Kim Jong Un’s visit to Russia unlikely to meet leader’s expectations

Much attention has been attracted recently by the media reports about Kim Jong Un’s likely decision to come to Moscow in May. If such a visit does indeed happen, it will be an important turning point for a remarkably reclusive North Korean leader whose unwillingness to hold summits is, indeed, unusual.

There is little doubt about the reasons that have likely made Kim Jong Un choose Moscow as his first overseas destination. He wants to capitalize on the current rift between Moscow and the West, and is seemingly laboring under the assumption that, in the new situation, he will be able to secure Russian aid and state-supported investment. Unfortunately, this is based on a misunderstanding, but the outcome of the trip is still likely to be quite positive.

Together with China, Russia is often mentioned by the world media as North Korea’s “ally and sponsor”. However, these references are somewhat misleading. Contrary to popular perception, both Russian aid to North Korea and Russian trade with North Korea have been negligible since the early 1990s.

It will suffice to say that while North Korea’s trade with China has been steadily growing for two decades, reaching the level of $6.5 billion last year, Russia’s trade with North Korea has been stagnant around the meager $0.1 billion level (some 60 times smaller).

Such a disparity is easy to understand. The economies of Russia and North Korea are not really mutually compatible: the few competitive products North Korea can produce are of little interest for Russian businesses while North Korean companies have no money to pay for Russian imports (and most of Russian imports are of little interest to North Koreans anyway). Indeed, North Korea sells on the world market such items as coal and other minerals, fish and seafood – things not of especial value to Russians, who have their own huge deposits of useful minerals and do not share East Asians love for marine products. Another North Korean export, cheap labour, is attractive to Russia, but only within certain limits, since Russian companies prefer cheap labour from now impoverished post-Soviet states (the Uzbeks and Ukrainians speak fluent Russian, after all).

There are, of course, ambitious projects that involve using North Korea as a corridor to connect to the lucrative South Korean market. The much discussed idea of connecting South Korea with the Trans-Siberian railway via North Korea is a good example of such plans. It is telling, though, that the idea has been discussed for nearly two decades, with little if any actual progress being made. One should not be surprised that Russian companies are not too eager to invest huge amounts of money into projects in a politically volatile region where their efforts can come to nothing as a result of any international crisis – and if this happens, it is Russian investors who are likely to end up footing the bill.

Recently, however, the situation has seemingly changed. The Ukrainian crisis put Russia on a collision course with the West, so the world media often describes Russia as a revived Soviet Union. This description is misleading, but it has probably raised some hopes in Pyongyang. The North Korean reasoning is understandable: once upon a time, the Soviet Union was one of two rival sponsors of North Korea. From the early 1960s until the late 1980s, North Korean diplomacy skillfully played the Russians and Chinese against one another, getting aid from both sides, and giving little in return. It was a true masterpiece of diplomacy, conducted by North Korea’s founding father Kim Il Sung, so it is perfectly understandable that his grandson now wants to repeat this success.

This is more important because of tense relations between North Korea and China. It seems that the North Korean leadership do not like the near complete domination of China over their economy, and wants to do something about it. Using Russia as an alternative source of investment and a counter-weight to China looks very logical, especially now when Russia is seemingly ready to sponsor all anti-Western forces worldwide.

However, North Korean decision makers should be more skeptical about Western press reports. Whatever the media says, Russia is very different to the Soviet Union in many regards. One of the major differences is Russia’s attitude to the foreign policy. For the Soviet Union, foreign policy was an area to spend money. Driven by the considerations of ideology, prestige and geopolitics, the Soviet Union liberally dispersed money across the globe, rewarding friendly or at least, anti-Western and/or anti-Chinese regimes.

This is not the case anymore. One has to think hard to name a single country outside the former Soviet Union that has been a significant recipient of Russian aid in the last two decades. For post-Soviet Russia, foreign policy is an activity whose ultimate goal is to earn, not spend money. Now, when the domestic economic situation of Russia is getting tougher, this is even more the case.

So, North Korean diplomats will soon learn that Russians mean business when they are talking about  ‘mutually beneficial cooperation’. Indeed, Russia is likely to be interested in projects that will generate profits within a reasonably short period of time, but it is unlikely that it will ever provide much unilateral aid or excessively preferential investment.

No doubt, there are projects that have a good chance of succeeding – like, say, shipping Russian coal to South Korea and elsewhere from the North Korean port city of Rason. There might be some progress with Russian investment in the mining industry, though both sides have to overcome many potential obstacles in this area. But the message will soon become clear: Russia is not a welfare provider, if North Koreans want to make money from cooperating with Moscow, they will have to respect the reciprocity principle.

It might be bad news for North Korean politicians who for decades had grown accustomed to politically motivated investment (or, frequently, aid disguised as investment). However, this discovery might be useful. Perhaps, it will help them to better understand how the modern economy really works, and this is good.