A Russian Far East Economic Status of the

A Study on Economic Cooperation between Korea and Russian Far East A Case of the Republic of Sakha Vasileva Kristina Department of Korean Studies Graduate School of International and Area Studies HANKUK UNIVERSITY OF FOREIGN STUDIES Contents CHAPTERS I. Introduction Research Background and Purpose Research Methodology The Structure of the Thesis II. Economic Status and Development Strategy of the Russian Far East Economic Status of the Russian Far East Trade Status between Korea and Russian Far East Present Investment of Korea and Russian Far East III.

Policies and Strategies for the Economic Cooperation between Republic of Korea and Russian Far East Development Strategy of the Russian Far East The Strategy of Social and Economic Development of the Far East and the Baikal Region until 2025 Development Strategy of the Republic of Sakha (Yakutia) Strategy of socio-economic development of the Republic of Sakha (Yakutia) for the period until 2030 Political strategies of Russian Federation and Republic of Korea IV. The Economic Cooperation between the Countries on the Regional Level A Case of the Republic of Sakha The First Foreign Economic Relations between the Republic of Sakha and the Republic of Korea Current Economic Status of Korea in the Republic of Sakha Cooperation between the Republic of Sakha and the Republic of Korea Suggestions for the cooperation between the Republic of Sakha and the Republic of Korea V. Conclusion Appendices Bibliography Introduction Recently, Russia is actively developing the Far East region and expressing its intention to accelerate the integration into Northeast Asia and Asia-Pacific regions. As for Russia-Koreas cooperation, it is developing dynamically in different fields such as economy, business, trade, education, science, and culture. In particular, the role of cooperation between two countries is growing in the Far East region. On June 2017, President Moon Jae-in talked about the trilateral cooperation of the Republic of Korea-North Korea-Russia for the Far East development and the importance of cooperation with Russia and instructed them to establish a committee for supervising the northern economy.

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As a result, in August there was established the Northern Economic Cooperation Committee. During Russia-Korea summit and the 3rd Eastern Economic Forum they represented the vision and policies for the northern regions, including the Russian Far East. Moreover, President Moon said that both countries should join forces and start their economic projects, indicating that South Korea will actively participate in the development of the Russian Far East. Research Background and Purpose Koreas greatest interest is observed in Far East and East Siberia due to its proximity to the Korean market and its abundant natural resources. For these regions, there are more opportunities to actively integrate with the neighbors of the Asia-Pacific region than for the central part of Russia. About the Russian Far East, the Republic of Korea can be a source of massive investment and a modern technology supplier. The Republic of Sakha has 20 of total natural resources of Russian Federation such as coal, natural gas, iron ore, gold, silver and diamonds.

Among the Korean companies LG International has first entered the Republic of Sakha in 1994. Besides LG, Hyundai Motors and SaltMedis are also among the companies that have entered the Republic of Sakha. The purpose of this study is to examine the policies and strategies, trade and investment situation between Korea and the Russian Far East. It investigates the economic cooperation between two states and examines the opportunities to improve the economic relationship between both sides focusing on the Republic of Sakha. Research Methodology The Northeast Asian strategy of the Russian Federation and the New Northern Policy of the Republic of Korea can provide a new opportunity for economic cooperation of both sides.

Moreover, it is important not only the intensification of contacts between the two countries, but also the special importance of interregional cooperation in the development of relations between them. Given the formation of a regional direction in the foreign policy of states, there is the importance of creating an economic interaction in the system of relations the country a region of another country. To study these processes, there is a need to consider the concept of region and international relations of regions. A region (a subnational or sub-state region) is a territory that is a part of the state, given a certain status for administrative functions, occupying a position between the state and local level of power and not being a subject of international law. Recently regions of states are actively entering the international arena, forming a system of international relations, in which they are the main actors. At the same time, in the system of international relations, they are secondary actors created by states.

States give their regions certain powers in the international sphere. It is with the permission of the state that the regions enter into various international relations with international organizations, states and their regions, local authorities of foreign states, foreign legal entities and individuals. The state strategy of regional development and regional policy should be the subject of deep political reflection. Domestic regions limit their external activities to economic, scientific, technical, humanitarian fields. This provision is enshrined in international law, reflected in the constitutions of various countries, political documents. Nevertheless, objective processes of the worlds development lead to the fact that relatively small territorial entities, such as intra-state regions, turn out to be politically influential.

Strengthening of regions and the degree of their independence in the international arena should proceed from a dialectical unity the state must coordinate its interests with the interests of the regions. Regions must observe the common foreign policy line of the state. According to Russian political scientists, in the conditions of the formation of a multipolar model of the world order, the role of regional factors in social production has increased. In the global geo-economic system, there have been trends in the formation of regional economic groupings that use local ethno-cultural and other features as a foundation for new development strategies. In international relations, states that can create an optimal balance between the processes of globalization and regionalization have the advantage. These two world trends are the main reasons for the exit of the regions of the state to the international arena and the formation of the international relations of the regions (IRR). The IRR are the relations carried out by the regions of states in the international arena in the sphere of trade, science, technology, economy, culture, education, health and in other areas, except for the political sphere. Considering the above, the active formation of a regional direction in the foreign policy of states and in international relations determines the relevance of studying international relations of the regions.

