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N. Korea Offers Debt Deal to Russia

Posted January. 24, 2007 06:20,   


North Korea is said to have offered Russia the rights to develop its underground resources and to lend its ports for free in return for writing off debts worth $8 billion (approximately 7.44 trillion won).

A Russian senior diplomatic official said on January 23, “North Korean officials met with Russian credit negotiators late last December to discuss giving the rights to develop the North’s mines and lending land in its ports for free.”

North Korea’s accumulated debt to Russia has reached $8 billion, including principal and interest. The two countries are expected to deal with details about Pyongyang’s debts in March when they hold the North Korea-Russia Commission on Economic and Technological Cooperation.

Officials from Pyongyang and Moscow have visited each other to hold debt negotiations and to estimate the amount owed to Russia. Pyongyang has borrowed from Russia since the era of the former Soviet Union.

Another source from the Russian diplomatic circle said, “During the discussion over the debts, North Korea offered Russia the rights to develop underground resources and suggested a lease of land in its ports, which shows Pyongyang intends to hand over these rights and earnings from leasing to Russia over a long period of time and also plans to give up profits from development.”

Since Pyongyang’s offer followed Moscow’s demand for payment of debts, the offer, if accepted by Russia, is expected to have an impact on the relationship between the two countries.

Eurasia Daily Monitor (EDM), a publication of the Jamestown Foundation, reported on January 22 that Russia’s emerging proactive economic approach toward North Korea, such as the decision to forgive debts, reveals Russia’s attempt to expand its influence over Pyongyang.