Business Council Giving Practical Form to Russia-DPRK Ties?

By | February 01, 2015 | No Comments

Kim Jong-il's August 2011 trip to Russia drew modest comment from the South Korean media. Now, almost four years later, are the two sides trying to give economic form to bilateral political relations? | Image: Destination Pyongyang

Kim Jong-il’s August 2011 trip to Russia drew modest comment in the South Korean media. Almost four years later, are the two sides trying to give greater form to their economic relations? | Image: Destination Pyongyang

As part of its own “pivot” toward Asia, Russia has begun to build up ties with states on its southern and eastern flanks. China, India, and Mongolia are among those set to benefit from additional Russian energy sales and augmented defense cooperation. North Korea stands to gain as well, albeit in a more limited fashion. Even modest improvements to economic ties–like easing restrictions on Russian businesspersons conducting trade in North Korea–can have outsized effects on the North’s relatively weak economy.

The two sides recently moved their bilateral economic cooperation forward another step by announcing the creation of a North Korea-Russia Business Council. Moscow already has a similar council dedicated to fostering trade relations with South Korean firms, among others.

While the purpose of any transnational business council is to foster increased cooperation between enterprises, the North Korea-Russia variant has greater than average political implications, since North Korea has no de jure private enterprises, only state-owned and “Red Hat” companies, and the Russian business scene, while relatively privatized, is subject to considerable state involvement. Diplomatic and regional officials in Russia have already stated a broad commitment to fostering economic ties through the new business council, underscoring the link between politics and trade in the North Korea-Russia relationship.

The following is a translation of an article published by RIA Novosti.

“Russia and DPRK to Create Business Council” [Россия и КНДР создадут Деловой совет], RIA Novosti, January 22, 2015.

Russian citizens have already begun to receive multiple-entry visas to the DPRK, have already had their first financial transactions with North Korea in rubles, and are currently negotiating the creation of a special government organ tasked with the framework of joint projects with Russia.

KHABAROVSK, JAN. 22 – RIA Novosti. Russia and the DPRK will create a business council in the very near future, which will allow for improved interaction between the Russian and North Korean business communities, according to the Ministry for the Development of the Russian Far East.

“For the most comfortable working together and interaction between the North Korean and Russian business communities, a business council will be created next week,” in the words of a communiqué by the vice-president of the Russian Chamber of Commerce and Industry, Vladimir Strashko.

The head of the Ministry for the Development of the Russian Far East, Alexander Galushka, held a meeting on the realization of projects of Russian companies in the DPRK, in which officials from the Russian foreign and economic development ministries participated, as well as the management of Russian companies either already engaged in or planning to engage in activities in the DPRK. The minister also introduced to the businessmen the new Russian ambassador to North Korea, Alexander Matsegora.

“We had an intense year in 2014, but, in essence, it was preparatory. This year it’s important for us to move on to the phase of practical realization of previously achieved agreements,” Galushka is quoted as saying.

During the meeting it was noted that results were reached over complex bilateral questions. Russian citizens have already begun to receive multiple-entry visas to the DPRK, first settlement payments in rubles have been made, and currently negotiations are underway for the creation by the North-Korean government of a special organ tasked with the supervision of joint projects with Russia.

In addition to this, corporate leaders addressed the difficulties they must overcome to work in North Korea. The head of the Ministry for the Development of the Russian Far East and the Russian ambassador assured them of their readiness to lend full assistance.

“Every Russian project in the DPRK will be under daily control. Every request for help made at the ambassador’s end will be realized,” said Alexander Matsegora.

Source: “Russia and DPRK to Create Business Council” [Россия и КНДР создадут Деловой совет], RIA Novosti, January 22, 2015. Translation by Anthony Rinna.