0735GMT//North Korea's Kim opens waterpark for Russians; a hidden banking debt crisis lurks

NORTH KOREAN WATERPARKS: North Korean dictator Kim Jung-un hosted the Russian ambassador at the opening of a new waterpark aimed at attracting Russian tourists. Photographs showed Kim, with an ashtray and a packet of cigarettes on a table to his side, watching a man demonstrate sliding down a waterslide. (COMMENT: Holidays to waterparks in North Korea are already being advertised in Russia. North Korea wants to build a tourist industry based around Russians. This winter it advertised itself as a ski destination for Russians blocked from the Alps. Commercial train and aviation links between Russia and North Korea are starting up.)

NORTH KOREAN WORKERS: A Russian construction official on Thursday praised North Korean workers as "being the best" because they work up to 15 hours a day and only have one day off a week. The senior official at Eskadra also told Russian media that there will be 50,000 North Koreans working in Russia's construction sector by the end of the year, up from around 15,000. (COMMENT: This is not only a rare insight into North Korean worker practices but also a rare insight into the impact North Korean workers are having in Russia. Most of Russia's migrant workers are from Central Asia, but the Kremlin is desperate to plug shortages caused by its war in Ukraine and has started to import thousands from North Korea. The data is patchy but North Korean dictator Kim Jung-un personally sent 15,000 workers to farms in Far East Russia earlier this year and has agreed to send another 6,000 military constructors to rebuild the southern Kursk region. It's not clear if any of these workers are being paid.)

MIGRATION TO BRITAIN: Russia is driving migration across the English Channel to Britain, the Sun newspaper quoted "security sources" as saying. The article said that Russia was supplying "fake documents and transport" to smuggling gangs. (COMMENT: Although the article was thin on detail, Russian support for migration to Britain fits a pattern. The Kremlin considers Russia to be at war with Europe – although an "asymmetric war", rather than a conventional one – and feels that migration is a weakness it can exploit. Russian mercenaries have been helping Africans in Lybia into boats to cross the Mediterranean Sea to Italy; the Kremlin has been flying in people from the Middle East, bussing them to Belarus and then forcing them into forests to cross by foot into Poland; and supplying others with bicycles to pedal into Finland in the north – so why wouldn't Russian agents be collaborating with people smugglers to organise trips to Britain?)

BANKING SECTOR CRISIS: Russia's banking sector is facing a "systematic crisis", Bloomberg News reported on Thursday by quoting Russian officials. These officials said that piles of bad corporate and retail debt linked to interest rates of 20% could undermine the sector within 12 months. (COMMENT: Russia's listing economy, sky-high interest rates and soaring inflation are major problems for the Kremlin. The Central Bank cut its core interest rate by 1 percentage point this month but businesses have said that more cuts are needed. Sources told Bloomberg that official stats don't show the extent of the debt crisis. Even senior officials said last week that a recession was likely.)

EURASIAN ECONOMIC UNION SUMMIT: Vladimir Putin is due in Minsk on Friday for a summit meeting of the Eurasian Economic Union. This is the Kremlin-headed group that has been vital for Russia's parallel imports strategy. (COMMENT: Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia are members of the Eurasian Economic Union, although Armenia is wavering. The group had struggled for purpose until Russia's invasion of Ukraine in 2022. Now, the parallel imports of Western products that the Eurasian Economic Union eases into Russia have become vital for the Russian economy and the "air of normality" that the Kremlin promotes.)

NEWS MATRIX:

Three important stories in today's Russia Morning Memo. Warnings of a hidden debt crisis in Russia are clearly very important, although they probably won't come as much of a surprise to regular Memo readers. More surprising is a prediction from a Russian construction sector official that thousands more workers from North Korea are heading into Russia. North Korean dictator Kim opening a waterpark for Russian tourists is interesting, but less important.