Russia’s Far East is in many ways its “Wild West,” where hardened Cossacks some 350 years ago and young Soviets with courage and ambition, fewer than a hundred ― came to exploit Sakha diamonds and Sakhalin oil.
Today, Russia looks to tap this rugged frontier’s still-unrealized vast natural resources by increasing economic links with Korea in fields from energy and infrastructure to shipbuilding, and even in joint agricultural projects.
Its Far East will be the source of future economic growth for Russia, said Russian Ambassador to Korea Konstantin V. Vnukov.
“This region should be the fastest-growing area in Russia by virtue of its abundant natural resources,” he said in an interview with The Korea Herald at the Russian chancery on Wednesday, one week before his country celebrates 23 years as a market-oriented democracy on June 12.
Russian Ambassador to Korea Konstantin V. Vnukov gestures during an interview with The Korea Herald at theRussian chancery on Wednesday, one week before his country celebrates the 23rd anniversary of its National Day on June 12. (Philip lglauer/The Korea Herald)
“The focus of our general growth is located in these regions that are extremely rich in natural resources. Without this development, we will not be able to tap into the source for the greatest additional economic growth in the future,” he said.
That will mean a number of large-scale investment projects with Korean conglomerates to develop natural resources in the most remote areas of Russia.
A number of ventures are already taking place as Russia lifted its profile in East Asia by hosting the APEC Summit in Vladivostok in September last year.
That profile got an additional boost by giving Vladivostok an extreme makeover with new roads, two big sea bridges, reconstruction of the airport, a conference center and a university campus, all in preparation for the summit.
Russia’s international standing continues to rise with two huge international events slated in the coming months: the G-20 summit in St. Petersburg in September and the Winter Olympics in Sochi in February 2014.
Russian President Vladimir Putin laid out his vision for the future of Russia’s Far East to 2025 in a wordy policy paper titled the “Strategy of Social and Economic Development of the Russian Far East.”
Korean-Russian joint ventures are already underway.
POSCO is planning to develop Vanino Port, a major logistics hub located just north of Vladivostok, to expand shipping capacity for trade between Russia’s Far East and East Asian neighbors Japan and Korea, in particular to the Korean port of Busan.
Korean conglomerates are also interested in constructing a shipbuilding facility in the area. In Siberia, a daring agricultural venture with 10 Korean firms is growing soybeans and other crops on 100,000 hectares of farmland.
A multitude of projects like these and other ventures is adding up to massive investment in Russia’s Far East future.
Korean investment in Russia was $2.9 billion in 2012 but increased collaboration faces major challenges, according to one official at the Ministry of Foreign Affairs.
“We still need to discuss customs issues and labor issues with Russia to help companies interested in agricultural projects in Siberia,” said Oh Jin-hee, first secretary at the Eurasian Division of the ministry.
Minor hiccups, perhaps. Such regulatory and legal hurdles might be expected as well, considering the rapid increase in commercial interaction over the years.
Commercial links between the two nations have surged since diplomatic ties were first established in 1990. Two-way trade increased to $25 billion last year from negligible figures a little more than two decades ago.
Korea and Russia will meet to discuss agriculture, shipbuilding, energy and a slew of other pending bilateral topics at their annual Joint Commission on economic, scientific and technological cooperation in early July.
Vnukov estimated Korea and Russia can bump up those numbers to $30 billion annually by 2015. The Russian embassy under Vnukov has been active facilitating trade delegations from the 10 administrative regions of the Russian Far East.
Vladimir Milklushevsky, governor of Primorsky Krai which is home to the Far East’s largest city of Vladivostok, led an investment delegation to Korea.
“Our East Asian partners are key to development plans,” Vnukov said. “We have huge plans for developing this region.”
The Russian Far East, encompassing an area about two-thirds the size of the United States, is as vast as it is empty; such a huge area ― about 6 million square kilometers ― is home to just 6 million people.
Although the region is a vast storehouse of vital natural resources ― oil, natural gas, coal, gold, diamonds, timber, fish stocks and rare earth metals ― all of it remains untapped. The Russian Far East is a $100 billion economy, about 5 percent of Russian GDP.
Not too unlike the frontier experience for many Americans, the Far East occupies a space in the imagination of many Russians. A pivotal moment in the Russian Far East experience was the Russo-Japanese War in 1905. The Japanese routed the Russian navy, took control of the southern half of Sakhalin and cemented its dominance of East Asia, as well as control of Korea which it fully colonized five years later.
The Soviet Union managed to take back Sakhalin at the end of World War II, but the effects of the Russo-Japanese War remain to this day.
The Russian ambassador commemorates the sinking of a Russian cruiser at the start of the Russo-Japanese War by laying a wreath at the watery site in Incheon Bay for the stoicism displayed by the sailors in the face of overwhelming odds.
The cruiser Varyag was destroyed and 33 sailors killed in the Battle of Chemulpo on Feb. 9, 1904. “It is a part of our history,” Vnukov said. “From childhood, we learn about this tragic yet heroic event.”
By Philip Iglauer (
ephilip2011@heraldcorp.com)