Russian and North Korean Troops - "As Close As Lips and Teeth"
Friend With Needs | Scratch My Back & I’ll Scratch Yours | China, Enabler in Chief
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“Barbershop Whispers….Russia (BWR)” begins with “My Takeaways” on the main topic, followed by a discussion on the main topic. The last two BWR sections are “Follow-ups” on previous publications and “Quick Bites” on emerging events.
In last week’s BWR, I discussed the potential merger of Rosneft, Lukoil, and Gazprom Neft. Discussions have allegedly been ongoing for several months. What are the drivers and challenges to creating this mega oil producer?
In this week’s BWR, I discuss the Kremlin’s political and economic benefits of North Korean troops in Putin’s war on Ukraine.
Takeaways
DURABLE RELATIONSHIP—Rekindling an old Soviet relationship like it was only yesterday. Russian President Vladimir Putin and North Korean Leader Kim Jong Un have a common cause and complementing needs and resources. This relationship will continue after Putin’s war.
WIN WIN—Financially and politically, everyone wins: Russia, North Korea, and China. Putin delays another mobilization, Kim receives cash and battle experience, and Xi transfers the North Korean financial burden to Putin.
Russian and North Korean Troops - "As Close As Lips and Teeth"
Friend with Needs | Scratch My Back & I’ll Scratch Yours | China, Enabler in Chief
Background
Mao Tse-tung famously described the relationship between China and North Korea as "as close as lips and teeth." This description was made in the early 1950s, during and after, the Korean War.
This relationship eventually led to the 1961 formalized alliance with the signing of the Sino-Democratic People's Republic of Korea (DPRK) Mutual Aid and Cooperation Friendship Treaty.
Just days before signing the alliance with China, the ‘Eternal President’ Kim Il Sung signed The Treaty of Friendship, Co-operation, and Mutual Assistance with the Soviet Union. Both treaties obligated China and the Soviet Union to render military and other assistance to North Korea against outside attacks. The treaty with China was renewed by Chairman Xi Jinping and Kim Jong Un, while the treaty with the Soviet Union expired due to the collapse of the Soviet Union.
The Soviet Union’s support for North Korea during the Cold War was extensive. The Soviet Union was the first to recognize the North Korean state in 1949 and supplied fighter pilots and matériel to North Korea and China during the Korean War. The Soviet Union was North Korea’s biggest trading partner, peaking at 60% of all trade by 1988.
For decades, Kim Il Sung exploited the tense Sino-Soviet relationship to North Korea’s advantage, a strategy that his grandson, Kim Jong Un, continues to implement today successfully.
A Friend With Needs
In 2000, Vladimir Putin was the first Russian president to visit North Korea. In 2001, Kim Jong Un’s father, Kim Jong-Il, reciprocated Putin's visit by traveling by train to Moscow and again to Vladivostok in 2002. A trip that Kim Jong Un recently traveled as well.
It has taken Putin nearly 24 years and delicate diplomacy with Xi and Kim to re-establish the Russian-North Korean relationship. Putin’s war on Ukraine and Western sanctions on both Russia and North Korea accelerated the diplomatic process. It helped solidify the relationship, bringing us to where we are today with North Korean matériel and troops in Russia.
In the BWR publication, I discuss the likelihood of North Korean ‘volunteer’ troops participating in Putin’s war on Ukraine after Putin and Kim signed the Strategic Partnership. In June 2024, Putin and Kim Jong Un signed the Treaty on Comprehensive Strategic Partnership between the Russian Federation and the Democratic People's Republic of Korea (DPRK), which the Russian state Duma ratified in November 2024. Article 4 of the 23 articles in the treaty states,
“in case any one of the two sides is put in a state of war by an armed invasion [. . .], the other side shall provide military and other assistance with all means in its possession without delay,”
While it is similar to the 1961 treaty with the Soviet Union, which lapsed in 1991, a key differentiator is the precondition that it must be with Article 51 “in accordance of the UN Charter and the laws of the DPRK and the Russian Federation.” The 1961 treaty had an automatic intervention provision without any Article 51 provision.
Scratch My Back, I’ll Scratch Yours
Western sanctions, money, and a disdain for the US Western-dominated economic and political order are what bring Putin and Kim together. The same grievances bring together Moscow, Tehran, Havana, Caracas, and to a much lesser degree China. Russia and North Korea are the most Western-sanctioned countries in history, and this places limits on their ability to trade in the global economy and procure cutting-edge technologies for their military-industrial complexes.
However, North Korea is a special Russia friend, unlike the others, because it has valuable resources for the Kremlin; North Korea is a friend indeed in Russia’s time of need – munitions and human fodder for Putin’s war. North Korea’s internal frictionless deployment and the procurement costs of its resources appeal to the Kremlin. Kim has complete control over the state and the people and can deploy resources at will.
Time is of the essence for the Kremlin. The military-industrial plants are running at full capacity; soldiers and munitions are in short supply. Putin is reluctant to call another mobilization out of concern for pushback from the Russian people. Putin’s war was supposed to be a “Special Military Operation,” not a war.
