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Northeast Asia Peace Initiative

J. Nakagawa: Regional Economic Cooperation in Northeast Asia

Regional economic cooperation in Northeast Asia will be imperative for energy cooperation in the area. The European Union’s formation was due to the fact that Europe was very closely connected by a natural gas pipeline. If Northeast Asia is connected by an energy pipeline, it will contribute much to the stable supply of energy and eventually the peace of the region.

Russia will be the potential supply source of oil and natural gas in the area. According to the Institute for Northeast Asian Studies in Japan, some US$660-810 billion will be required for the energy project in Russia, in which $35-45 billion will be for gas development in Russian Far East and $75 billion for development of oil.

In the meantime, the construction of an electricity transmission network in Northeast Asia is also required. A joint study by Japan and Korea on the feasibility of a transmission line from China and Russia to Korea and Japan via North Korea is recommended. If Pusan and Fukuoka are connected by a 250 km undersea transmission line for 450 kV with 2GW, the estimated investment would be around $2 billion; investment can be depreciated in seven to nine years.

Dr. Kengo Asakura suggests that constructing a pipeline running from Sakhalin to the Korean Peninsula and to western Japan will contribute to solving the nuclear issue with North Korea. Japan and Korea may jointly cooperate in financing the project.

Development and utilization of natural gas is a theme with the potential to greatly impact the sustainable economic development and regional stability of Northeast Asia. If natural gas pipeline networks are laid and expanded throughout Northeast Asia, it will foster an awareness of community and trust in the region and establish a physical foundation for regional stability and prosperity.

Likewise, if power transmission networks that exist independently in each country can be connected with each other, it would allow for the effective use of power resources and extensive responses to peak periods and power crises. It would be beneficial if power networks could be gradually connected with each other wherever economic and political conditions allow.

It would be commendable to connect power generation and transmission across borders. Far-east Russia has abundant water resources. If the Bureya power plant on the Amur River is completed, it could contribute to meeting the increasing demand for electricity in northeastern China and North Korea, while providing an alternative source for aging coal-fired power plants. It would also be possible to build gas-fired power plants close to the natural gas fields of the Russian Far East and transmit the electricity to China, South Korea, North Korea and Japan. There is a plan to build natural gas power plants and transmit electricity to Hokkaido and Niigata in Japan by undersea cables. This plan could be feasible, depending on trends in electricity demand and the price of electricity.

In addition, reducing the costs of power generation using renewable natural energy (solar, wind, waves, etc.), which contribute to improved power stability and clean energy, would be equally desirable.

The goal of such efforts will be a “Northeast Asia Energy Community.” It would appear inevitable that a path to coexistence within the framework of a Northeast Asia Energy Community is inevitable. Energy forms the foundation of our economic and social existence. We need to continue regional cooperation toward the development of extensive energy networks in Northeast Asia.

The experience on the European continent shows that the supply of natural gas from Russia has never been disrupted by political intervention.

The following natural gas pipelines are proposed:

1)    Sakhalin (Okha)-Yuzhno-Sakhalinsk-Hokkaido-Niigata (2030 km)
2)    Sakhalin (Okha)-Khabarovsk-Vladivostok-Rajin-Seoul (2230 km)
3)    Irkutsk-Ulaanbaatar-Beijing (2100 km)
4)    Irkutsk-Chita-Harbin-Shenyang-Beijing (4520 km)
5)    Yakutsk-Harbin-Shenyang-Pyongyang-Seoul-Fukuoka (4170 km)

In the meantime, the development of energy networks and Northeast Asia transport corridors needs to proceed with a view towards creating a free trade zone in Northeast Asia in the future. The founding of a Northeast Asia Free Trade Area (NEAFTA) will not only enhance regional trade in Northeast Asia, but will also promote economic growth and bring goodwill and regional stability. NEAFTA should be considered as one approach for establishing a symbiotic community in the region. Development of the transport corridors needs to be carried out with a long-term vision that the corridors will function as the axes of the free trade area.

Japan, Korea and China have been endeavoring to have a Free Trade Agreement among three major countries. These three countries should consider including North Korea.

The Shanghai Cooperation Organization consists of China, Russia, Kazakhstan, Tajikistan and Uzbekistan. From the standpoint of energy strategy in Central Asia, the Shanghai Cooperation Organization is poised to play an important role in the future.

Japan, Korea and China should aggressively participate in the following vital and important projects, supporting them with capital and technology:

1)    Agriculture development project in Northeast China
2)    Sakhalin oil and gas development project
3)    Yakutsk natural gas development project
4)    Pan-Japan Sea pipeline project
5)    Eurasia land bridge project

NEAFTA strategy:

The population of the area included in the Tumen River economic region encompassing China, Russia, Japan, and the two Koreas, an area covering 918 square kilometers, is 312 million. Regional trade amounts to $1.068 trillion per year. Accumulated investment in the area amounted to $41.6 billion in 1999. NEAFTA should be realized as soon as possible. In the future, we should consider adding Taiwan. Then the Bohai Economic Area (the Tianjin-Dalien and Jintao regions of China) and the Yellow Sea Economic Area, led by Shanghai, should amalgamate to create an influential economic area in East Asia.

A Northeast Asia Development Bank and Asian Monetary Fund should be considered. We should study the establishment of a common currency area in Asia, similar to the European monetary union, where a single currency would be used in several Asian economies.

By realizing these ambitious NEAFTA strategies, Japan will be able to contribute to the maintenance of peace and security in the area, through the promotion of friendly economic and trade relations. This would mark an important step for Japan in overcoming Cold War enmities and trade impediments, which have distorted economic relations in an area blessed with rich natural resources.

The proper use of information technology is highly desirable to develop these regions. This means not only the maximum utilization of information technology for economic development, but also in the areas of education, training, technology, constructing regional transportation and logistics networks and establishing information technology centers in the region.

It is high time for us to take positive and ambitious immediate action to form our international and global strategy for Northeast Asian prosperity for the 21st century.

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