In recent years, the attention of researchers to this topic has increased. At the same time, the problems of economic interactions in the system of relations the country – the region of another country remains insufficiently studied. An important component of bilateral economic ties, as well as a significant factor in stimulating the social and economic development of the territories is interregional cooperation. Analyzing the degree of coverage in the scientific literature of the regional section of Russian-Korean cooperation, it can be noted that the problems of cross-border cooperation between the Russian regions of the Far East and Korean provinces are being studied quite actively. At the same time, there are relatively few works devoted to the analysis of the involvement of other regions in the processes of cooperation with Korea. In general, the topic of Russian-Korean cooperation in its regional dimension remains insufficiently studied, its emphasis is mainly on cross-border interaction.

In connection with this, the study is expected to investigate the scope and forms of economic cooperation between Korea and the Russian Far East, focusing on the Republic of Sakha that is the center for the development and cooperation based on the natural resources in the Far East. The Structure of the Thesis II. Economic Status and Development Strategy of the Russian Far East Economic Status of the Russian Far East Figure 2.1 Administrative territory of the Far East Federal District Source Regions of Russia. Main characteristics of the subjects of the Russian Federation (http//www.gks.ru/wps/wcm/connect/rosstat_main/rosstat/ru/statistics/publications/catalog/doc_1138625359016) As shown on the map, the Far Eastern Federal District occupies over 36 of the area of the Russian Federation. Its administrative center is Khabarovsk.

The Far East of Russia is one of the most remote from the center of the Russian territories, representing the contrast of natural, geographical, climatic, demographic, socio-economic, cultural and transport conditions. All this is in close interweaving and mutual influence. The modern Far East, first of all, is perceived as a new economic space that possesses huge mineral, biological and recreational resources.

Moreover, the Far East has access to the Pacific and the Arctic oceans, has a border with four states China, Japan, U.S. and China. Most of the territory of the Far East belongs to the zone of the North with extreme natural conditions.

There are nine subjects of the Russian Federation in the Far East of Russia regions located in the south of the Far East of Russia along the northern border of China – the Amur Region, the Jewish Autonomous Region and the Khabarovsk Krai northern territories of the Far East, referred to the regions of the Far North – the Republic of Sakha (Yakutia), Chukotka Autonomous Okrug, Magadan Region regions related to the integration zones of the Asia-Pacific region Primorsky Krai, Kamchatka Krai and Sakhalin Region. In order to more effectively assess the main socio-economic indicators of the development of the Far Eastern Federal District of the Russian Federation, first of all, it is necessary to analyze the dynamics of the population of the district. Analyzing the population of the Far Eastern Federal District for the period from 2005 to 2016, it is possible to trace a clear tendency to reduce the population level.

So, for 11 years the decrease in the population of the district was 4.77, which in absolute terms was 310.2 thousand people. During this period, there were no outbreaks of population growth in the Far Eastern Federal District. In 2016 the population was 6 189 thousand people.

Compared with the previous year, the drop in the level of population was 0.23, namely 14.2 thousand people. For the entire period the lowest rate of decrease in the index was noted in 2016. Table 1 Table 2.1 The population of the Far Eastern Federal District for the period from 2005 to 2016. (th.

people) Source Federal Service of State Statistics of the Russian Federation Electronic resource Throughout the analyzed period, a constant decline in the number of people was noted in all regions except the Republic of Sakha (Yakutia) and the Chukotka Autonomous Okrug. Some growth jumps were observed in these territories. In the Republic of Sakha (Yakutia), the population growth was observed three times, in 2010, 2015 and 2016. In 2010, compared to the previous year, 4.5 thousand people, which in relative terms amounted to 0.47, in 2015 the increase was only 0.25, and in 2016 it was 0.

30, which in absolute terms is 2,9 thousand people. Concerning the level of unemployment in general, the Far Eastern Federal District is also experiencing a significant decline, as in all regions of the district. In general, in the Far Eastern Federal District, for the entire analyzed period from 2005-2016, the unemployment rate decreased by 2.1 and amounted to 5.8 in 2016. From the diagram below, it follows that, from 2010 and until now, the gradual decline in the unemployment rate continues. Having built a trend line, it can be said that the decrease in the unemployment rate will continue even further, both in the Far Eastern Federal District as a whole and in all regions of the district. Diagram 2.

1 The dynamics of the unemployment rate in the Far Eastern Federal District for the period from 2005 – 2016, . Source Federal Service of State Statistics of the Russian Federation Electronic resource Regions of the Far East are part of the Far Eastern Federal District, which was established in 2000. For the more effective socio-economic development of the Far Eastern Federal District, state programs are required. For the development of the Far East in 2009, the state program Strategy of social and economic development of the Far East and the Baikal region for the period until 2025 was developed, which was operating nowadays. In 2014, a special federal agency was established – the Ministry of the Russian Federation for the Development of the Far East.

Trade Status between Korea and Russian Far East Transformation of the role and importance of foreign trade, which already today is becoming one of the most important elements of the regional economy, is able to exert a decisive influence on the long-term prospects of the economy, which raises the question of the opportunities for the outwardly oriented economic development of the Far East, which calls for the activation of its foreign economic, and primarily foreign trade cooperation. In the trade and economic ties of the Russian Federation with the Republic of Korea, the Far Eastern territories occupy a significant place. Through them comes the vast majority of Russian exports to Korea and a significant portion of imports from Korea. As key indicators, we consider the foreign trade turnover, exports and imports of the Far Eastern Federal District and South Korea. Foreign trade turnover grew by 22.5 in 2017 of the previous year. Due to this orientation, sanctions and food embargoes related to the crisis in Ukraine did not have a strong influence on the foreign trade of the Far Eastern Federal District.

