…

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Asean

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