Once again, Russia displays its lavish soul turning a blind eye to its lendees. Thus, one more country using Russia’s credit enjoys a generous debt relief. Russia has agreed to write off the $9.87 billion debt accrued by North Korea during the Soviet times. Russia will "forgive" 90% of the debt. As for the rest of 10%, there is a question mark over its fate. It was decided to extend the debt repayment for the 20 years ahead. Moreover, Russia’s government pledged to reinvest it as a part of a debt-for-aid plan to boost North Korea’s economy. Thus, 10% of the debt amounting to $1.09 billion will not be refunded back to Russia’s treasury. The debt deal stipulates that the money will be allocated for energy, health care, and educational projects in North Korea. As it always happens in similar debt cases, the bulk was accumulated in the Soviet era. After the USSR collapsed, North Korea halted paying off its debt. “The money given to North Korea turned completely “dead” as it was never paid back. Therefore, it is easier to write it off and to take political advantage of it. Nowadays, amid the reviving negotiations between South and North Koreas, Russia aims to assert its position. Thus, Russia decided to take such an effort like a debt relief. So, Moscow shows that Russia does not mean to control North Korea by means of demanding for the debt repayment (by the way, China is pursuing the same policy). The Kremlin seeks to boost diplomatic ties with North Korea as an equal partner of the global community,” Alexey Maslov, professor and Chairman of the Oriental studies faculty at the Higher School of Economics commented on the government’s decision. Meanwhile, China has remained the last commercial and political partner of North Korea. Recently, Russia has determined its policy in this region setting itself off against most of the countries supporting South Korea economically and politically.
