Main achievements and further tasks for Korean-Russian economic cooperation: From trade to investment and innovation

Abstract

The article aims to examine the performance of trade and investment since the diplomatic normalization of relations between the Russian Federation (RF) and the Republic of Korea (ROK) and also suggests further areas for the development of economic cooperation between the two countries. The volume of trade between the two countries in 2019 has grown 116-fold compared to 1992. To increase trade volume, it is necessary to increase intra-industry trade to improve the mutual relationship. The direct investment of Korea into Russia has been increased, as well as diversified in different sectors. Korea’s total investment in Russia is approximately 2.75 billion USD, which is relatively small compared to investments made by Korea globally. Korea’s New Northern Policy seeks to strengthen cooperation with Russia. Korean companies must reevaluate the strategic importance of Russia. The lesson learnt from the previous experience of overcoming past crises is, first, to believe in the potential and capabilities of the Russian economy and market. The development of the Far East and the Arctic has made Russia’s energy supply chain more stable and flexible in responding to changes in the energy market. In addition, Russia is also becoming the center of the 4th Industrial Revolution thanks to its advanced scientific and technological capabilities, as well as the revival of its manufacturing industry. To advance economic cooperation between Russia and Korea, Korea has to invest in Russia’s global energy supply chain and participate in the formation of a global value chain in a certain industry by combining Russian advanced science and technology with Korean product development planning and global marketing capabilities. Specifically, The Far East, Arctic Development, and Triangle (or Quadrangle) Cooperation among ROK-DPRK-Russia (-China) will provide significant opportunities to Korean companies.