In 2015, the Far East Federal District experienced a decline in foreign trade activity, a sharp decline in both physical and value imports, largely due to lower oil prices, a fall in the ruble exchange rate, and a decrease in external demand. Diagram 2.2 Dynamics of Foreign Trade of the Far East of Russia and South Korea from 2015 to 2017 years (th. U.S. dollars) Source Federal Service of State Statistics of the Russian Federation Electronic resource In 2016, there was a significant decrease in exports to the Republic of Korea – by 16.4, and in 2017 there was an increase of 20.6.

The main reasons for this growth are the restoration of prices for hydrocarbons, especially crude oil and coal, as well as the positive dynamics of the ruble exchange rate in the first half of the year, which affected the growth in purchases of South Korean goods. As a result of the first half of 2017, more than 78 of the total volume of Russias exports accounted for mineral products, including fuel and energy products. Compared to the same period last year, their share in exports increased by 2, and in value terms, shipments increased by 45.6. The main deliveries to South Korea are crude oil and petroleum products, coal, oil gases, distillates and spent oil products.

Diagram 2.3 Koreas Export Trends in the Far East Russia from 2006 to 2017 years (million U.S. dollars) Source official site of Federal Customs Service, Far Eastern Customs Administration, URL HYPERLINK http//dvtu.customs.

ru/ http//dvtu.customs.ru/ The major export destinations in the Russian Far East are Korea 32, Japan 30, China 19.

Three countries account for more than 80 of the Far East total exports. Japan was in the first position until 2006, and China since 2007, the largest Far East exporter, which had impact of import duties on car imports. The level of exports of the Republic of Korea is significantly higher than Chinas exports to the Far Eastern region of Russia, but lower than Japans.

In 2017, the Republic of Korea exported US 967.3 million, or 15.4.

The increase in exports by 333.5 million US dollars (1.5 times) compared with the previous year. The main export items are liquid pumps – 14.

2 bulldozers, excavators, etc. – 9.0 centrifuges, filtration units – 8,9. Russias Far Eastern trade in 2014 fell 2.7 year-on-year. It shows 1.6 increase in exports and 12.

8 decrease in imports. The sharp decline in the value of the ruble due to the fall in energy resources such as petroleum gas and economic sanctions in the wake of the Ukrainian crisis. Diagram 2.4 Koreas Import Trends in the Far East Russia from 2006 to 2017 years (million U.S.

dollars) Source official site of Federal Customs Service, Far Eastern Customs Administration, URL HYPERLINK http//dvtu.customs.ru/ http//dvtu.customs.ru/ In imports, Korea is the largest importer. In 2017, the level of imports of the Republic of Korea amounted to 6 138.

1 million US dollars or 27.6. There was an increase in value by 1,267 million (26.0) than in 2016. The main items of export are oil and oil products, fish and gas. The main region of imports in the Far East of Russia is Sakhalin.

It imports crude oil and liquefied natural gas LNG that greatly increased. Present Investment of Korea and Russian Far East Unfortunately, so far the Russian Far East of Russia cannot boast of abundance of large joint projects with the Republic of Korea, especially in the investment and high-tech spheres. Basically, economic interaction between our countries is reduced to trade.

Moreover, Russia supplies mainly raw materials to Korea, and receives machinery, equipment, and consumer goods. Diagram 2.5 Investment from the Republic of Korea to Russia from 2000 to 2016 years (th. U.S. dollars) Source Export-Import Bank of Korea The direct foreign investment of the Republic of Korea to Russia demonstrated a rapid growth from 2006 to 2009, but then investment activity declined sharply due to the consequences of the global financial crisis.

At the end of 2016, the accumulated volume of Korean FDI to Russia amounted to 2.5 billion. In the overall structure of FDI in the Republic of Korea, the share of Russian investment fell from 1.38 (334 million) in 2010 to 0.32 (110.

4 million) in 2016. Korean investments in Russia mainly go to the electronic, automotive, food and service industries. Due to the stagnation observed in recent years in the Russian economy, the number of new legal entities of the Republic of Korea entering the Russian market is gradually decreasing in 2007 – 52 companies, in 2008 – 62, and then in 2014 – 21, in 2015 – 18, in 2016 – 17. Among the recent deals, Lotte Group bought from the Korean corporation Hyundai its hotel and agricultural business in Primorsky Krai. In this case, however, it is not about new investments, but about changing the owner of long-existing objects. So, it was transferred to Lotte hotel in the center of Vladivostok that was built in the mid-1990s and was still the only five-star hotel in the capital of Primorsky Krai. Lotte Group declares its intention to expand its business in this region.

In particular, they are talking about the establishment of a network of cafes, the construction of another hotel, as well as an entertainment park Lotte World. But these are only plans that have yet to be translated into real investment. The concentration of South Korean investments in the Far East is more closely related to geographical proximity to the Korean peninsula. This region, which occupies 35 of the territory of Russia, with a population of only 7.3 million people, is remote from the political and economic centers of Russia, and economically underdeveloped.

