SEOUL, South Korea, AP
South Korea will sign a contract to buy US$700 million worth of Russian military hardware and raw materials when Russian President Vladimir Putin visits Seoul next week, reports said Wednesday.
South Korea will pay US$350 million in cash and write off the other US$350 million from the US$1.8 billion debt Russia owes to it, said the national Yonhap news agency, quoting an unidentified government source.
Maj. Choi Tae-bok, a spokesman for South Korea’s Defense Ministry, said such a deal will be discussed during Putin’s Feb. 27-28 visit, but it was still too early to reveal details.
Seoul officials said earlier that Putin will also discuss detente on the divided Korean peninsula and economic exchanges with South Korean President Kim Dae jung.
The deal to be signed during Putin’s visit will require South Korea to buy US$500 million worth of Russian-made military transport, refueling and training airplanes, helicopters, hovercraft and other defense goods, Yonhap said.
South Korea will also buy US$200 million worth of helicopters for civilian use and aluminum and other Russian raw materials, it said.
In a 1990 deal linked with Moscow’s decision to establish formal relations with it, South Korea extended US$1.45 billion in loans to the former Soviet Union. Moscow has failed to repay most of the maturing loans, and interest accrued has swelled the total to US$1.8 billion.
In a debt-rescheduling deal in 1999, South Korea allowed Moscow to repay the outstanding loans by 2016 — half in military goods and technology and half in raw materials such as aluminum and pulp.
A few years ago, South Korea accepted several dozen Russian military tanks and helicopters as part of the loan repayment.
Most South Korean weapons are American-made.
Putin’s visit comes as Russia is trying to expand its role as a mediator between North and South Korea. Putin visited North Korea in July.