Seoul to use part of debt for Russian armaments

South Korean soldiers will be carrying more Russian-made weapons.

The government has signed a provisional contract for $534 million in arms with Moscow, government sources said Monday. The equipment will be supplied in part for credit on outstanding Russian debts.

According to the Ministry of National Defense and the Ministry of Finance and Economy, Seoul and Moscow plan to sign a formal contract after the two governments meet in early September to negotiate a settlement of Russia's outstanding debts to Korea. Russia owes $1.95 billion, including back interest, on overdue debts to South Korea; Seoul extended $1.47 billion in loans to the Soviet Union in economic cooperation packages in 1991.

The National Defense Ministry will pay $267 million, half of the total weapons purchase price, in cash; the rest will be deducted from the debt balance.

The armed forces plan to import six kinds of Russian-made military equipment; the air force will be equipped with KA-32 search-and-rescue helicopters; the army will buy BMP-3 armored infantry combat vehicles and T-80U tanks.

"We have negotiated with Russia on this deal since late 2000," a defense official said. "Seoul originally planned to buy 3,000-ton submarines from Russia, but the deal collapsed."

The new arms are expected to be deployed; weapons that South Korea bought from Russia in 1995 have been used only in training.

by Kim Min-seok