It would he hard to find more unlikely partners if you wanted to start a corporation. Their resumes read: little experience with capitalism, historic mistrust of one another, financially unstable.
Despite these shaky credentials, China, Russia and North Korea have begun working together, under the leadership of the United Nations Development Programme (UNDP), to create a sub-Siberian Hong Kong in a remote corner of northeast Asia. The unusual alliance has also brought collaboration from South Korea and Mongolia,' and the interest of Japan, all of which stand to benefit if the plan realises its goal: to transform the rumen River Delta area ? where the borders of China, Russia and North Korea meet ? into a major international shipping, trading and manufacturing zone.
Carved out of the three countries, the economic zone would be managed much the same way as a corporation, with each of the partners collecting fees from jointly-run power plants, railway systems and shipping facilities.
Expected to cost billions over the next 20 years, the initial cooperative zone of the Tumen River Area Development Programme (TRADP), which spans 1,000 square kilometres, would get a vast port complex, roads, a telecommunications network, a new urban centre and an airport. The plan also envisions a trans-continental railway system stretching 10,000 kilometres from the port area to major markets in Europe, which is of special interest to the Japanese.
The potential of a new Asian gateway for global trade is clear to just about everyone. The development would offer easy access and improved transportation links to the major markets in. the industrialised Chinese provinces of Jilin and Heilongjiang, as well as to the minerals, oil, coal, timber and other natural resources found in Russia, North Korea and Mongolia. Processed and manufactured goods and even cereal grains are prospective exports.
On the map, the rumen is at the centre of northeast Asia. But standing on the banks of this shallow river it is hard to imagine being at the centre of anything. It is even harder, perhaps, to see this thinly populated delta area, surrounded by mountains, mud huts and rice fields, as a booming metropolis of 500,000 people, which is what planners have in mind.
Frozen in time by communism, this part of the world has suddenly come to life with talk of increased economic activity and capitalism. But to many, the venture means entering new and uncharted territory. "When you talk about 'CEO's and 'corporations' many people here don't understand,' says Herbert Levin, a special adviser to the United Nations who attended an October meeting of the six countries in Beijing.
Even the Chinese, with experience in land-leasing and special economic zones, are somewhat intimidated by so much talk of capitalism. "Legal and financial terms need clarification because we are not familiar with them," says Chinese team leader Long Yongtu. "We need to learn the rules of international trade. But no matter what the future outcome, the lessons China and other countries are learning are invaluable to their growth and integration into the global economy."
The goals of the Tumen River plan are as impressive as they are ambitious. But daunting challenges lie ahead, including vast sums of required capital, a lack of inhabitants and infrastructure in the area, and the risks to a pristine environment, which is home to many rare and endangered species.
Originating in the forests of the Long White Mountains (Changbai Shan) on the border of China and North Korea, the Tumen stretches 516 km through North Korea, past Hunchun in northeast China, and empties in to the Sea of Japan. Most of the rumen marks the eastern border between China and North Korea, but the last 15 km form the border between Russia and North Korea. In 1860, China lost access to the Sea of Japan as the result of the Peking treaty with Russia. The Chinese are anxious to regain access to it, and stand to, once the plan comes to fruition.
Sceptics are quick to point out the development's hefty cost, and say that it is too ambitious for the times. "The capital is too much and the area's resources too few," says John Seel, a Korean scholar who recently toured the proposed economic zone. "The roads are awful, there are few cars, and it's really dead." He asks, "How do you develop a Rotterdam when there are no people?"
But even the boldest plans start with a single step, and in the case of TRADP that step was taken at a 1990 meeting in Changchun, China, co-sponsored by UNDP, where different strategies for developing northeast Asia were brought to the table. However, the real beginning of inter-governmental cooperation took place in Ulaanbaatar in July 1991, when China, both Koreas and Mongolia agreed that the plan was in their common interest. UNDP was asked to serve as a neutral catalyst. Later that year, North Korea, China and Russia agreed in principle to leasing the necessary 1,000 square kilometres needed for the development area.
While most of the activity will take place in the immediate economic zone (called the Tumen River Economic Zone ? TREZ), which links Rajin in North Korea, Hunchun in China and Posyet in Russia, it is anticipated that development will also occur in a larger geographical area, reaching the cities of Vladivostok, Chongjin and Yanji. Despite political differences, members of the initiative's Programme Management Committee (China, Russia, South Korea, Mongolia, and Japan as an observer) realise that cooperative development can only fuel their economies. "The project will result in a better quality of lice, more goods, more jobs and greater contact with the outside world," says K.G. Singh, UNDP's regional director for Asia and the Pacific.
