Russia writes off 90 percent of North Korea debt, eyes gas pipeline

So, now Russia makes another smart move to distance itself away from US autocracy via Korea.

Why not, they cannot pay anyway; a shrewd move that will cause trade and therefore stability while making money from a new gas customer, South Korea. Only problem is, one day North Korea maybe another Ukraine, a pipeline hog. In the meantime, they will be a protectorate of Russia. One imagines the US will be there to promise soon. And even China has missed the importance of this move, as the scramble is on for influence in Asia.

Deputies attend a session of the Duma, Russia's lower house of Parliament, in Moscow January 25, 2013.
Credit: Reuters/Sergei Karpukhin/Files

By Vladimir Soldatkin
19 April 2014

Russia's parliament has agreed to write off almost $10 billion of North Korea's Soviet-era debt, in a deal expected to facilitate the building of a gas pipeline to South Korea across the reclusive state.

Russia has written off debts to a number of impoverished Soviet-era allies, including Cuba. North Korea's struggling communist economy is just 2 percent of the size of neighbouring South Korea's.

The State Duma lower house on Friday ratified a 2012 agreement to write off the bulk of North Korea's debt. It said the total debt stood at $10.96 billion as of Sept. 17, 2012.

The rest of the debt, $1.09 billion, would be redeemed during the next 20 years, to be paid in equal instalments every six months. The outstanding debt owed by North Korea will be managed by Russia's state development bank, Vnesheconombank.

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