Russia Opens North Korean Rail Link for ‘Iron Silk Road’

The top executives of both countries state train operators inaugurated a route today that links the North Korean port city of Rajin with the Russian border town of Khasan. Initially, the 54-kilometer (33-mile) line will transport Russian coal to markets in the Asia-Pacific region, OAO Russian Railways Chief Executive Officer Vladimir Yakunin said at the ceremony in Rajin. The second phase of the project will involve the construction of a container-handling facility and potentially an oil terminal at the North Korean site, he said. Our common objective is for this link and port to be a pilot scheme for the restoration of a single transport system in North and South Korea that would link the peninsula to countries that gravitate to this region, to Europe via Russia, Yakunin said. The CEO said he hopes the plan will help promote peace between the two Koreas, which remain technically at war following the conflict 1950-53 that divided the countries. The route is part of a larger project, dubbed the Iron Silk Road, that would connect Russia s Trans-Siberian Railway to South Korea via the North for an overland route cutting transportation costs to Europe. Success depends on improved ties between South Korea and its isolated Communist neighbor. Reunions Scrapped North Korea canceled plans today for reunions this week of families separated by the division of the peninsula, and accused South Korean leaders of throwing obstacles in the way of reconciliation. The North also put off talks on resuming tours by South Koreans to its Mount Geumgang resort after recent weeks of improved relations between the two sides. Kim Jong Uns regime accused the South of seeking confrontation, and threatened strong and decisive retaliation against any military provocation. The Khasan-Rajin rail link will carry 100,000 freight containers a year, the Norths official Korean Central News Agency reported in April 2012. The freight terminal at Rajin will be able to handle 4 million tons a year of coal, Yakunin said today, including shipments for OAO Mechel , Russias biggest supplier of the material for steelmakers. The new rail connection will promote the joint economic and transport development of the two countries and welfare of their peoples, North Korean Railways Minister Chon Kil-su said. To contact the reporter on this story: Ekaterina Shatalova in Rajin, North Korea , via eshatalova@bloomberg.net To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net More News:

Life expectancy for men, still among the lowest in Europe at 64, has increased by five years since 2003. The birth rate has also picked up, from 1.3 children per woman in 2003 to 1.69 today. Russia’s population, which has fallen by 5 million since 1991, has been rising since 2009. The demographic turnaround partly reflects policy measures, such as maternity grants, designed to encourage more births. Russia also plans to address other acute problems, such as low pay for public servants. “The absolute priority is the level of pay for teachers and doctors,” said Golodets. Before his return to the Kremlin last year, Putin promised to double salaries for teachers and doctors by 2018, to increase maternity benefits and to open more kindergartens. Financing for these priority programmes is being increased, notwithstanding a recent economy drive forced by slowing economic growth and tight government finances. “I’m satisfied, because all the key obligations (spending)are fulfilled in their entirety,” said Golodets, after the cabinet last week signed off on savings in its three-year fiscal plan. LABOUR SHORTAGE For many years, Russia’s deep-seated demographic problems appeared to impinge little on its once fast-growing economy. But with a slowdown coinciding with record low unemployment, the shrinking labour force has emerged as a pressing economic and social problem. “We are now suffering from a severe labour shortage,” Golodets said. Due to a record low birth rate at the start of the 1990s, when the Soviet Union’s collapsed, the number of new entrants to the workforce is at a two-decade low. To help address the labour shortages, Russia has earmarked 45 billion roubles ($1.4 billion) over three years to encourage employers to take on workers in depressed regions, young people and the disabled, including funds for training, she said. Golodets said the government is cracking down on widespread employment of illegal immigrants in casual work such as on building sites, saying labour productivity in Russia could rise by 70 percent if such jobs were made legitimate.

Russia ready to send military observers to Syria

However, the Russian official said his country is not considering sending a full military contingent. Under a US-Russian plan, Syria is to give up its chemical weapons. Security is one of the plan’s major challenges, including how to prevent theft of the weapons. In an interview broadcast on Sunday on state TV’s Channel One, Lavrov said Russia has proposed that there be an international presence on the perimeter of all areas where chemical weapons experts will work in Syria. “We are ready to share our servicemen and military police to participate in these forces,” but “it seems to me that military observers will be sufficient,” he said. Although Russia and the US worked together on the chemical weapons plan, Washington and Moscow remain at odds over several aspects of the Syrian crisis. The United States, along with France, have sought a UN security council resolution that would authorize the use of force, if Syria reneges on the chemical weapons agreement, but Russia opposes invoking the UN charter’s Chapter 7 which would allow force. Lavrov criticized what he called “impudent” attempts by the west to include that chapter in the resolution. The minister said the west is unable to admit that previous military interventions, such as in Iraq and Libya, led to severe problems. “They are primarily interested in the evidence of their own superiority . And is not the task that drives us to solve the problem of chemical weapons in Syria,” he said. Mortar lands inside Russian mission A mortar round landed inside the Russian embassy compound in Damascus on Sunday, state media said. Russia is a leading backer of Syria’s President Bashar Assad and rebels fighting to topple his regime have previously targeted the diplomatic mission in Damascus with rockets and mortars.