Along with regaining access to the Sea of Japan, China hopes to stimulate economic development in its northeast area.
Russian officials, initially worried that the cooperative venture might detract from their own free trade zone in Vladivostok, now believe that TRADP will complement rather than compete, and that the development will increase business in other Russian ports like Posyet and Nakhodka.
The North Koreans, faced with critical shortages of food, fuel and hard currency, are even more anxious for new economic opportunities to attract trade and foreign capital.
North Korea recently passed a law allowing for the development of economic and free trade zones in Chongjin, Rajin and Sonbong. But outsiders are still wary, especially when North Korea has over US$6bn in foreign debt. The multinational Tumen cooperation could help North Korea obtain an important basis with which to attract foreign money.
For Mongolia, a land-locked and geographically isolated country, geographically could help end its foreign exchange shortage by providing an important transport corridor for growing Euro-Asian trade.
"My people will benefit by a connection with northeast Asian countries, the Republic of Korea, Japan and the United States," says Rentsengiin Batmend, a senior official and head of the Mongolian national team. "We face shortages of consumer goods and foreign currency, and this would help us earn more money."
Finally South Korea and Japan are attracted by potential new rail routes to Europe, and by better access to resource-rich Siberia and Mongolia and the cheap labour available there.
As for raising the necessary capital, there has been only tepid response from big money sources so far. Among the six countries involved, only two possess relative strength in capital and technology ? Japan and South Korea ? and they have yet to make any firm financial commitments.
Despite the large benefits to be gained, Japan is reluctant to foot the bill for economic reasons. Russia and North Korea do not enjoy high credit ratings in the investment markets. Moreover, unresolved political issues between Japan and both countries have overshadowed economic partnership.
South Korea is keen on increased cooperation with its northern neighbour, but is a bit wary of the expense. "We are eager to promote progress in TRADP," says Tae Yon Kim, South Korea's team leader and assistant minister for international policy coordination. "But South Korea cannot finance the whole or even a majority of that cost."
China, however, whose economy is booming, has agreed to invest more than US$I00m to extend a railway it is building in the area into Russia, with the idea of creating a link to the Trans-Siberian railroad.
While the financing issue has yet to be resolved, TRADP planners are convinced the idea will see the light of day. The question is one of scale and timing, says Herbert Behrstock, chief of the East Asia and Pacific division at UNDP.
Still, its size and complexity make some question its feasibility. "Multinational deals are almost impossible to administer," says a Western diplomat who watches the Tumen River Area Development Programme for his government. "Take the Saint Lawrence Seaway project in Canada (a facility jointly operated by the United States and Canada) as an example. Look at the original claims of how it would improve lives, but it has been a huge failure and cost US$8bn. The UNDP project is even more difficult."
Indeed, naysayers are quick to point to the difficulties that lie ahead. But the programme's potential for success must also be measured in relation to where these countries were two years ago and what has already happened. When TRADP was conceived in 1991, South Korea and China had no relations, Mongolia was still communist, North Korea had not yet opened at all and neither Koreas had yet joined the United Nations.
In the last two years national teams from the six-member countries have met formally twice, once in February 1992 in Seoul and again in Beijing last October. UNDP has committed US$3.5m for feasibilty studies and the Finnish government has recently provided US$lm specifically for forestry research and for studying a land bridge concept to Europe.
The next crucial step will be completing a number of studies now under way and confirming government interest to proceed. Investment would then be sought from multinational banks and corporations, bilateral aid agencies and private banks.
"We are now drafting an investment prospectus and finalising international agreements," says Mr. Whalen, the UNDP programme manager. "We are also contacting potential investors and preparing master plans for transportation and telecommunications development." To improve communications, UNDP is planning a microwave fibre optic telecommunications system in the area.
As TRADP moves from the theoretical to the practical, more attention is being placed on the environment. Long decades of isolation have preserved the area's untouched beauty and abundant wildlife. With prodding from the Russian delegates, the environment issue, a major concern of the UNDP in all its programmes, has become firmly etched into the agenda.
"Environmental studies should be done before Greenpeace takes out a full-page advertisement in the New York Times saying, 'Stop the rumen development before it destroys the last wilderness frontier," warns Mr. Levin.
Overall a lot of work remains. But while the visionaries continue to dream and the sceptics continue to doubt, the process has already contributed to peace and cooperation in this unimposing corner of Asia.
To critics who see TRADP as too ambitious for what is now a sleepy area, Mr. Whalen reminds us that "when Hong Kong was to be established by the j British, Lord Palmerston, the foreign minister, said, 'Why do we need this barren rock?" *
This article was written by Hollis Ornstein Carter, and first appeared in Choices, the magazine of the United Nations Development Programme.
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