Eyeing Pipeline, Russia Forgives North Korean Debt


Zachary Zeck
The Diplomat
April 23, 2014

On Friday Russia’s parliament voted to write off roughly 90 percent of North Korea’s debt as Moscow seeks to build a gas pipeline through the Hermit Kingdom.

Credit: James T M Towill

Credit: James T M Towill

This weekend Reuters reported that Russia’s Duma voted to write off roughly $10 billion worth of the debt that North Korea owes Moscow from the days of the Soviet Union. The vote ratified an agreement made in September 2012, after a meeting between then-President Dmitry Medvedev and then-North Korean leader Kim Jong-il in Siberia in the summer of 2011.

At the time the agreement was first announced, The Guardian reported, citing Russia’s Finance Minister Sergei Storchak, that Moscow would forgive “90% of the debt and reinvest $1bn as part of a debt-for-aid plan to develop energy, health care and educational projects in North Korea.” Russian experts hailed the agreement as a sign that North Korea’s leadership was looking to initiate market style reforms in the reclusive country.

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