Strange bedfellows in a Siberian dream: Stephen Court on the high economic hopes of an unlikely five-nation Pacific development project

HISTORY is littered with unlikely development projects, but perhaps none more so than a plan to turn one of the most desolate and undeveloped parts of north- east Asia into a thriving hub of 21st century international trade.

It is not an area that has previously inspired visions of greatness. In 1887, H E M James, a traveller, described the marshy Tumen River delta as 'a very disappointing river'. Today's vision at least has impressive backing - Russia has put its weight behind the project sponsored by the United Nations Development Programme (UNDP) to transform the delta, which crosses the borders of Russia, China and North Korea, into what has been dubbed 'a sub-Siberian Singapore'.

Russia has joined China, North and South Korea and Mongolia as a full participant in the project. Of the six countries that took part in the initial UNDP Tumen River programme conference in July 1991, only Japan remains on the sidelines, retaining official observer status.

The cost - conservatively estimated at dollars 30bn over the next 20 years - is startling on its own. But it is the unlikely cooperation of the regional rivals that has attracted most attention. Although Peking and Seoul finally established diplomatic relations this year, Japan and North Korea have yet to do so, and North and South Korea, despite their mutual non- aggression pact last December, are still separated by the demilitarised zone. Russia and Japan are embroiled in a territorial dispute over the Kuril Islands.

The area covers a 10,000 sq km triangular region facing the Sea of Japan. It stretches from the North Korean port of Chongjin, to the Russian port of Vladivostok, and reaches inland to the Chinese city of Yanji in Jilin province. Within that is a 1,000 sq km inner economic zone centred on the delta region.

The idea is that the area would have a free flow of goods, capital and labour as well as tax exemptions, shared transport and information services, and incentives for domestic and foreign investment.

The estimated dollars 30bn will be needed to dredge the Tumen River - or build a canal inland from the sea - and develop a network of roads, railways, ports and airports, along with educational facilities, power, water and waste disposal plants and telecommunications. Up to 11 specialised harbours are envisaged, as well as a city of 500,000 people in the sparsely-populated delta area. At present, the project is being scrutinised in an 18-month feasibility study.

'It is very significant that the Russians have demonstrated in full their participation in the programme,' said Herbert Behrstock, the UNDP's chief of division for East Asia and the Pacific. 'In due course, the Japanese will be involved when they choose to be.'

The programme has strong economic attractions. North Korea and China have abundant cheap labour. Japan and South Korea have capital, technology and managerial skills. Siberia, North Korea, Manchuria and Mongolia are rich in natural resources such as coal, oil, timber, fresh water, minerals and agricultural products.

An international port, connected by a shortened rail route from Tumen via Siberia, would greatly reduce the time and cost of transport to Europe, particularly for the Japanese. It would also open up a sea route for landlocked Mongolia and provide a more direct route to the Sea of Japan for China.

But there are problems. First and foremost, the money has to be found. According to Michael Yahuda, a reader in international relations at the London School of Economics: 'The South Koreans will feel less inclined to invest in North Korea now they can invest directly in China. The Japanese are unlikely to invest because of the huge capital needed for ports and transport.

'The only significant thing now is the political side. Because all the governments concerned want North Korea to become economically engaged in the north Pacific, they may feel it is worthwhile putting money into it.' But while North Korea is very keen to attract investment to develop its eastern seaboard ports, a foreign debt approaching dollars 6bn and a bad credit risk rating will make foreign capital hard to come by.

Beyond that, there are potential conflicts of interest. Within the past year, China and North Korea have set up special economic zones close to the Tumen delta, and Russia is planning one at nearby Posyet. There is pressure within these countries to go it alone rather than pool resources in a cross-border economic zone.

On top of that, there could be conflict for cash within the UN because its Industrial Development Organisation is working on separate plans to create the Greater Vladivostock free economic zone.

'If plans are not coordinated, the scheme may result in competition. North-east Asian economies may not complement each other for long,' said Mark Valencia, a researcher at the East-West Center in Hawaii.

But Herbert Behrstock is confident that the programme will get off the ground. 'We are very encouraged by what has been happening, where over the past year and a quarter of progressive steps the (participating) countries have committed themselves to cooperating on a long-term basis,' he said. Such optimism, rather than the dismal vision of H E M James, will be needed in large quantities if the scheme is to succeed.

(Photograph omitted)