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Putin Signs Off on Debt Write Off

Lee Sang Yong
2014-05-06 14:16  

Russian President Vladimir Putin has ratified an agreement to write off 90% of North Korea’s outstanding debts after Russia’s lower house of parliament the State Duma approved the motion last month.

According to a report published by RIA Novosti on the 5th, North Korea currently owes Russia approximately US$11bn in Soviet era debts.

The remaining 10% is expected to be paid back in six month installments over the next 20 years.

Payment will be transferred from North Korea’s Foreign Trade Bank to an account at the Russian Development Bank. Russia is set to invest back into North Korea's health, education and energy sectors, the report claimed, implying further economic cooperation between the two countries.

Meanwhile, Russian Deputy Finance Minister Sergei Storchak told media last month that funds received by the North may be channeled into the construction of a railway or natural gas pipeline connecting Russia to South Korea via the North.