To put North Korea’s troop resources into perspective, it has the world’s largest standing army, roughly 1.2 million, with several million more reserves. The Kim regime also fields the world’s largest special forces unit, around 200,000.
Kim is always hungry for cash and technology to support his weapons program. Another benefit to Kim is battlefield experience for his troops. Dr. Kathryn Weathersby (Podcast), Adjunct Professor of Asian Studies in the Edmund A. Walsh School of Foreign Service at Georgetown University and specialist on the Korean War and the history of North Korea, said in an e-mail to BWR,
“North Korean troops fighting in Ukraine is very beneficial to Kim — providing training and battlefield experience with the weapons North Korea can now get from Russia. This could be something Russia is obliged to provide in exchange for the ammo and other equipment it’s getting from NK.”
The Wall Street Journal (WSJ) has reported that North Korean soldiers sent to Russia are expected to be paid $2,000/month, of which most will go to the Kim regime, according to South Korean officials. With 12,000 troops deployed, this amounts to $24M. The Kremlin's financial cost-benefit is significant compared to the average Russian contract soldier’s compensation. Signing bonuses for Russian contract soldiers alone is $30K. Politically, North Korean troops insulate the Russian public from the war by reducing the likelihood of troop mobilization. However, one should keep in mind that Russian war casualties average 1,500 daily, which means if these troops go into battle, they will be done in 8 days. How many more troops will North Korea send, and will they go into the Ukrainian battlefield?
China, Senior Partner and Enabler
China’s primary concern is the stability of the Korean Peninsula. Equally important is preserving its standing within the global economy, where it is arguably the second-largest economy in the World.
As the Russia/North Korea relationship deepens, it is also essential to understand the region's trade dynamics. China represents 97% of North Korea’s trade, essentially a monopoly. In 2022, North Korean exports to China totaled $134M—57% of which were wigs, false beards, eyebrows, and lashes, representing 86% of China’s imports. This contrasts with $1.4B in exports from China to North Korea. In the meantime, South Korea has become more economically significant for Russia and China. In 2022, Russia’s trade with South Korea (mainly energy exports) totaled $21B, while China’s trade with South Korea reached $310B. China is Russia’s leading crude oil export market, and South Korea is China’s third biggest trading partner.
It is widely believed that China was well aware of the North Korean troop deployment. It is unlikely that Putin would risk his “No Limits” friendship with Xi, even in desperate times like now. On the other hand, Kim has demonstrated that he could escape from the ranch. A case in point is when he surprised Beijing with a declaration that North Korea is a nuclear state.
Conclusion
Anyone familiar with Putin and Kim’s grievances with the West and their past actions should not be surprised to learn that North Korean troops are in Russia and may well be deployed into Ukraine. Putin has essentially given up on any genuine reconciliation with the West, understanding that he will never be accepted as an equal, an affirmation he has craved since he took office in 2000.
For Putin, North Korean troops deliver many political and financial benefits at home and abroad. At home, Putin can defer mobilization calls and get some relief from the Russian labor shortage driving inflation. The Western shock value alone pays in spades against a timid West that shivers anytime Putin rattles the nuclear sabers.
Twelve thousand North Korean troops added to Putin’s troops will not materially change the Ukrainian battlefield dynamics unless augmented with a steady supply of troops.
It remains to be seen if North Korean troops will be deployed into Ukraine and if there will be a continuous flow of troops from North Korea.
Additional Reading(s)
The Emerging Alliance of the Aggrieved – Russia and North Korea (Barbershop Whispers…Russia, 23 Jun 2024)
N. Korea’s new pact with Russia is ‘mirror image’ of Yoon’s alliance with US (Hankyoren, 21 Jun 2024)
The Moscow-Pyongyang Connection, Then and Now, with Dr. Kathryn Weathersby (The Korea Society, 29 Oct 2024)Additional Reading(s)
“No Limits” Limits of the Putin and Xi Friendship (Barbershop Whispers…Russia, 29 Oct 2023)
China was well Aware of North Korea Troop Deployment (Kyiv Independent, 14 Nov 2024)
North Korea’s Importance for Putin’s “Turn to the East” (38 North, 25 Oct 2024)
Follow-ups & Quick Bites
Follow-ups
The Russian Mir Payment System Connected to Iranian Shetab
The Russian payment system Mir has been connected to the Iranian Shetab system, allowing Iranian cards to be used in Russian ATMs.
Mohammad Reza Farzin, Governor of the Central Bank of Iran, said,
“This project represents a successful model for using and expanding local infrastructure. It shows that international interactions can be developed in the direction of de-dollarization and in an unauthorized way,”
Additional Reading(s)
Iran, Russian Payment Systems Connected (Tehran Times, 11 Nov 2024)
Iran and Russian National Payment Systems (China Daily, 11 Nov 2024)
Germany Rejects Russian LNG Shipment
Germany refused a Russian liquefied natural gas shipment at the Brunsbuttel terminal, which aligned with Berlin’s policy not to import LNG from Russia. The Financial Times reported that Germany’s economy ministry BMWK had instructed the Deutsche Energy Terminal not to accept any deliveries of Russian LNG after the company informed Berlin that its Brunsbuttel import facility was set to receive a Russian cargo.