But for the Korean businessmen this region is attractive. Historically, a large number of ethnic Koreans have inhabited this region, and the Far East is rich in its natural resources, including minerals, forest and fish resources. How can it be explained the relatively low level of investment and technological investment of South Korean business in the Far East, despite the measures taken to increase the investment attractiveness of the region Transnational business goes, first of all, to those countries and regions where it is possible to receive substantial profits with minimal risks. Unfortunately, there are not so many economic sectors in the Far East that meet these criteria. Apparently, in the perception of many South Korean companies, the risks of investment in Russia so far exceed potential benefits. Expanding American sanctions against Russia creates negative background. It is no secret that the Republic of Korea always listens attentively to American Governments opinion, and South Korean big businesses are extremely sensitive to sanctions risks. In the foreseeable future, the importance of the U.

S. as a political and economic partner for Korea will remain. This creates a serious barrier, given that U.S. sanctions affect the fuel and energy complex, finance, high technology – that is, those sectors where Russia would like to interact with South Korea. In addition, there are a number of large Russian companies and entrepreneurs in the U.S. sanctions lists, which also complicates their potential deals with South Korean partners.

III. Policies and Strategies for the Economic Cooperation between Republic of Korea and Russian Far East Development Strategy of the Russian Far East The Strategy of Social and Economic Development of the Far East and the Baikal Region until 2025 The strategy of socio-economic development of the Far East and the Baikal region until 2025 year was developed in accordance with the request of the Government of the Russian Federation on October 24, 2008 and approved by the decree of the Government of the Russian Federation on December 28. This strategy covers the planning of the development of the constituent entities of the Russian Federation in the Far Eastern Federal District (Far East), as well as three constituent entities of Russia that are part of the Siberian Federal District – the Republic of Buryatia, the Trans-Baikal Territory and the Irkutsk Region. The Strategy of Social and Economic Development of the Far East and the Baikal Region until 2025 contains – an assessment of the current state, main challenges and problems of social and economic development of the Far East and the Baikal region – the main goals, objectives of the strategy, the basic scenario of development, mechanisms and tools for implementing the strategy for social and economic development of the Far East and the Baikal region – the state and prospects for the development of transport, energy, information, telecommunications and social infrastructure of federal significance – socio-economic development of the subjects of the Russian Federation located on the territory of the Far East and the Baikal region – current status and prospects for the development of basic economic sectors and cross-border cooperation of the subjects of the Russian Federation with the northeastern provinces of China and Mongolia, as well as economic interaction with other countries of Northeast Asia Source electronic version of the State Program The Strategy of Social and Economic Development of the Far East and the Baikal Region until 2025 A new model for the development of the Far East is based on exports to the countries of the Asia-Pacific region of finished goods (works, services) produced in the Far Eastern Federal District, creating a competitive investment climate, attracting direct investment, including foreign investment, business growth, small and middle entrepreneurship, creation of competitive territories of advanced development. The new model also provides for the reorganization of the system for managing the social and economic development of the Far East to bring it in line with the tasks of developing the eastern territories of the Russian Federation more rapidly. In accordance with these documents and taking into account the new model for the development of the Far East, the following priorities of the state policy in the implementation of the Program are formed – to create in the Far East of competitive (in comparison with neighboring countries of the Asia-Pacific region) conditions of economic activity necessary for outstripping development of the economy and social sphere – to ensure a large-scale inflow of investments into projects implemented in the Far East – to develop transport infrastructure to ensure the development of the Far East and increase the mobility of its population – to develop foreign economic relations with the countries of the Asia-Pacific region – to consolidate the population in the eastern regions of the country on the basis of raising the level and quality of life of the population on its territory, as well as the effective management of migration processes and the development of human capital. The main objectives of the Program are – to raise the level of social and economic development of the Far East and the Baikal region – to ensure the need for labor resources and securing the population in the Far East.

According to the economist of the Russian Academy of Sciences, P. Minakir (2017), since 2013, the foundations of the state policy to stimulate the development of the eastern regions have been revised in connection with the manifested problems that hampered the success in the development of the region. First, the overall macroeconomic situation in the country has worsened and the federal budget has been redistributed in favor of non-economic items. It was impossible to maintain a high level of public investment in the regions economy, and the main corporate projects were completed.

Secondly, maintaining a high level of growth in the Far East assumed a constant increase in the cost of budgetary resources. After the crisis of 2009, this became impossible in the context of a reduction in the potential for growth in the revenue side of the state budget. Thirdly, injections of investments from the state budget, given their specific size and growth rates, are able to provide the Centers anticipated growth rates of growth of the regional economy in comparison with the national rates. But at the same time, it is impossible to achieve the actual development of the region, which involves changing the quality of the social, communal and business environment in the region, creating mechanisms within the regional generation of revenues, ensuring that alternative spending exceeds alternative incomes combined with effective mobility of citizens and economic resources. This result implies a transition to the cultivation of efficient economic institutions, accompanied, rather than proceeded by financial injections. In connection with a clear understanding of these interrelated problems, as early as 2013, the focus on Russias eastern policy has changed. It began to be built as two independent, but related fragments 1) Further development of export infrastructure to increase the scale of foreign trade operations of Russian exporters to the east.

