South Korea Earmarks Almost $1 Billion for Joint Projects with North Korea

North Korean leader Kim Jong Un (L) and South Korean President Moon Jae-in (R) pose for photos in front of Bukhansan Peace House for the Inter-Korean Summit on April 27, 2018 in Panmunjom, South Korea. Kim and Moon meet at the border today for the third-ever Inter-Korean summit talks after …
Korea Summit Press Pool/Getty

South Korea’s Unification Ministry announced on Tuesday that it will spend 1.1 trillion won (about $993 million) on cross-border initiatives with North Korea next year, an increase of 14.3 percent over current spending.

The initiatives were largely established in the declaration issued by President Moon Jae-in and North Korean dictator Kim Jong-un after their April summit in the border city of Panmunjom.

Korean Joongang Daily reported some of the initiatives in the spending plan assume international sanctions against North Korea will be partly lifted next year, which could be an excessively optimistic assumption in the current diplomatic environment.

The cross-border cooperation plan calls for North Korea to spend more money on South Korean projects than it has in the past, although the amount spent by Pyongyang remains trivial compared to Seoul’s investment in North Korea:

The majority of the inter-Korean cooperation fund, 504.4 billion won, will be spent on modernizing North Korea’s rail and road infrastructure next year, 46.3 percent higher than the 344.6 billion won earmarked for similar projects this year. A large portion of that fund, 119.7 billion won, will go toward purchasing equipment. The amount is nearly 60 times what the South spent this year.

The ministry official said Seoul hopes the rail and road projects will prime the pump for reunification in the future. Moon has said that both countries’ infrastructure should be developed to achieve “balanced development and co-prosperity.”

South Korea’s budget includes over a 100 percent increase in money spent on family reunifications like the high-profile events held last week.

On the other hand, funding for a long-planned human rights foundation concerned with North Korea is sharply cut. The project was legislatively approved over a decade ago, ostensibly launched in earnest under the administration of President Moon’s impeached predecessor Park Geun-hye and seems to be drowning in partisan squabbles over who would manage the foundation.

The Seoul office of the human rights foundation was closed in June because the Unification Ministry felt it was a waste of money to continue making lease payments.

South Korea’s budget for 2019 also includes a substantial increase in defense spending, which Asia Times interpreted on Tuesday as an effort to please opposed constituencies in South Korea and placate the United States. The defense budget will see an 8.2 percent increase, the largest increase since 2008.

South Korea’s defense plan involves more money for hardware to improve the agility and efficiency of the armed forces, even as South Korea’s troop strength is dramatically decreased. By 2022, the South Korean military plans to cut 100,000 troops from a current strength of 618,000.

“That plan has been prompted by Korea’s demographic fall, but is also seen as a vote winner in a country where national conscription is deeply unpopular,” Asia Times observed.


Please let us know if you're having issues with commenting.