Russia wrote off 90% of North Korea's debt

Today, the State Duma ratified the Russian-Korean agreement, according to which the DPRK is forgiven 90% of the debts accumulated since the 1950s. The total amount of debt is 10 billion 94 million dollars. The balance of the debt in the amount of 1 billion 90 million will be paid every six months by crediting to an interest-free account with Vnesheconombank.

According to Deputy Finance Minister Sergei Shatalov, "such a construction" will allow the restoration of trade and economic relations with the DPRK, reports . the press service of the State Duma

The funds will be used to implement joint projects in the field of energy, healthcare and education in North Korea itself. The two main joint projects are a gas pipeline through the territory of North Korea to South Korea and a railway connection.

The settlement of the North Korean debt will solve three problems at once, a Kommersant correspondent believes .

First, the long-term tension in relations between Russia and North Korea will be removed. Secondly, through the implementation of joint projects, Russia will be able to influence the socio-economic situation in North Korea, since the decision on financing is made by the Russian side. And, thirdly, due to the presence of sufficiently large debt claims, the Russian Federation will be able to participate in multilateral negotiations on the settlement of the DPRK's debt within the framework of the Paris Club of creditors.

The agreement was signed on September 17, 2012, but until October 2013 it was confidential. Negotiations to settle the debt lasted a total of 20 years, according to an explanatory note to the agreement.