Putin Builds North Korea Rail to Circumvent Suez Canal

Vladimir Putin is inching closer to his goal of turning Russia into a major transit route for trade between eastern Asia and Europe by prying open North Korea, a nuclear-capable dictatorship isolated for half a century.

Russia last month completed the first land link that North Korea’s Stalinist regime has allowed to the outside world since 2003. Running between Khasan in Russia’s southeastern corner and North Korea’s rebuilt port of Rajin, the 54-kilometer rail link is part of a project President Putin is pushing that would reunite the railway systems of the two Koreas and tie them to the Trans-Siberian Railway.
That would give Putin partial control over links to European train networks 8,000 kilometers (5,000 miles) away. The route is as much as three times faster than shipping via Egypt’s Suez Canal, which handles 17,000 ships a year, accounts for about 8 percent of maritime trade — and is increasingly beset by pirates and political instability in Egypt and Syria.

“Shipping companies face higher costs to secure their cargo,” said Thomas Straubhaar, director of the Hamburg Institute of International Economics, in an e-mailed response to questions. “The rail route will get attractive if Russia increases efforts to ensure a secure and reliable transport on the long stretch between Asia and Europe. Customers don’t want their Porsche to be stolen along the way.

http://www.bloomberg.com/news/2013-10-15/putin-builds-north-korea-rail-to-circumvent-suez-canal.html

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