MISSION OF RUSSIA IN CREATING THE NEA INTEGRATED TRANSPORT & LOGISTICS NETWORK

Mikhail V. Kholosha

Admiral Nevelskoy Maritime State University, Vladivostok

Gotov Dugerjav

Mongolia University of Science and Technology, Ulaanbaatar, Mongolia

Sergei M. Smirnov

Admiral Nevelskoy Maritime State University, Vladivostok

Abstract The regional international organization “Greater Tumen Initiative” (GTI) is actively involved in the problem of improving the efficiency of international transport in North-East Asia. Within the GTI, the concept of international transport corridors was adopted, which gave certain results but could not fundamentally solve the existing bottlenecks in regional logistics. According to the study carried out in 2020, experts from the GTI member countries and Japan proposed to move to a new, higher degree of integration – the creation of an integrated regional transport and logistics network. The Russian Far East has a particularly high development potential in this area. The article also discusses the issues of solving transport problems in Mongolia within the framework of the proposed “network” concept and in the format of bilateral cooperation with Russia.

Keywords: Greater Tumen Initiative, transport corridors, border crossing point, logistics, Tavantolgoi, digitalization of logistics

In early 2020, transport and logistics experts from Russia, China, South Korea, Mongolia and Japan took part in a large-scale research project titled “Transport section study of RIN Joint Research on Evolution of Regional Value Chains and Logistics Networks in Greater Tumen Region” (GTR VC&LN)[1], The purpose of the research project was to analyze the reasons for the insufficient functioning of the international transport corridors (ITC) in the GTR region and to develop proposals to overcome existing bottlenecks in regional logistics.

Initially, the concept of creating ITCs was based on the fact that a cross-border corridor is not just a dogmatically understood transport route serving freight flows of bilateral trade between neighboring NEA countries. The ITCs were supposed to become an effective mechanism for strengthening regional integration, optimizing land and sea routes, ensuring the smooth movement of transit cargo through the territory of the countries participating in the GTI program [1]. Unfortunately, this concept has not yet been fully implemented.

The compilation of national analytical reports produced by the study participants coincided with the onset of the pandemic spread of COVID-19. Almost no one at that time could have predicted the scale of future damage to the world economy in general and the restrictions imposed on transport and logistics links between the GTI countries in particular. Nevertheless, the conclusions and suggestions of experts made on the basis of the results of the study, to a large degree anticipated the emergence of unconventional threats to regional transport integration and recommended a number of measures to neutralize them.

The main conclusion is to state the fact: at present, ITCs are a set of separate transport routes, in some places interconnected, but not united into a regional transport and logistics network. ITCs are rigidly tied to specific transport hubs (border crossing points – BCP, seaports) and serve fixed traffic flows. If difficulties arise at one ITC, its cargo flows cannot be painlessly redirected to another route.

The following factors generate organic flaws in the concept of individual ITCs:

  • NEA countries in contrast to, for example, the European Union, have great differences in geographic location, economic development, political system, demography, religion, language and writing [2]. This cannot but affect their strategic priorities and approaches to regional transport and logistics integration. For example, the Republic of Korea and Japan are isolated from continental transport routes and are forced to look for complex options for the delivery of export-import cargo. China experiences significant imbalances between the economically developed South-East and the landlocked North-Eastern provinces included in the GTR. Mongolia as a land-locked country is completely dependent on its “great” neighbors for the transportation of foreign trade goods. The DPRK, which traditionally follows its own unique path, is not yet ready for even the minimum level of cooperation in the field of transport and logistics, although its contribution could be very significant. Russia is probably the only GTI member that, in principle, is not interested in expanding access to transport communications of its NEA neighbors for the delivery of its own cargo, but needs to attract a foreign cargo base and investments to integrate into the regional economy and modernize domestic infrastructure.
  • GTI participants develop their internal transport communications and logistics infrastructure based on their own priorities and goals [3]. This does not always take into account the needs and specifics of neighboring states, especially the problems of the development of supranational (regional) economic structures. This is reflected in the disproportionate development of trans-border communications and service infrastructure on different sides of the common border, different procedures for customs, immigration and other types of control of goods and passengers, sometimes in the appearance of suspicion and misinterpretation of the actions of the other side, causing inadequate “response” measures. The latter circumstance, in particular, hinders the implementation of the Chinese ‘Belt & Road’ initiative.
  • Continuing the above issue, one cannot but mention the unresolved problem of lack of proper coordination between neighboring parties in terms of design, construction and modernization of transport infrastructure and BCPs, despite the fact that these facilities serve common freight and passenger flows and have a common technological cycle. As a result, adjacent BCPs sometimes have inconsistent operating modes and different throughput, interconnecting roads with different standards and technological operating procedures, and even occasional facts when a BCP is unilaterally built on one side of the border, but cannot function due to a lack of similar facility on the opposite side.
  •  NEA has only rudimentary institutions of regional integration, mainly in the field of economics and environmental protection. This is in line with the dominant regionalization model in East Asia, which puts the economy at the forefront, preferring not to touch sensitive areas of politics and security [2]. For example, there is a 3-party (China – Japan – Republic of Korea) logistics information exchange system NEAL-NET. This system greatly facilitates international freight transit in the GTR. But for a number of reasons it will not be easy for the rest of the NEA countries to integrate into NEAL-NET even if there is political will to do so. And yet, as the experience of combating the pandemic shows, restoring the normal functioning of the regional economy without the consolidated efforts of the authorities of all regional countries will require much more time and resources. For example, it is impossible to restore the tourism and recreation industry in NEA without a political agreement on the mutual recognition of the COVID-19 testing / vaccination certificates. To do this at the regional level is much easier and faster than waiting for the corresponding global initiatives from the UN, WHO, etc.
  • Russia, as noted above, occupies a special position in the GTI transport and logistics sector. The volume of Russian cross-border traffic in the GTR is significantly less than that of neighboring economies. However, the dependence of the Far East of Russia on imports from the NEA countries is high, which was shown by negative experiences of the periodic closure of selected ITCs during a pandemic. What is more important in the context of this article, the Far Eastern territories of Russia have a huge, but currently grossly underutilized transit potential, which is attractive for shippers from the NEA economies. The geographical position of the Russian Far East provides capacity to participate in the comprehensive infrastructural development of the entire GTR transport space, which is necessary for all segments of the regional logistics market: aviation, sea, river, rail and road transport, as well as for pipeline transport and other support infrastructure (energy supply, communications, etc.). Essentially, GTR is a basic communicative (transport & logistic) platform for NEA.[2]

