Chairman & CEO Han Duck-soo of the Korea International Trade Association (KITA) said that Russia’s ‘Far East-Baikal Social-Economic Development Strategy 2025’ for the promotion of development of the Far Eastern Region and Korea’s Eurasia Initiative for ‘One Content, Creative Continent and Peaceful Continent’ tie in beautifully for the promotion of interests of the two countries and also China and North Korea.
Speaking at the opening session of the Korean-Russian Economic Forum at the Lotte Hotel in Seoul on Dec. 9, 1014 with the participation of Deputy Prime Minister Yuri Trutnev of Russia (concurrently Presidential Plenipotentiary Envoy to the Far Eastern Federal District) and over 100 members of the Russian Delegation, Chairman Han also disclosed that KITA is considering to establish an Innovation Incubator in the Russian Federation Far Eastern University as Korea and Russian can seek a win-win cooperation with the excellent basic science and technology of Russia and the ability of technology commercialization by Korean businesses, through which Korea and Russia could jointly explore market overseas. (See further details of Han’s speech toward the end of this Article.)
The Forum was aimed at producing an effective platform to discuss issues in trade and economic cooperation between Korea and the Russian Far East and to search for new growth potential in the state of present political situation.
Han’s address was followed by a speech by DPM Trutnev of Russia, who said, in part, “We are interested in cooperation in shipbuilding, the energy sector, infrastructure building, wood processing and raw materials.” Then he said that, besides natural resources, Russia was also interested in developing cooperation in the hi-tech industries, especially in biotechnology, nuclear physics and genetic engineering.
The Industrial Bank of Korea is reported to have suggested a plan to set up a joint fund for the development of infrastructure projects in the Far East. Reports also indicated that Korea was prepared to front US$1 billion to support projects to establish infrastructure for business in the Russian Far East, which is lagging behind the European part of the country in terms of development.
At the meeting, Ambassador Konstantin V. Vnukov of Russian in Seoul disclosed that leaders of the Russian Delegation to the Forum participate in the presentations for investment and economic potential of the regions and meet with high-ranking ministerial officials and heads of leading Korean businesses and that the Korean business circles continue to show great interest in the projects in East Siberia and Far East.
Then he said, “The large tasks for the regional economic integration of our countries were set during the summit meeting between President Vladimir V. Putin of Russia and President Park Geun-hye of Korea, which was held in Seoul on November, 2013. I believe that the Forum today will greatly benefit our efforts to fulfill these tasks with the utmost efficiency.”
The Forum was attended, from the Russian side, besides DPM Trutnev and Ambassador Vnukov, Governor Vyacheslav Shport of the Khabarovskiy Krai, Deputy Minister for Economic Development of Russia Stanislav Voskresenskiy, and Governor Vladimir Ilyukhin Kamchatka region, Governor Alexander Khoroshavin of Sakhalin, Governor Vladimir Miklushevskiy of Primorskiy Krai, Deputy Minister Maxim Shereykin of the Development of Far East of the Russian Federation, Director Mariya Nikitina of the Department of Transport of the United Company Rusal, Chairman Konstantin Basyuk of the Board of Directors of PJSC "Khabarovsk airport", Governor Egor Borisov of the Sakha Republic (Yakutia), Governor Vladimir Pechenyy of the Magadan region, Director Konstantin Ryzhkov of the Russian Direct Investment Fund, Professor Andrey Kovsh of the Saint-Petersburg State University, Partner Dmitry Magonya of “Art de Lex”, Group Vice President Anton Khodakovsky of Volga-Dnepr Group for Japan and Korea group of companies and Director Oxana Migitko of the Pepeliaev Group
From the Korean side was attended, besides Chairman Han, by Governor Choi Moon-soon of Gangwon Province, Governor Choi Moon-Soo of Gangwon Province, Moderator Lee Hwa-oon from the partner of "Yulchon", President Kim Seok-wan of Korea Institute for Eurasian Studies, President Kim Seung Dong of LS Networks, Senior Song Woong-Soon of Shin & Kim, Governor Nam Kyung-pil of Gyeonggi Province, CEO Yang Bong Jin of Hyundai Energy & Resources, Advisor Yoon Jong Ku of the Daewoo Shipbuilding & Marine Engineering and Director Shin Samsup of the Asia and Europe Division of the International Contractors Association of Korea.
