It has been reported recently that a Russian-owned tanker, built to traverse the frozen waters of the Arctic, completed a journey from Europe to Asia this month, auguring the future of shipping as global warming melts sea ice. The specially-built ship completed the crossing in just six-and-a-half days setting a new record. The vessel was carrying gas from Norway to South Korea. Russian President Vladimir Putin congratulated the crew and energy company officials gathered on the ship's bridge.
Docked in the Russian port of Sabetta, Christophe de Margerie is the first vessel of a planned fleet of 15 icebreaking LNG tankers to be built by South Korean Daewoo Shipbuilding & Marine Engineering that will transport gas all year round. The event is symbolic against the background of the upcoming Russia-South Korean summit.
South Korean President Moon Jae-in is to visit Russia in September for a summit meeting with President Vladimir Putin. He will attend the upcoming Eastern Economic Forum (EEF) – a landmark international event scheduled to take place in Vladivostok on September 6-7. The regional forum is to bring together political and business leaders from Russia and other Asia-Pacific countries. The meeting is expected to be an important opportunity to discuss the problem of North Korea and new business opportunities in Russia's Far East. South Korea’s delegation includes 300 officials and business leaders.
Foreign Minister of South Korea Kang Kyung-Hwa met with Russian Foreign Minister Sergey Lavrov on August 25 in preparation for the event.
Seoul ranks among Moscow’s top three leading Asian foreign trade partners. According to the Russian Federal Customs Service, Russia-South Korea trade turnover reached $15.14 billion by the end of 2016, with Russian exports and imports totaling $10.03 billion and $5.11 billion respectively. In 2016, South Korea ranked ninth in Russia’s trade turnover. South Korea's exports to Russia totaled $4.8 billion, presenting a 2.1 percent increase in 2016, with imports totaling $8.6 billion, a 23.9 percent decrease. Russia ranks fifteenth among the Republic of Korea’s trade partners. According to the Republic of Korea Ministry of Trade, Industry and Energy, Russian direct investment volumes in the South Korean economy are totaling $196.26 million.
There are many ways to increase South Korean trade and investment in Russia. Potential projects could include joint exploration of the North Pole, developing shipping channels that cross the Arctic Circle, shipbuilding and energy development. The two sides have already agreed to establish a hotline between Seoul's trade agency KOTRA and Russia's Far East investment promotion arm. Talks are underway to launch a commercial ferry service that would connect the South Korean city of Gwangmyeong to China and Russia.
Struggling South Korean shipbuilders are finding opportunities in Russia as illustrated by the above mentioned landmark shipbuilding deal between Russian state shipping company Sovcomflot and Daewoo Shipbuilding to build LNG tankers capable of breaking ice.
There is another example of bilateral cooperation. ExoAtlet, a Skolkovo resident startup that makes exoskeletons that help disabled people walk again, has raised $2 million in private investment and state grants in South Korea. The company’s tasks in Korea include the creation of a high-quality manufacturing base to enter the markets in Asia and elsewhere, and the organization of the exoskeleton’s clinical trials on the local market.
This month, Glavcosmos and Glavcosmos Launch Services inked the first contract with the Korea Aerospace Research Institute to launch the Soyuz-2 carrier rocket with two South Korean satellites. Glavcosmos Launch Services was established by Roscosmos’ decision to commercialize launch services and is the launch provider entitled to sign commercial contracts for launching space vehicles from Russian cosmodromes with the use of the Soyuz-2 carrier rockets. The Korea Aerospace Research Institute is South Korea’s leading space exploration company.
The CAS500-1 and CAS500-2 space vehicles are Earth-observation models that will picture the Earth in panchromatic and multispectral modes with the use of the AEISS-C (Advanced Earth Imaging Sensor System) payload.
Russian-Korean cultural contacts, including those in the area of education, continue to develop steadily. South Korea annually receives about 100 Russian students, lecturers and researchers under various educational programs. Some Korean citizens study in Russia free of charge under federal budget scholarships, while some pay full tuition expenses.
About 200,000 Russian tourists visited South Korea in 2016, with over 166,000 people going there in 2015. In 2016, over 161,000 South Korean tourists visited Russia, with over 136,000 coming in 2015.
The development of good neighborly ties with Seoul is a key element of Moscow’s pivot to the East. Russian President Vladimir Putin announced his country's «turn to the east» in 2010. Since then, terms such as «pivot to Asia» and «turn to the East» moved from a strictly academic environment to popular newspapers and have been actively used by a large number of specialists as well as journalists ever since.
Integration within the Eurasian Economic Union, the SCO, the Russia-ASEAN and ASEAN-EAEU talks, national efforts to develop Siberia and the Far East – these are political components of Russia’s pivot toward Asia-Pacific. South Korea has an important role to play in the implementation of this policy.
There is a very important aspect of the issue that has received surprisingly little attention. Unlike other major US allies and pro-Western countries, Seoul has steadfastly refrained from imposing sanctions on Moscow. As a result, it can provide Russia with cutting edge technologies and engineering knowledge. The know-how is certainly comparable with what is on offer from German, US and Japanese firms. There is a gaping hole in the US-imposed sanctions regime. South Korean businesses can sign lucrative deals and make great profits.
By refusing to succumb to pressure, South Korea stands a lot to gain. Seoul sees the opportunities. The sheer size of the South Korean delegation coming to Vladivostok speaks for itself. There is much room for growth in Russian-South Korean economic relations. There is no doubt that the summit in Vladivostok will be a significant step forward on the way of developing the bilateral relationship.