It was not clear who ordered the shipment. Three LNG tankers recently left the Yamal LNG facility in Russia and are awaiting orders, LSEG data showed.
“The cargo was destined for Brunsbuttel, and someone tried its luck, and it seems wanted to check how Berlin would react,” an industry source told Reuters, adding that this is “a bit of political PR stunt.”
It relied on LNG from the United States and elsewhere to replace Russian gas and pipeline gas from Norway.
While Germany no longer directly imports Russian gas, it is the ultimate destination for some Russian gas injected into pipelines by other EU countries via Belgium’s Zeebrugge and other terminals.
Last year, Germany imported 48.6% of its gas via pipeline from Belgium, France, and the Netherlands, according to the federal network regulator Bundesnetzagentur.
Additional Reading(s)
Germany Rejects Arrival of Russian LNG Shipment at Brunsbuttel Terminal (Swissinfo.ch, 14 Nov 2024)
Russia Struggles with Changing Gas Market (Barbershop Whispers…Russia, 10 Mar 2024)
Netanyahu Confidant Visited Russia Amid Lebanon Ceasefire Efforts
Strategic Affairs Minister Ron Dermer ‘secretly’ visited the Kremlin last week to discuss a ceasefire in Lebanon.
Russia is a major player in Syria, and its relations with Iran and Hezbollah could influence a deal with Israel.
It should be noted that Syria is a key weapons supply route for Hezbollah, and Russia provides Syria with on-the-ground missile defense systems. Tartus, Syria, is also Russia’s only Mediterranean naval base.
Additional Reading(s)
Top Netanyahu confidant visited Russia last week amid Lebanon ceasefire efforts — report (The Times of Israel, 10 Nov 2024)
Gazprom to Stop Deliveries to Austria
Gazprom has informed Austria’s OMV that it will suspend pipeline gas deliveries on 16 Nov 2024. OMV said the volume affected amounts to up to 500 million cubic meters (MCM) per month. A key factor in Gazprom's decision was OMV’s €230M arbitration award against Gazprom. OMV has stated it intends to enforce the award by offsetting the claim against invoices from Gazprom.
Austrian Energy Minister Leonore Gewessler noted that Austria’s current gas inventories are more than a year’s demand, at 9.6 BCM. According to the Energy Institute’s 2024 Statistical Review of World Energy, Austria consumed 6.9 BCM in 2023.
OMV has also been preparing this event for some time and has reiterated that it can meet future gas needs through the Norwegian piped gas and contracted LNG volumes.
Additional Reading(s)
Gazprom Halts Deliveries to Austria’s OMV (Energy Intelligence, 15 Nov 2024)
Quick Bites
Black Sea Naval Capital Killed in Car Bombing in Crimea
A car bomb sent Valery Trankovsky, Russian Naval capital responsible for the 41st brigade, through the roof of his vehicle in Russian-occupied Crimea.
The Security Service of Ukraine (SBU) has claimed responsibility for the attack and justified the attack as retribution for Trankovsky’s missile strikes on civilian targets in Ukraine.
Additional Reading(s)
Senior Russian naval officer killed in car bomb hit claimed by Kyiv (Reuters, 13 Nov 2024)
Russian Navy Officer Liquidated in Sevastopol (Kyiv Independent, 15 Nov 2024)
Russia Aids Brotherly Cuba with Diesel
According to the Russian state-run RIA news agency, Russia has pledged to provide Cuba with approximately 80,000 tonnes of diesel fuel worth $60M to help alleviate the country’s energy crisis.
Cuba's dilapidated electric grid collapsed again as Hurricane Rafael moved across the island. Russian Deputy Prime Minister Dmitry Chernyshenko said,
"Russia is ready to provide brotherly Cuba with emergency assistance in connection with the current situation in the energy sector, including the supply of about 80,000 tonnes of diesel fuel for the amount approved by the president's instruction - $60M."
Last week, Cuban authorities said they had begun restoring power to the island's eastern half.
Since February 2024, the Kremlin has promised to build a new refinery and ship 30 tonnes of oil to Cuba each month. What has happened to these brotherly projects?
Additional Reading(s)
Russia to Aid Hurricane-Hit Cuba With Diesel Fuel (Reuters, 8 Nov 2024)
New Russian oil Refinery Construction (Cuba Si, 27 Jul 2024)
Vol 2, No 55 - BWR 17.11.2024
Thank you for reading “Barbershop Whispers....Russia” written by Adam A Blanco! “Barbershop Whispers…Russia” is a product of e8Q Technologies, a consultancy with insights on all things Eurasia. Subscribe for free to receive new posts.