Excerpts from the speech of Chairman Han Duck-soo of KITA:
I am pleased that the Korean-Russian Economic Forum is co-hosted by the Korea International Trade Association and the Trade Representation of the Russian Federation in Seoul on the theme of “Welcome to the Far East” and I extend my wholehearted welcome to more than one hundred members of the Russian Government and Business Delegation.
Cooperation between the Republic of Korea and the Russian Federation has been increasing with the passage of time and this is easily learned from the fast-increasing volume of trade between the two countries. It was only US$200 million in 1992 immediately after the diplomatic normalization. Last year, however, the trade volume recorded a whopping 113-fold increase with the total volume reaching US$22.6 billion. Russia is now the 10th largest trading partner of Korea.
With the Far East Region of Russia alone, Korea’s volume of trade exceeded US$8 billion this year as of September, which accounts for a 27.2% increase compared with the preceding year.
The Far Eastern Region of Russia accounts for 36% of the total land space of the entire Russian Federation and favorably compares to 28 times of the land space of the Korean peninsula. Reports say that more than 70,000 ethnic Koreans are living in the nine different local autonomous districts of the Region.
Korea is heavily dependent on the import of natural resources and there also are other reasons why the Far Eastern Region of Russia is important to Korea.
Energy, steel, minerals and timber of the Far Eastern Region of Russia are being directly shipped Sokcho and Donghae ports of the Republic of Korea from Vladivostok and Zarubino ports of the Far Eastern Region of Russia which also has railroad and other means of transportation such as Trans-Siberian and Baikal-Amur railroads.
Since the appearance of new opportunities for increased bilateral cooperation following the Korean-Russian summit meeting in November last year, a tripartite cooperation among Russia, the Republic of Korea and North Korea, through which Russian coal loaded from Khasan can be imported to the ROK via the Najin Port of North Korea, is getting a keen attention because such a three-party cooperation is also very important for the security of the Far East.
The Government of the Russian Federation is pushing ahead with the ‘Far East-Baikal Social-Economic Development Strategy 2025’ for the promotion of development of the Far Eastern Region. Likewise, the Government of the Republic of Korea is also pushing forward its Eurasia Initiative for ‘One Content, Creative Continent and Peaceful Continent’ and is considering it as a spring board of its future economic development.
The key cooperation partner for the Eurasia Initiative is none other than the Russian Federation. In the framework of the Eurasia Initiative, the Republic of Korea and the Russian Federation are no competitors to each other but partners seeking common prosperity in the international community.
At this time, I would like to make a few proposals for the Eurasia Initiative and vitalization of economic cooperation between Korea and the Far Eastern Region of Russia:
First of all, it is important to build a Northeast Asian logistics hub.
This is because smooth distribution creates value-added and employment opportunities, and improved distribution infrastructure reduces the costs of the businesses and encourages foreign businesses to make direct investment.
Incidentally, China, too, is seeking to secure a maritime route as part of its economic development plan of the three Northeastern provinces. China takes interest in the development of the Najin Port of North Korea and the Zarubino Port of Russia.
In this sense, I would say that the Russian Federation holds a key to the co-prosperity of the three parties, namely Russia, the Korean peninsula and the three Northeastern provinces of China.
The Zarubino Port of Russia is located in the vicinity of the borders of Russia, China and the Korean peninsula and it is necessary for the interested countries to try to transform Zarubino into a free port and for this purpose the interested countries need to push forward a cooperation project to improve the logistics/distribution infrastructure and improve customs procedures.