2) The transition from increasing public investment in production and infrastructure projects to the introduction of institutional innovations in the Far East, which are designed to make the region prosperous and modern by improving human capital, attracting the population and private entrepreneurship, both from Russia and from abroad. The creation of the foundations of a single institutional platform for integration with the countries of the Asia-Pacific Region and at the same time the prerequisites for attracting private investment for the development of the Far East is a major task since 2014. Several institutional innovations have been proposed for its solution, which for the first time since 1987 were given the status of federal laws. One of such innovations, which is proposed as an absolutely new and certainly an effective development tool, is the concept of the territories of advanced development (in Russian, TOR), within which the state provides development of basic infrastructure in selected territories, as well as provides tax and administrative benefits. Regional development involves the fulfillment of a number of conditions, including the modernization of the communal and social environment, the improvement of the quality of life of the population, the growth of the general level of income, the transformation of the transport and social infrastructure, the compaction of the labor market, the creation of settlement places, etc. This cannot be achieved only by institutional innovations.

It needs large-scale investments, and not in the backbone infrastructure, but more in the communal, social and market infrastructure. There are also strategies at the regional level. The strategy of social and economic development of the regions is viewed as a system of planned activities aimed at the implementation of long-term regional goals. Regional strategies should also take into account the development objectives of the state and the rational contribution of the regions in meeting these challenges. Next, I will conduct the main characteristic of the regional strategy program, on the example of the Republic of Sakha (Yakutia).

Development Strategy of the Republic of Sakha (Yakutia) Strategy of socio-economic development of the Republic of Sakha (Yakutia) for the period until 2030 The Republic of Sakha (Yakutia) fulfills its special role – a source of unique and necessary for world civilization experience of peoples living in extreme natural and climatic conditions and preserving the traditional northern culture of environment. The strategic goal of the social and economic development of the Republic of Sakha (Yakutia) by 2030 is a geopolitically significant leader of the Far East and the Arctic zone of the Russian Federation, a republic comfortable and safe for the full realization of human capital with a unique natural potential, a magnet of technologies for living in low temperatures and vast territories. This strategy is implemented in the system of following strategic priorities 1. Development of human capital.

2. Spatial organization of resettlement and productive forces, ensuring cluster activation based on a full range of industries, innovations and infrastructure. 3. Preservation of nature for future generations and the world.

4. Transparent system of governance of the republic, which meets modern requirements and deserves the confidence of the population. Implementation of the strategy is expected in four stages I stage – 2017-2019 years, II stage – 2020-2022 years, III stage – 2023-2025 years, IV stage – 2026-2030 years. The strategy of socio-economic development of the Republic of Sakha (Yakutia) for the period until 2030 with the definition of the target vision until 2050 defines the main directions, mechanisms and tools for achieving the long-term goals of social and economic development of the Republic of Sakha (Yakutia), taking into account the national goals, priorities of strategic development, defined in the Strategy for socio-economic development of the Far East and the Baikal region until 2025.

Political strategies of Russian Federation and Republic of Korea In order to highlight the conditions for Russian-Korean cooperation in the Far East, there is a need to analyze the relationship between Russias Far Eastern policy and the New Northern Policy of President Moon Jae-ins government. The Concept of the Foreign Policy of the Russian Federation The development of the Far East within the framework of the Far Eastern policy of Russia is closely connected with the strengthening of cooperation with the states of the Asia-Pacific region. In Article 4 of The Concept of the Foreign Policy of the Russian Federation emphasizes that the modern world is undergoing a period of profound changes, the essence of which lies in the formation of a polycentric international system. The structure of international relations continues to become more complicated. As a result of the process of globalization, new centers of economic and political influence are emerging. There is a dispersal of the worlds potential for strength and development, its shift to the Asia-Pacific region. The opportunities of the historical West to dominate the world economy and politics are being reduced. The concept defines Russias priorities in solving global problems, as follows – the formation of an equitable and sustainable world order, with the leading role of such an institution and a tool for solving international problems, such as the United Nations – the rule of law in international relations, which is called upon to ensure peaceful and fruitful cooperation of states while respecting the balance of interests, as well as the freedom of stability of the world community as a whole – strengthening of international security, preferring the political and diplomatic resolution of regional conflicts on the basis of collective action by the international community, proceeding from the fact that the resolution of such conflicts is possible through the involvement of all parties in the dialogue and negotiations, and not through the isolation of any of them – international economic and environmental cooperation, which will contribute to the formation of a trade-democratic, trade-economic and monetary-financial system in the world, sustainable socio-economic development of states, as the most important prerequisite for the formation of a more effective and crisis-sustainable international system The main tasks of the Concept are active participation in the integration processes in the Asia-Pacific region, the use of its capabilities in implementing social and economic development programs in Siberia and the Far East, in creating a comprehensive, open, transparent and equitable architecture of security and cooperation on a collective basis in the region .

In other words, the development of the Russian Far East involves cooperation with the countries of the Asia-Pacific region. In the Concept-2016, the goals and objectives of Russias foreign policy towards the states of the Korean peninsula were described in Article 89, as follows Russia, interested in maintaining traditionally friendly relations with the Democratic Peoples Republic of Korea and the Republic of Korea, will seek to reduce the level of confrontation, ease tensions on the Korean peninsula, and achieve reconciliation and development of inter-Korean cooperation through the development of political dialogue. Russia invariably stands for the denuclearized status of the Korean peninsula and will do its utmost to denuclearize it, on the basis that the six-party talks are the means to achieve this goal. The Russian Federation will continue its efforts to establish a mechanism for maintaining peace and security in Northeast Asia, and will also take measures to expand economic cooperation in the region. New Northern Policy of the Korean government President Moon attended the 3rd Eastern Economic Forum held in Vladivostok, Russia, in early September. President Moon first praised the New East Policy pursued by Russias President Vladimir Putin and suggested the 9-Bridge linking Korea and Russia as simultaneous cooperative strategies. In particular, President Moon emphasized that Korea should continue to develop economic cooperation with the northern regions, including Russias Far East. For these purposes President Moon expressed his firm commitment to pursue the vision of the New Northern Policy and to pursue it as a national task through the Northern Economic Cooperation Committee that was established as a presidential organization.

