Russia to Forgive Most of North Korea's Debt
Russia to Forgive Most of North Korea's Debt
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Russia has reportedly decided to write off some 80 percent of the US$8 billion it is owed by North Korea, it emerged on Thursday. Russia’s Deputy Finance Minister Sergei Strochak and his North Korean counterpart Kim Young-gil reached the agreement in negotiations from Dec. 17 to 22 last year, diplomatic sources in Moscow said Thursday. The North wants most its debt to Russia forgiven, and the two countries agreed to discuss in detail via diplomatic channels how much of it will be written off and how to settle the rest of the debt and conclude negotiations before March, when an intergovernmental commission on trade and economic cooperation between the two countries meets.
North Korea borrowed 3.8 billion rubles from the Soviet Union since the 1960s to build power plants. Russia's Vneshtorgbank and the Foreign Trade Bank of North Korea agreed to estimate Pyongyang's debt to Russia at US$8 billion on the assumption that 1 ruble equals some US$2 considering interest and changes in the exchange rate.
"Russia earlier said it won’t continue economic cooperation unless the North pays its debt. But it changed its mind as it wants to relieve the financial burden on Pyongyang so it can persuade the North to take part in trilateral economic cooperation with South Korea and Russia and any six-party talks on North Korea's nuclear program in the future,†a diplomat said.
Moscow has become more active in engaging Pyongyang diplomatically. On Dec. 20 last year, the Russian Ministry of Industry and Energy asked Seoul to choose a government agency to support a project supplying surplus electricity in Russia’s far east to North Korea. "Russia wants to help North Korea deal with its electricity shortages with capital from South Korea,†a source said.
Moscow is to reappoint former ambassador to Japan Alexander Losyukov as its chief negotiator in the six-party talks. Losyukov visited North Korea for talks with North Korean leader Kim Jong-il as a special envoy of Russian President Vladimir Putin when the North withdrew from the nuclear Non-Proliferation Treaty in 2003. He was already head of the Russian delegation in the first and second rounds of the nuclear talks. Moscow has also appointed a new ambassador to Pyongyang, Valery Sukhinin, who is to take up his post on Jan. 20. Formerly a deputy director in the Foreign Ministry, Sukhinin translated for President Putin in summits with Kim Jong-il.
