Trade and Economic Cooperation
Traditionally Russian Federation is one of the key trade and economic partners for the DPRK. The Agreement on Economic and Cultural Cooperation between the USSR and the DPRK signed on March 17th, 1949, initiated development of mutual trade and economic ties. Though relations between our countries have experienced a substantial decline following the collapse of the Soviet Union, nowadays both sides are making efforts to promote mutual trade and investment ties.
In 2011 trade between Russia and the DPRK increased by 15.4% in comparison with 2010 and made up 113.7 millions USD. Russian export totaled 99.2 million USD (20.8% growth), import 14.5 millions USD (11.5% drop). The growth of trade amount was basically caused by the increase of energy resources share in Russian exports (33.4% in 2010, 40.6% in 2011) and high fuel prices as well as growing amount of food and agricultural supplies to the DPRK.
The main items of Russian exports to the DPRK were mineral fuel, oil and petrochemicals (40.3 million USD, 42.7% growth), food and agricultural goods (22.3 million USD, 36.1 times growth, 22.5% of Russian exports), metal and metal goods (10.3 million USD, 4-times growth, 10.4% share), machines, equipment and vehicles (9.5 million USD, 22.8% growth, 9.6% share), other goods (6.6 million USD, 43.7 times growth, 6.7% share).
Russian imports from the DPRK consisted of machines, equipment and vehicles (4.6 million USD, 37.3% drop, 31.8% of Russian import), chemicals (3.1 million USD, 68.6% growth, 21.2% share), mineral fuel, oil and petrochemicals (3.0 million USD, 35.0% drop, 20.9% share), textiles and footwear (2.2 million USD, 2.2-times growth, 15.2% share), other goods (1.0 million USD, 55.4% growth, 6.5% share).
In 2012 our trade began decreasing again. In January-October 2012, mutual trade turnover made up 68.3 million USD (31.0% decline), Russian export – 57.8 million USD (32.5% decline), import – 10.5 million USD (12.7% decline).
Russia and the DPRK undertake joint efforts to implement bilateral and multilateral economic projects such as construction of the gas pipeline from Russia to South Korea through the DPRK territory as well as electric power line using the same route and connection of the Trans-Siberian and Trans-Korean railways. At the moment working groups formed by specialists from JSC “Gazprom” and experts from the Ministry of Oil Industry of the DPRK are discussing technical aspects, regarding the implementation of the “Gas Project”.
JSC“Russian Railways” is completing its project on reconstruction of the Khasan-Rajin railroad. This pilot project is supposed to be the first step towards connecting the Trans-Siberian and Trans-Korean railways. Russian delegation led by senior vice-president of JSC “Russian Railways” V.I.Reshetnikov visited DPRK in July, 2012, to discuss issues related to the construction of intermodal terminal in the Rajin port. Members of the delegation met with Korean Minister of Railroads Chon Gil Su, Minister of Foreign Trade Lee Ryon Nam and the Chairman of the Joint Investment Committee of the DPRK Lee Kwan Gun.
If implemented, the abovementioned projects will be economically beneficial to all the participants, contribute to revitalization of Inter-Korean relations and maintaining stability on the Korean Peninsula.
The long-lasting process of Korean debt settlement, which used to be one of the most burdening problems that hampered the development of Russian-Korean trade and investment relations, is over at last. On September 17, 2012, two countries’ deputy ministers of finance signed the Intergovernmental Agreement on settlement of the DPRK’s debt to the Russian Federation on loans issued by the former USSR.
Intergovernmental Commission for Trade-economic and Scientific-technical Cooperation is doing its utmost to achieve mutually beneficial goals. Minister of the Russian Federation for the Development of the Far East and Presidential Plenipotentiary Envoy to the Far-Eastern Federal District V.I.Ishayev is appointed as a chairman of Russian side on June 26th 2012, while Minister of Foreign Trade of the DPRK Lee Ryon Nam chairs the Korean side. The Intergovernmental Commission operates a number of subcommittees on interregional, forestry and fishery cooperation.
Regulatory and legal principles for trade and economic relations between Russia and the DPRK were updated and revised. In January, 2012, both sides signed the Intergovernmental Agreement for Cooperation in Prevention Illegal, Unapprised and Uncontrolled Fishing.
On October, 2012, the Protocol of the Third Session of the Joint Russian-Korean Working Group on implementation of the Agreement between the Government of Russian Federation and the Government of DPRK on labor activity of the citizens of one state on the territory of another state, dated August 31, 2007,
On the other hand, Russian private companies show interest for entering yet untapped Korean market. Korean business is also looking for Russian partners interested in joint investment activities inside the DPRK.