In July 2017, the Moon Jae-In administration announced its New Northern Policy, aimed to create a new northern economic space and strengthen connectivity between Korea and the Eurasian continent. Vitalizing Korea–Russia economic cooperation is an important factor in realizing the policy. In this regard, Korea needs to come up with new economic cooperation measures which correspond to Russia’s socio-economic conditions, industrial policy and regional development plans. This study focuses on Russia’s Far East development policies and Korea’s measures to cooperate in the region. The Russian Far East has abundant natural resources and is situated relatively close to Korea. However, high living costs and poor housing and transport infrastructure conditions deteriorate the quality of life in the Far East, resulting in chronic depopulation. Moreover, the commodity-dependent industrial structure has to be improved and diversified for sustainable economic growth. Considering all these factors, this study suggests to seek cooperation in the Far East’s key and growing industries such as the mining, transport, fishery sectors. In addition, Korea can foster new cooperation projects in the high technology and services sectors.
The Far East development policy carried out in Putin’s third term was targeted mainly at regional development and investment promotion. The major achievements of the policy can be summarized as the establishment of an institutional base, such as with the advanced development zones, Vladivostok free ports and the Far East Hectares. The challenges in the coming years will be to specify development plans and investment projects, improve the business climate, and raise the quality of life, among others. The policy will continue in a similar manner during Putin’s fourth term as well, but with more focus on increasing the quality of life. Whether the ultimate goal of the policy will be successfully achieved is now up to whether the authorities can find appropriate ways to distribute benefits from development while efficiently managing the institutions that have been adopted.
China’s strategy towards the Far East has expansionary features, focusing on transport connectivity. China and Russia relations became stronger after the imposition of Western sanctions on Russia. The two nations formed a foundation for more detailed and practical economic cooperation by establishing funds for investment projects in various fields. The two sides are seeking new projects in the high-tech, manufacturing, agriculture and tourism sectors.
Japan’s strategy towards the Far East is to expand a business model that has been domestically successful and applying this to the Far East. Japan has traditionally concentrated its investment in the energy sector, especially in Sakhalin Oblast. Recently, however, the country is trying to employ its comparative advantage and know-how in the region, based on an 8-point cooperation plan.
Korea established a joint investment platform with Russia in 2013. Based on this, various projects such as the Vladivostok cold storage project, Zarubino port development, Nakhodka fertilizer plant, and Sovcomflot’s oil-tanker support services projects have been discussed. However, these projects were blocked from progress due to the West’s sanctions, lagging investment climate, and lack of experience in the Far East. Responding to this, Korea proposed the “9 bridge” strategy at the 3rd Eastern Economic Forum in September 2017. The strategy is under discussion between Korea and Russia.
Korea’s key cooperation directions towards the Far East are “9-bridge + α and trilateral cooperation between Russia, North and South Korea. The former is in the making for tangible results. The latter holds strategic importance toward forming the base for vitalizing Korea and Russia cooperation and joint prosperity in North East Asia. In fact, the trilateral cooperation is closely related with the ”9 bridge” strategy because the two already overlap in some sectors, namely in the areas of gas, railroad, electricity, etc.
Our policy suggestions are to: 1) prepare economic cooperation action plans by sectors and by stage (short-term, mid-term, long-term) under the umbrella of the “9-Bridge+α” strategy, 2) design Korea’s cooperation strategy towards the Far East, 3) formulate comprehensive strategy for the rapidly changing international environment in the NEA, 4) seek new forms of trilateral projects, 5) enhance cooperation between regional governments, and 6) construct channels for sustainable cooperation.