In July 2017, the Blue House held the Report on the 100 Major National Tasks, which contains the Presidents five-year. According to the overview of the 100 major tasks announced by the Council for Government Planning and Advisory, the government set its vision as a country of the people and set five goals, 20 strategies, and 100 national tasks. The diplomatic and security fields among the top 100 national tasks have been set as 16 strategies under the three goals of the national goal of peace and prosperity of the Korean peninsula. The three strategies are strong security and responsible defense (five tasks) inter-Korean reconciliation and denuclearization of the Korean peninsula (six tasks) dignified diplomatic strategies (five tasks) that lead international cooperation. Next, there is need to analyze the issues that are closely related to the New Northern Policy implementation strategy.

Among the 100 major national tasks, the 90th task is the New Economic Plan of the Korean Peninsula and the Realization of Economic Unification, which is classified as the Unification Ministrys duty. The objective of the project is to establish a basis for economic exploration and economic unification by resuming inter-Korean economic cooperation, planning a new economic plan for the Korean peninsula, and aiming for a market cooperation between the two Koreas. The main point is to connect the two Koreas and the East and the West with the three largest economic belts in the form of H to secure new economic growth engines on the peninsula and create a prosperous economic community.

Through this, the economic foundation of the common prosperity of North and South Korea will be established, the foundation of economic integration will be improved, and the linkage with the northern economy will be promoted. The three belts are shown on Figure 1. Figure 1. The Korean Peninsulas New Economy Map The Korean peninsula is a key message to North Koreas policy of persuading North Korea to stop military provocations such as nuclear weapons development and missile tests, and to lead to peace and prosperity. The Korean Peninsulas New Economy Guideline Plan contains the vision and direction of Northeast Asia Economic Cooperation.

This vision is a vision to integrate the Korean economy, which is confined by the division, into the North and integrate it into the continent to make the Korean Peninsula a hub of economic cooperation in the region. Furthermore, Article 98 of the National Security Task Force, Formation of a responsible community in Northeast Asia, presents the implementation of the new North Korean policy as a direct goal and assigns it as a policy goal and a major task of the Ministry of Foreign Affairs (MOFA 2017). The goal of this task is to create an environment of peace and cooperation that is favorable to the survival and prosperity of our country in the geopolitical tensions and competitive landscape in Northeast Asia. It will build a platform for peace cooperation in Northeast Asia as a peace axis that will expand the foundation of peace, and promote the new and new policies that will make the southern and northern regions beyond Northeast Asia a prosperity axis. The implementation of the new northern policy implies a continental strategy to strengthen Eurasia cooperation. This includes promoting the Republic of Korea-North Korea-Russia linkage projects such as the Najin-Hassan logistics business, railway and power grid, and concluding a free trade agreement (FTA) between the Korea-Eurasian Economic Association (EAEU). The task of the national affairs of forming a responsible community of Northeast Asia is based on the 97th national task of promoting diplomatic cooperation with the four countries around the Korean peninsula. Moon Jae-in intends to pursue a dignified and active cooperation diplomacy that strengthens cooperation with China, Japan and Russia centered on the alliance.

In particular, with Russia, which is a major partner in the New Northern Policy, Korea will strengthen its strategic communication and economic cooperation for resolving the North Korean nuclear issue and promote the practical development of strategic partnership with Russia. To achieve this goal, it is seeking to revitalize high-level exchanges between Korea and Russia, expand development cooperation in the Far East, and expand future growth engines such as the development of the Arctic, energy and FTA. There are various points of contact between Korea and Russia that can influence on resolving the North Korean nuclear issue to promote peace and stability on the Korean Peninsula and to develop Siberia in the Far East and achieve common prosperity in Eurasia. IV. The Economic Cooperation between the Countries on the Regional Level A Case of the Republic of Sakha Developing economic ties with foreign partners, the regions create conditions for enterprises to enter new markets, attract investment, access to modern technologies, etc. Expanding the capacity of regions to find resources on the international arena to solve the local problems facing them has positive consequences not only for the regions themselves, but for the state as a whole.

The Russian government has made the economic policy based on innovation and the education of human resources, as well as the improvement of the investment environment and infrastructure. At the same time, the government hopes to expand economic cooperation with Northeast Asian countries. As part of its energy and export diversification policy, Russia has in recent years exhibited an open attitude toward the expansion of economic cooperation with Asia, especially the Northeast Asian countries. Therefore, there is a high expectation for a win-win outcome of the partnership between Russia and Korea.

Korean exports to Russia totalled 4.7 billion dollars in 2015, accounting for 0.9 of Koreas overall exports meanwhile, imports from Russia totaled totalled. 11.3 billion dollars, or 2.

