Russia and North Korea have reached a settlement regarding North Korea’s $11 billion debt to Russia, Russian Deputy Finance Minister Sergei Storchak said Tuesday. According to Storchak, Russia has agreed to write off 90 percent of the debt amount. The remaining $1 billion would be used in a “debt for aid exchange plan” in North Korea. Moscow and Pyongyang have struggled with the issue of debt for years without resolution. The sudden deal comes as Russia is busy re-assessing its position and relationships in the Far East.

North Korea’s debt to Russia goes back to the Soviet era, when the two countries were strong allies. Pyongyang enjoyed Russian military and economic support against the pro-Western South. Moscow also helped Pyongyang balance its relationship with Beijing, which was juggling numerous conflicting relationships in the region, keeping it from automatically supporting North Korea. Following the Soviet collapse, Moscow’s attention was consumed by its own struggle for survival. In this vacuum, China became the North’s primary sponsor while its status throughout East Asia was on the rise.

Russia consolidated its power at home in the late 1990s and early 2000s, which allowed Moscow to once again focus on expanding its influence abroad. Thus far, its foreign policy emphasis has primarily been on the former Soviet sphere and the West. It has sought to re-establish a buffer zone in its so-called near abroad. Russia’s secondary focus has been on its Western flank, namely Europe. This is because the Russian heartland, which runs from the Volga region to Moscow, lies in western Russia. Its capital, agricultural belt and 80 percent of its population are located there. Moreover, the greatest threat to Russia in the Cold and post-Cold War eras came from NATO, whose members were concentrated to Russia’s west. 

But Russia cannot continue to ignore its eastern flank, particularly given the increased competition among a host of powerful Pacific Rim countries. With the bulk of global trade and militarization shifting toward East Asia, Russia must have a foothold in the region. Russia also fears that an East Asian power like China could encroach on Russia’s sparsely populated, resource-rich Far East. China is in fact expanding its power in Central Asia, in Russia’s far eastern city of Vladivostok, and along Russia’s border in Rason.

Russia, however, is far behind potential rivals in East Asia, including China, Japan, South Korea, Australia and the United States. Economically, Russia accounts for less than 1 percent of Pacific trade. Militarily, the Russian navy at Vladivostok is boxed in by South Korea and Japan. While Russia does have a large submarine base on Kamchatka Peninsula, the waters are filled with rival submarines.

Russia’s best bet for gaining influence in East Asia is via energy. As East Asia’s importance grows, so does many of its large players’ demand for energy, particularly China, Japan and South Korea. Russia is the second-largest natural gas producer and the largest oil producer in the world. It now plans to send oil east to China and its Pacific coast through pipelines that are currently under construction. Russia also has a liquefied natural gas export facility on the island of Sakhalin, and plans another for Vladivostok to be built by the Japanese.

Russia’s energy policies in the east and west differ. Russia is mostly tied to its Western customers — which make up nearly all of its export market — by pipeline. The physical connection to these countries is important given the greater competition among sea-based natural gas suppliers. In East Asia in particular, suppliers from the Middle East are competing to meet the region’s demand for natural gas, with Australia and the United States expected to join in soon. Russia can compete with such suppliers, but it will not gain the leverage it seeks.

So Russia is investigating the possibility of supplying East Asia with natural gas via pipeline. The obvious partner in this would be China, given the two countries’ shared 3,645-kilometer (2,264-mile) border. But Russia isn’t looking to supply just one country, and this is where the deal to forgive North Korea’s debt becomes important. Should relations eventually become warmer between North Korea and its neighbors, Russia could run a pipeline from North Korea to South Korea, and perhaps on to Japan. Though this is a long way off, small steps like getting the debt issue out of the way will bring that day closer.

In the end, Russia is looking for strategic influence in the region, not to become an East Asian power. Russia’s geography locks it into a European orientation. As Russian Foreign Minister Sergei Lavrov said going into the Asia-Pacific Economic Cooperation summit in early September, “There can be no talk about reorientation, because we are already oriented toward the West, the East, the South, and the North due to our fate, geography and history and due to our predecessors’ activities… We are not talking about doing all this [in the Far East] and forgetting what takes place in our relations with our European partners.” Still, maintaining leverage in East Asia not only protects that eastern flank from rising powers, it also allows Russia to avoid focusing the sale of its resources westward alone by tapping into growing opportunities in the East.