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Wednesday, January 27, 2010

Greater Tumen Area Economic Development Project: A Background

Many in Northeast Asia wish to see the Tumen Basin develop into a place for economic cooperation and competition. One such plan is the Greater Tumen Initiative (GTI), formerly known as Tumen River Area Development Project (TRADP), being carried out under the auspices of the United Nations Development Programme (UNDP). The 20-year 80 billion USD plan calls for the creation of port facilities and transportation infrastructure in the region to support a multinational trading hub. Countries participating in the GTI are China, Mongolia, North Korea, Russia and South Korea.

The goal of GTI is to make the area into a free economic zone for trade to prosper and attract investment into the area. For China, the project would give traders in Northeast China easier access to major international ports without having to circumnavigate the Korean Peninsula and thus stimulating growth in China’s northeast rustbelt. For Russia, the project would give the ability to better exploit resources in Siberia and allow easier access to North Korea’s resource-rich hinterland; the area just to the south of the Tumen contains reserves of oil, minerals, coal, timber, and abundant farmland.

Development of the Tumen River area and North Korea’s participation in this project means inflow of hard foreign currency, improvements in infrastructure, and possible increase in industrial capacity. North Korea, with its bleak economy, therefore, will most likely continue to support the development of Tumen River area and increase its future involvement in the project as it seeks to break the economic isolation and hardship it has suffered since the collapse of most of its communist allies and the implementation of international sanctions.

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  1. Dear Steve,

    a very interesting article; I was unaware of such a project.

    In your expert opinion, is the project meeting its targets? Have the recent inter-Korean tensions undermined the GTI in any way? Why are Mongolia and ROK involved? Is the DPRK likely to allow exploitation of its territory?

    Many thanks,

    Samuel Rogers

  2. Dear Samuel,

    I am not sure about me being any sort of expert; however, my feeling is that the recent inter-Korean tensions has not really had any impact on the GTI. Although South Korea is a member of the GTI project, it has not committed too much on the project itself since the beginning of the Lee administration. South Korean government sees the project as an overall benefit for its economy, but really a way to engage the North in the short run rather than making any economic gains...which explains why the Lee administration has not done too much on this project since it took power.

    The countries that are really working on pushing the GTI through are China and Russia because the project does have somewhat significant impact on their economic development in the region.

    As for the DPRK, it is all too happy to participate as long as it brings in much needed cash and other materials. As for exploitation of its territory, I don't think DPRK would have any issues with it as long as the exploitors are Chinese and Russian.

    For Mongolia, it is participating in the GTI because the project really opens up its access to the global market...both for imports coming into Mongolia, and for "exporting" tourism for Mongolia.

    Again, I claim no expertise, but these are some of my thoughts.


  3. I think that Russia is not without reservation on the project. Otherwise, the project would not go so slowly. As a matter of fact, the Russian Far East is the only window that the federation is opening to the more prosperous Northeast Asia region when Europe and the US are both trapped in deep economic trouble. Let's see whether Putin is able to see the point. More even develoopment within regions inside a huge country like the Russian Federation is important so that those Russian people at the other end of the country would not be feeling abandoned by their own country if the Federation's sociopolitical and economic gravity is balancing too much on its European end.

  4. We are in a world where peoples and countries are characterized by interdepedence and interconnectedness. However, when people are being pushed rapidly together by the gigantic global force, it is nothing more than natural to produce resistance. This action and reaction is determining who is the winner and the loser. China's successful economic development is a full range integration into the global political economy. China's success is open to investment from foreign enterprises. Russia is at a crossroad, whether to open or to close at its Far Eastern end. North Korea is even worse. It chooses to closing out from reality. Japan's failure is due to its relatively close economy which is hostile to foreign investment. The failure of the US is to reach out even though it has no money. This is leading to the hollowing out of the country. China is wise to reach out for other but it risks to ignore the problems of its own people and challenges arise from within. It is just a common sense that a good balance is always good for national security.

  5. Medvedeve is calling for the Russian federal government to put more efforts to the development of the Russian Far East for the country is losing the Far East. (http://topics.blogs.nytimes.com/2008/09/30/will-russia-lose-its-far-east/)Russian Far East needs more care of the federal government so as to survive. China was in similar, or even worse, situation during the early period of opening. We have nothing to develop the country, apart from embracing regionalism and globalism i.e. to open the economy for foreign investment and technological know hows. It appears that using other people's money is the only way to develop its vast territory. The question is always that whose money would not sacrifice the national security? However, sometimes, we over-securitize everything.

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