If the customs procedures are eased or simplified and customs duty reduction privileges are given for the cargo and passengers using the surface and railroad transportation means in Russia, the Korean peninsula and the three Northeastern provinces of China, the volume of logistics will increase naturally and this, in turn, will induce investors in the development of not only Zarubino but also its hinterland and the entire Far Eastern region.
There is still another important area for cooperation between Korea and Russia and it is the industry-education cooperation.
Last October, I visited Khabarovsk and Primorsky with a large delegation for the opening of the 7th Korean-Russian Business Dialogue. The Korea International Trade Association is considering to establish an Innovation Incubator in the Russian Federation Far Eastern University next year in cooperation with the government of Primorsky. It is important to seek a win-win cooperation between the excellent basic science and technology of Russia and the ability of technology commercialization by Korean businesses, through which Korea and Russia could jointly explore market overseas.
Fortunately, at this Korean-Russian Economic Forum are in store many possibilities of bilateral cooperation in the areas of trade and science-technology in the Far Eastern region to be discussed by outstanding speakers of Korea and Russia on a wide range of topics concerning the present status of Korean investments in the Far Eastern Region and the future outlook of investment. Through this Forum, I expect that both sides will help further vitalize and expand trade and investment between the two countries and yield many good business opportunities.
I extend my appreciation to all the people who have worked hard to prepare this Forum as well as the speakers and discussants. I would also like to take this opportunity to wish Deputy Prime Minister Yuri Trutnev and other members of the Russian Delegation to the Forum the best of health, happiness and many blessings during the year-end and New Year holiday season.
Excerpts from the address by Russian Ambassador Konstantin V. Vnukov:
It comes as no surprise when the attention of government bodies, businesses and academic circles of the Russian Federation and the Republic of Korea is drawn to the idea of Korean business participating in the development of Siberia, Russian Far East and Artic regions. A number of grand successes has been achieved in this sphere during the recent years.
Today’s Forum, dedicated to this theme, is yet another example of the various economic ties between the regions of the Russian Federation and the Republic of Korea becoming more and more important in the development of the relations of strategic partnership between our countries. In this regard I would like to underline the importance of the coordinating body for the development of economic ties between our countries, which is the Russian-Korean Joint Committee for economic, scientific and technical cooperation, with Co-Chairmen of whose are Deputy Chairman of the Government of the Russian Federation H.E. Mr. Yuri P. Trutnev and Vice Prime-Minister of the Republic of Korea and Minister for Strategy and Finance H.E. Mr. Choi Kyung-hwan.
The active efforts by both sides to expand the cooperation on the regional level resulted in the growth of investments to the Russian regions by many Korean businesses. A number of large-scale contracts were signed with the Governments of Sakha (Yakutia) Republic and the Republic of Buryatia for coal, oil and natural gas development; with the Governments of Kaluga, Sakhalin, Primorye and Kamchatka regions for infrastructural projects. Huge automobile construction projects were successfully realized in St. Petersburg, Vladivostok, Taganrog and Kaliningrad. Such growth of the regional cooperation between our countries has greatly benefited to the constant increase of trade volume and investments processes between Russian and Korea in the recent years, in spite of the financial and economic situation in the world.
The regional cooperation is steadily growing between legislative bodies and public organizations as well; the ties between our countries are getting stronger in the spheres of culture, education, medicine, sports and tourism.
For this process personal efforts of the Heads of the Russian regions are very crucial. Many of them during their visits to the Republic of Korea participate in the presentations for investment and economic potential of the regions and meet with high-ranked ministerial officials and heads of leading Korean businesses. And the Korean business circles continue to show great interest in the projects in East Siberia and Far East. Many of them being present today, on this Forum, is one example of this.
The large tasks for the regional economic integration of our countries were set during the summit between President of the Russian Federation Vladimir V. Putin and President Park Geun-hye of the Republic of Korea, which was held in Seoul on November, 2013. I believe that the Forum today will greatly benefit our efforts to fulfill these tasks with the utmost efficiency.
Let me wish the Forum to be a success and thank you for your attention.