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

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

Russia’s Prosecutor General to Review Legality of Baltics Independence

Move, announced Tuesday, has alarmed Baltic States and strained even further their increasingly tense ties with Moscow More

US Urged to Keep Up Pressure on Cuba Rights

Communist government continues to hold dozens of political prisoners, tightly restricts freedom of expression, uses threats, intimidation to discourage critics, according to activist groups 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.
Hate Groups Spread Influence Via Interneti
X
Mike O'Sullivan
June 30, 2015 8:20 PM
Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Syrians Flee IS Advance in Hasaka

The Syrian government said Monday it has taken back one of several districts in Hasaka overrun by Islamic State militants. But continued fighting elsewhere in the northern city has forced thousands of civilians from their homes. In this report narrated by Bill Rodgers, VOA Kurdish Service reporter Zana Omer describes the scene in Amouda, where some of the displaced are taking refuge.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video S. Korea Christians Protest Gay Rights Festival

The U.S. Supreme Court decision mandating marriage equality nationwide has energized gay rights supporters around the world. Gay rights remain a highly contentious issue in a key U.S. ally, South Korea, where police did a deft job Sunday of preventing potential clashes between Christian protesters and gay activists. Kurt Achin reports from Seoul.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video Nubians in Kenya Face Land Challenges

East Africa's ethnic Nubians have a rich cultural history that dates back thousands of years, but in Kenya they are facing hardships, including the loss of lands they have lived on for generations. They say the government has reneged on its pledge to award them title deeds for the plots. VOA's Lenny Ruvaga reports.
Video

Video Military Experts Question New Russian Tank Capabilities

Russia has been showing off its new tank design – the Armata T-14. Designers claim it is 20 years ahead of current Western designs - and driving it feels like playing a computer game. But military analysts question those assertions, and warn the cost could be too heavy a burden for Russia’s struggling economy. Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.
Video

Video In Syrian Crisis, Social Media Offer Small Comforts

Za’atari, a makeshift city in Jordan, may be the only Syrian refugee camp to tweet its activities, in an effort to keep donors motivated as the war in Syria intensifies and the humanitarian crisis deepens. Inside the camp, families say mobile phone applications help hold together families that are physically torn apart. VOA’s Heather Murdock reports.

VOA Blogs