6 of overall imports. Furthermore, Koreas investment in Russia in 2016 is estimated at 2.5 billion dollars. Over the years, the scale of Korean-Russian economic cooperation has increased, and the range of spheres of interaction has expanded – this is an indisputable fact. However, the level of cooperation itself does not match neither the potential of the Republic of Korea, which is among the economically developed countries, nor the enormous potential of Russia. This is evidenced by the low specific weight of the Russian Federation in the structure of Koreas foreign trade (1-2), the low share of Russian investment in total FDI in South Korea (less than 1), and the low level of Korean business involvement in resource development projects and construction of infrastructure in Russia.

Russia is likely to seek and pursue Russia-South Korea-North Korea economic cooperation not only for practical profit but also for political influence. By understanding Russian policies toward Korean Peninsula, the Korean government needs to cope with finding substantial and realistic measures such as building partnership for developing the Far East rather than a rapid change in policies. There are priorities for Russian-Korean cooperation, which involves the strengthening of regional cooperation projects. Such cooperation at the regional level logically builds a policy in the field of transport and tourism. Cooperation in the economic sphere is especially important. New opportunities for interregional cooperation can realize the strategic interests of the two states.

For example, tourism is one of the areas in which cooperation can be successfully carried out at the level of regional authorities. In this field there are organizations such as the East Asian Interregional Tourism Forum (EATOF), initiated by the authorities of the province of Gangwon, and the Organization for the Development of Tourism of the Cities of the Asian-Pacific Region. In this study, it is focused on the Republic of Sakha (Yakutia) that can be the center point for the development and cooperation based between both countries. This area has uncountable volume of natural resources waiting for the economic cooperation of the two nations. As one of the emerging members in the Russian Federal States, the Republic of Sakha (Yakutia) can be the main partner in the future Korea-Russia (especially in the Siberian area) economic cooperation. The First Foreign Economic Relations between the Republic of Sakha and the Republic of Korea The first relation between the Republic of Sakha (Yakutia) and the Republic of Korea was in 1992 during the visit of the government delegation of the Republic of Korea led by the Minister of Energy and Resources to Yakutsk. The result of this was the signed Agreement on the preliminary feasibility study of the development of natural gas resources in Yakutia and the Agreement on the establishment of the Joint Committee for the Development of Natural Gas Resources in Yakutia between the Russian Federation, the Republic of Sakha (Yakutia) and the Republic of Korea.

Further development of relations between Yakutia and Korea was during the visit of the first President of the Republic of Sakha (Yakutia) Mikhail Nikolayev in Seoul in February 1995. On behalf of the Russian Government, Mikhail Nikolayev signed an agreement between the governments of the Russian Federation and the Republic of Korea on economic cooperation in the Republic of Sakha (Yakutia). It was the first time in the practice of international relations, when the right to sign an intergovernmental agreement was delegated to the subject of the Federation. Moreover, according to the concept of the international relations of regions, the Republic of Sakha and the province of South Korea unites membership in the Association of North East Asia Regional Governments (NEAR).

In 1996, the Republic of Sakha (Yakutia) took part in the establishment of this international organization as the most stable region of the Russian Far East. The Republic of Sakha is a member of the sub-commissions on ecology, economics and trade, on protection from natural disasters, on relations in the field of culture. The Republic regularly participates in the plenary conferences of the NEAR. In 2014, the Head of the Republic of Sakha visited Seoul to participate in the Russian-Korean Economic Forum Invest in the Far East, during the session he made a presentation on the investment potential of the republic. Current Economic Status of Korea in the Republic of Sakha Structure of foreign trade 200620072008200920102011201220132014Foreign trade turnover85391,293066,714205,2330,05253,612812,6102250,343348,243572,6Export84811,592727,112079,2330,0-3175,791683,541971,239876,5Import579,7339,62126,0-5253,69636,9606,21377,03696,1Source Federal State Statistics of the Republic of Sakha (Yakutia) According to the Federal State Statistics of the Republic of Sakha (Yakutia), the main export item of the Republic of Sakha (Yakutia) to the Republic of Korea is coal.

The largest deliveries of coal took place in 2005-2007 and 2012. From the Republic of Korea, the main import products were chemical products and rubber. Structure of FDI of South Korea in the Republic of Sakha Investment of the Republic of Korea in the economy of the Republic of Sakha (Yakutia) (th.

U.S. dollars) 200620072008200920102011201220132271,53082,8-5322,911368,74 332–Source Federal State Statistics of the Republic of Sakha (Yakutia) Since 2008 on the territory of the Republic of Sakha (Yakutia) LLC LG International Yakutsk operates, the founder of which is the Korean company LG International. Currently, the company is renting out the office premises of the building and is working to find promising investment projects for joint implementation with the side of the Republic of Sakha.

Since 1994, LG International has been investing in the coal enterprise of Sakha-Korea Joint Venture Company EREL Ltd. and has been developing the coal industry in Neryungri, the Republic of Sakha, for a long time. LG International Yakutsk LLC has started its operation since 2008. From 2009 to 2011 the company carried out the construction of the administrative building LG Sakha Center in the center of the capital city of the Republic of Sakha Yakutsk. This building was opened in June 2011. It is a modern eight-floor Korean-style building with a total area of 6,200 sq.

meters. On the ground floor there is a restaurant of Korean cuisine Hangukkwan, from the second floor – offices and representations of Sakha and South Korean companies. According to the head of the Department for External Relations of the Republic of Sakha Vladimir Vasilev, in the coming years the cooperation of the Republic of Sakha with the regions of South Korea will increase actively. On to the instructions of the Chairman of the Government of the republic, there is an importance to work out in detail the issues of concluding an agreement on trade, economic, scientific, technical, cultural cooperation with the province of Kangwon of the Republic of Korea. Cooperation between the Republic of Sakha and the province of Kangwon of Korea. The Republic of Sakha (Yakutia) has been cooperating with the province of Kangwon of the Republic of Korea since 2007 within the framework of the International Non-Governmental Organization of the Governors of the Northern Regions Northern Forum, which was established in 1991.

The close cooperation with the province of Kangwon of the Republic of Korea began in 2012 with the implementation of exchange programs between the educational schools of the Republic of Korea and the Republic of Sakha (Yakutia), as well as to improve the skills of North-Eastern Federal University staff. In October 2013, a delegation from the province of Kangwon of the Republic of Korea arrived in Yakutsk to conduct a medical seminar, which was held in Yakutsk. During the meeting with representatives of healthcare and international affairs of the Republic of Sakha, both sides came to a common conclusion that bio-medical technology is the priority for mutual benefit and cooperation between the two regions. Thereby, in order to develop bilateral cooperation in the provision of medical services, healthcare, pharmaceuticals and bioindustry, two sides made a plan for 2014 of joint activities between the Republic of Sakha (Yakutia) and the province of Kangwon. Furthermore, tourism is one of the areas in which cooperation can be successfully carried out at the level of regional authorities.

In this area, such organizations as the East Asian Interregional Tourism Forum, initiated by the authorities of the province of Gangwon, and the Organization for the Development of Tourism of the Cities of the Asian-Pacific Region. V. Conclusion Bibliography Devaeva, E, Kotova, T. (2009) Foreign Trade of the Far East of Russia Current State and Development Trends // Spatial Economics, No. 4. Dubrovina, O. (2013) Regional dimension of foreign policy the essence and content // The Authority, Vol. 21.

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Isaev, A. (2017) Territories of advanced development. New instrument of regional economic policy, ECO, No.

4. Kim, Bongchul. (2013) Establishments of the Legal Infrastructure for the Korea-Siberian Economic Cooperation Focusing on the Republic of Sakha (Yakutia) case, Life Science Journal. Minakir, P., Prokapalo, O. (2017) Russian Far East.

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Prokapalo, O., Isaev, A., Mazitova, M. (2016) Economic conjuncture in the Far Eastern Federal District in 2015, Spatial Economics, No. 2. Moon Jae-in governments New Northern Policy, KBS World Radio http//world.kbs.

co.kr/english/program/program_economyplus_detail.htmNo6273 Devaeva, E, Kotova, T.

(2009) Foreign Trade of the Far East of Russia Current State and Development Trends // Spatial Economics, No. 4, 4056. In 2008-2010 years, the annual increase in investments was more than 300 million, but in 2016 it was reduced to 110 million.

/ Export-Import Bank of Korea State program The Strategy of Social and Economic Development of the Far East and the Baikal Region URL http//government.ru/programs/232/events/ See ibid. Izotov, D.

(2017) The Far East. Innovations in public policy, ECO, No.4, 2744. Isaev, A.

(2017) Territories of advanced development. New instrument of regional economic policy, ECO, No. 4, 6177. The project Strategies of socio-economic development of the Republic of Sakha (Yakutia) for the period until 2030 with the definition of the target vision until 2050 URL https//mineconomic.sakha.gov.ru/Strategiya-2030 December 1, 2016 was published an updated Concept of Foreign Policy of the Russian Federation, approved by President of the Russian Federation Vladimir Putin.

This Concept is a system of views on the basic principles, priorities, goals and objectives of the foreign policy of the Russian Federation. URL HYPERLINK http//www.mid.ru/foreign_policy/news/-/asset_publisher/cKNonkJE02Bw/content/id/2542248http//www.mid.ru/foreign_policy/news/-/asset_publisher/cKNonkJE02Bw/content/id/2542248 (Date of the application 20th April 2018) 2016 Concept of Foreign Policy of the Russian Federation, Articles 23-48. 2016 Concept of Foreign Policy of the Russian Federation, Articles 84-85, 87-89. 2013 Concept of Foreign Policy of the Russian Federation, Articles 80-81, 84-86.

2016 Concept of Foreign Policy of the Russian Federation, Article 89. Lee, Jae-Young. (2017) The New Northern Policy and Korean-Russian Cooperation, An article in Russia in Global Affairs Kim, Bongchul.

(2013) Establishments of the Legal Infrastructure for the Korea-Siberian Economic Cooperation Focusing on the Republic of Sakha (Yakutia) case, Life Science Journal. Ministry of Foreign Affairs of the Republic of Sakha (Yakutia) NEAR is an international organization founded by 29 regional governments from four Northeast Asian Countries, including Peoples Republic of China, Japan, Republic of Korea and Russian Federation in September 1996 in Gyeongsangbuk-do Province, Republic of Korea. NEAR is committed to contributing to the co-development of the region and world peace by enhancing mutual exchange and cooperation based on the spirit of reciprocity and equity. http//www.neargov.org/en/ Official website of the Ministry for the Development of the Far East of the Russian Federation https//minvr.

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