The main ITCs in the North-East Asia are as follows (Fig. 1) [4]:

Fig.1. International transportation corridors in the NE Asia. Source: ERINA, 2010

Corridor 1. BAM Railway: Vanino seaport – Taishet – Siberian Land Bridge (SLB) (junction with Trans-Siberian Railway, TSR).

Corridor 2. Siberian Land Bridge (SLB): seaports in Primorsky Territory, Russia (Vostochny, Nakhodka, Vladivostok and others)– Europe/Central Asia.  SLB is primary attributed to TSR that is a main Russia’s West-East artery, with a highway running alongside almost the entire length of the TSR.

Corridor 3. Suifenhe Transport Corridor: seaports in Primorsky Territory – Grodekovo – Suifenhe — Harbin – Manzhouli – Zabaikalsk – SLB. The corridor provides Heilongjiang Province with an access to the Sea of Japan /East Sea using Russian ports and it is currently the main trade route between China and Russia.

Corridor 4. Tumen River Transport Corridor: seaports in Tumen River Area (Zarubino/Posiet/RaSon) – Changchun – East Mongolia – SLB. It has double entrance: Russian route (Zarubino and Posiet ports) and the North Korean route using the ports of RaSon. The niche of this corridor is to provide a new route to the sea for landlocked Northeast China’s provinces and fulfill a role as a complementary route for the Dalian and Suifenhe transport corridors.

Corridor 5. Dalian Transport Corridor: Dalian – Shenyang – Harbin – Heihe – Blagoveschensk – SLB. It is the main artery providing China’s three North-Eastern provinces (Liaoning, Jilin and Heilongjiang) with an outlet to a sea.

Corridor 6. Tianjin – Mongolia Transport Corridor: Tianjin – Beijing – Ulaanbaatar – Ulan-Ude – SLB. The corridor, being the most important international transportation route for Mongolia, is also used for transit transportation between Europe and Asia via the SLB.

Corridor 7. China Land Bridge (CLB) Transport Corridor: Lianyunggang Port – Kazakhstan – Europe. CLB links Japan and the Republic of Korea with Central Asia, consisting of a railway running across China to Kazakhstan and further to Uzbekistan. The railway line competes with the SLB in transport operations between East and Central Asia.

Corridor 8. Korean Peninsula West Corridor: Busan – Seoul – Pyongyang – Sinuiju – Shenyang – Harbin – SLB. The corridor, if developed, will link up with the Dalian Transport Corridor and reach Russia from Manzhouli to merge with the SLB. At present, the lines linking the ROK and DPRK are disconnected, so the corridor is not in operation. If activated, the corridor will provide direct overland linkage between the ROK and China.

[1] Research study was organized by the Korea Institute for International Economic Policy (KIEP) and supported by the secretariat of the “Greater Tumen Initiative” (GTI; regional program of economic development supported by UNDP  and UNESCAP), FEMRI, MSUN, KMI and ERINA. Dr. Mikhail Kholosha (MSUN, Russia), Dr. Lee Sung-Woo (KMI, Republic of Korea), Dr. Gotov Dugerjav (MUST, Mongolia), Dr. Gao Xiaoyun (RIOH, China) and Dr. Arai Hirofumi (ERINA, Japan) participated in this study as national experts.

[2] Based on the information specified in the  “Existing and Potential International Transportation Corridors in the Northeast Asia Region” report jointly prepared by GTI, FEMRI, KMI, KOTI and ERINA for The Inaugural Meeting of the GTI Transport Board (25 June 2010, Busan, Republic of Korea)

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