News / Asia

Russia Forgives North Korean Debt

FILE - Russian President Vladimir Putin at event in St. Petersburg, June 5, 2014.FILE - Russian President Vladimir Putin at event in St. Petersburg, June 5, 2014.
x
FILE - Russian President Vladimir Putin at event in St. Petersburg, June 5, 2014.
FILE - Russian President Vladimir Putin at event in St. Petersburg, June 5, 2014.
VOA News
Analysts say Moscow's decision to forgive most of North Korea's debt is aimed at clearing a path through the secretive state for a natural gas pipeline from Russia to South Korea.

Russian President Vladimir Putin last month forgave 90 percent of North Korea's $11 billion debt. He also allowed Pyongyang to use payments on its remaining debt balance for health, education and energy programs of its own.

Several experts say they believe this is an attempt by Russia to win favor with North Korea to get a pipeline agreement.

Scott Snyder, director of the Program on U.S. Korea Policy at the Council on Foreign Relations, said this is something Russia has long wanted. He said it was discussed "back in 2011 between then [Russian] President [Dmitry] Medvedev and [North Korean leader] Kim Jong Il.”

Synder added that it was again discussed by Russian President Vladimir Putin and South Korean President Park Geun-hye at a summit late last year. “So I think that there is interest on both the Russian and the South Korean sides in doing something,” he said.

International Investment Strategist Tom Elliot at the deVere Group's London office said the Russians are “very serious” about making this happen.

“You saw the keenness with which Putin followed up on a very long standing idea with China," Elliot said, adding that Beijing and Moscow reached an “agreement last month on running a gas pipeline into China.”

Elliott also explained how Russian efforts to find new energy markets accelerated after the West's negative reaction to the Kremlin's annexation of Crimea and current tensions in eastern Ukraine.

Snyder says North Korea also had motivations of its own to work with Russia on the debt issue, which has lingered since the fall of the Soviet Union. 

This is "a way of clearing out the underbrush in order to draw in more Russian investment to North Korea,” he said.

North Korea only agreed to a repayment plan after Russia offered debt forgiveness and said payments on the balance could be spent by Pyongyang on domestic infrastructure programs.

According to various reports, North Korea's Soviet-era debt would be worth $238 million if valued at the current market price. But according to Elliott, North Korea agreed to the higher valuation in hopes of attracting future foreign investment.

Elliott explained, “If you're a country that actually wants to encourage international investment to grow ... you don’t want to be seen as buying up your debt on what’s called the secondary market at two cents on the dollar.” He said doing that "is considered very poor etiquette, indeed.”

You May Like

Elusive Deal With Iran Could Yield Foreign Policy Legacy for Obama

A new Iranian leader -- and a strategic shift by the United States -- opens narrow window for nuclear agreement with Tehran More

Column: Saudi-Iran Meeting Could Boost Fight Against Islamic State

The fact that Iranians and Saudis are talking again does not guarantee a breakthrough, but it could make it easier to build a broad coalition against IS More

Thai Ruler Gives Top Cabinet Posts to Junta Inner Circle

Thailand's army chief has kept an iron grip on power as he extends the government, hand-picking an interim parliament that subsequently nominated him prime minister More

This forum has been closed.
Comment Sorting
Comments
     
by: Kimchi Law Blog from: South Korea
June 19, 2014 2:42 AM
Of course having 90% of your loan written-off isn't exactly stellar for investor confidence, but a win is a win....

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid