Wednesday, June 5, 2019

Financial guru bullish on massive project stifled by North Korea's nuclear crisis

Imagine driving from Tokyo all the way to Paris. It sounds crazy, but that’s just what some of the world’s top international investors say could one day become reality — if the North Korean nuclear crisis ever gets resolved.

President Trump speaks broadly of the “awesome” potential for economic development if North Korean leader Kim Jong-un gives up his nuclear weapons. Although talks have stalled, some big-market players are keen to paint a colorful picture of what “awesome” might look like.

Singapore-based financial guru Jim Rogers is pushing perhaps the most enticing proposal: a vast undersea tunnel hopscotching South Korean and Japanese islands in the Korea Strait, which even at their closest point are nearly 80 miles apart.

Such a project would shatter engineering records and dwarf current record-holders as the world’s man-made subterranean passage — the 3-year-old Gotthard Base Tunnel, which stretches 35.5 miles beneath the Swiss Alps. It would also surpass the 33-mile Seikan Tunnel, which connects the Japanese islands of Honshu and Hokkaido and features a nearly 15-mile section running beneath the seabed.

“Think railways and highways with links going up through North Korea, across Russia and all the way to Paris and Rome,” Mr. Rogers told The Washington Times in a recent interview.

He freely acknowledges the obstacles, both physical and political, to such a route, not least of which is the heavily armed Demilitarized Zone that has blocked the passage of goods, people and everything else between the two Koreas since the early 1950s.

But echoing Mr. Trump, Mr. Rogers speaks openly of the vast economic potential that would be unleashed if the Korean Peninsula is denuclearized and “the problem of the 38th parallel is no longer an issue.”

Tourism and trade could flow freely through such a tunnel, he said, paving the way for the land-based movement of goods between Europe and the farthest, most profitable reaches of East Asia, at speeds far greater than imaginable in today’s world of seafaring cargo ships.

“It could happen in our lifetime,” said Mr. Rogers, 76, an American businessman and heavyweight financial commentator perhaps best known as a co-founder of the Quantum Fund and Soros Fund Management. He spoke at a conference last week in Seoul looking at the economic prospects that a peaceful Korean Peninsula could generate.

“Railroads on the west and east coasts of South Korea are already being built,” he said. “So you could put goods on a train in Japan and make it to Berlin in a matter of three weeks. It’s going to save an enormous amount of time.”

Three weeks is less than half the roughly 50 days it takes today for goods from Japan to make it to Europe by ship, traversing some 13,000 nautical miles through the Indian Ocean, the Suez Canal and the Mediterranean.

Anything is possible. China, for instance, drew global attention last year by inaugurating what is now called “the world’s longest sea bridge,” a 34-mile expanse of bridge and tunnel stretching from Hong Kong to the city of Zhuhai on the Chinese mainland.

Daunting landscape

A South Korea to Japan tunnel would be nearly three times as long and faces a far more daunting political and diplomatic landscape.

After war rhetoric soared in the early months of his administration, President Trump has changed the dynamic of the crisis with his unprecedented face-to-face summit with Mr. Kim that was supported by South Korea.

But an unsuccessful second summit in Vietnam in February and a subsequent round of short-range missile tests by Pyongyang have cast a deep shadow over the talks, even as Mr. Trump insists he remains committed to his diplomatic path.

“The danger of harsh talk slipping suddenly into all-out war is much greater today than it has ever been,” former CIA Director James Woolsey said last week.

“The reason for this is that the speed at which information, misunderstandings and events move in the world of advanced technology is unprecedented,” Mr. Woolsey, who headed the CIA during the Clinton administration from 1993 to 1995 and more recently advised Mr. Trump’s 2016 presidential campaign, told an audience in Seoul.

He spoke at a “Rally for the Peaceful Reunification of Korea.” The event in Seoul was headlined by a speech from Hak Ja Han Moon, widow of Rev. Sun Myung Moon, the leader of the Unification movement founded in 1954, a year after war between North and South Korea was frozen by a U.S.-backed armistice. Rev. Moon was a longtime proponent of the South Korea-Japan tunnel and first broached the idea of a “Great Asian Highway” nearly four decades ago.

In a presentation Friday at an international leadership conference on the sidelines of the reunification rally in Seoul, analysts predicted that a South Korea to Japan tunnel could be completed in as little as 10 years with the right mix of government support and private capital.

Yoshimitsu Nishikawa, a professor at Tokyo University in Japan, noted that others besides Rev. Moon have pushed for the tunnel project and projected that it would cost “approximately $100 billion” to create “a magnificent undersea tunnel connecting the [80 miles] of sea separating Japan and Korea.”

The notion of such a tunnel has been bounced around for more than a century, but it wasn’t until the 1940s that serious planning documents emerged with the idea of a tunnel crossing the Korea Strait, with possible stopping points at Iki and Tsushima — two tiny islands in the strait between the Korean Peninsula and Japan.

The Japanese and South Korean governments — despite a history of prickly bilateral relations on a range of issues — have given the proposal serious review over the past decade, although it has struggled to gain traction given the crisis in North Korea and the international sanctions on its economy.

But Mr. Rogers said the slowdown in diplomacy with North Korea is “a blip that when we look back in 20 years, nobody will even remember.”

“Everyone wants the 38th parallel to come down at this point. China wants it, Russia wants it, North Korea and South Korea want it,” he said, noting that the past year of North-South detente has created a situation in which “the North and the South have started removing lots of land mines and guard posts” that had been permanent fixtures of the Demilitarized Zone for more than five decades.

- Source, Washington Times