NK must stop confiscation of Mt. Geumgang assets
The proposal for building a trans-Siberia gas pipeline linking the two Koreas is nothing new. South Korea and Russia signed the agreement in 2008. This week, North Korea also inked the same accord. The project is economically attractive but politically infeasible.
Russian President Dmitry Medvedev and North Korean leader Kim Jong-il endorsed the project during their summit Tuesday. The accord comes three years after President Lee Myung-bak signed the deal with the Russia leader. It is meaningful that the North is proactive in the deal.
The project has been up in the air since the Kim Dae-jung administration in 1998.
The otherwise attractive economic project would go nowhere without confidence-building between the two Koreas.
The South can save transportation costs by 30 percent. The North can earn more than $100 million yearly in toll fees on the gas transit. Russia can expand sales of its gas not only to Korea but also to other countries, including Japan.
The Seoul government has linked the project to inter-Korean confidence-building. It made it clear that the project will take place only after the North's denuclearization and apologizes for military provocations, including the sinking of the Navy frigate Cheonan and the shelling of the border island of Yeonpyeong.
Seoul can leverage the project as a way of breaking the deadlock in the inter-Korean impasse. Through negotiations over the project, Koreas can improve the current frosty relations.
The time has come for the South to separate politics from the economy. The South and Russia should prod the North into guaranteeing international investment rules. The North should immediately withdraw its threat to seize the South Korean properties and tourism facilities at Mt. Geumgang.
It is absurd for any outsider to invest in the country where guarantee of investment is in question. Even under the rule of separating politics from business, this basic code should be respected. No South Korean company would participate in the project without investment guarantees.
Moscow should wait until the North stops threatening to confiscate the South’s assets at Mt. Geumgang. Another concern is the perception that the pipeline project is risky because the North could cut it suddenly. This could make the South’s gas supply unstable.
Even if the North should block the transit, the South can still import it under the current method. Russia should secure leverage in case the North blocks exports.
Russia must seek ways of guaranteeing the unimpeded flow of its gas through the divided Koreas. It may take years before construction begins. Now is the time to start the talks, at least on the feasibility study.
The three nations can also resume talks to connect railways. China and Japan can also join in the railroad networking. The linked railroad would fuel the East Asian economy.
