Russia is about to write off $8 billion of North Korean debt, according to South Korean news sources. Interfax had a chat with the Russian negotiator, who was surprisingly forthcoming:
“The only thing I can confirm is that negotiations on this issue did take place,” Anoshin said.
Analysts (in this case, the International Herald Tribune) are speculating that Russia wants to boost trade with North Korea. Currently, trade levels stand at around $50 million per year, down from a somewhat more impressive $2 billion per year in Soviet times. I’m somewhat sceptical, though, that trade will recover quickly enough to make this kind of debt write off economically viable for Russia, and I’m even more sceptical that Russia wrote off the debt out of the goodness of their hearts.
Instead, I think this has more to do with geopolitics, and will in some way be linked to North Korea’s nuclear programme. Whether the money that would otherwise be used to pay debts to Russia will be used to support the programme, or tear it down, however, is the big question…
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