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Dagyum Ji is a senior NK News correspondent based in Seoul. She previously worked for Reuters TV.
The South Korean government announced on Thursday it will increase its Inter-Korean Cooperation Fund by 10.3 percent to more than $1 billion for 2020 to implement the “peace economy,” allocating $403 million to infrastructure construction.
The Ministry of Unification (MOU) presented the plan at a Cabinet meeting, asking for a total of KRW1.44 trillion ($1.18 billion) for next year’s budget.
The ministry requested more than KRW1.22 trillion ($1 billion) for the Inter-Korean Cooperation Fund while the rest was allocated for the general account budget.
The MOU said it compiled the budget with an “emphasis on realizing the ‘peace economy,’” where peace and the economy come together in a “virtuous cycle” to expand “internal and external consensus” on the Korean peace process.
While planning the budget for the Inter-Korean Cooperation Fund, the ministry said it put particular importance on “establishing a system of co-prosperity between the two Koreas and the future infrastructure of the Korean peninsula.”
The increased budget also aims to “expand and solidify peace that the public can experience in their daily lives.”
The budget allocation follows President Moon Jae-in’s August 15 pledge that South Korea “will open the door to a new Korean peninsula” by pouring everything into the peace economy.
Through his peace economy — the cornerstone of Moon’s North Korea policy aiming to boost inter-Korean economic cooperation — he urged the creation of “new economic growth engines.”
The inter-Korean Cooperation Fund budget for infrastructure construction also increased from KRW428.9 billion ($353 million) to KRW489 billion ($403 million).
“Economic infrastructure, including rail and road connections,” will support the South in becoming a country that “connects continents and oceans,” according to the MOU.
A total of KRW25 billion ($20.6 million) was also allotted to transform inter-Korean border areas, including the estuary of the Han River and the demilitarized zone (DMZ), into a peace zone.
This budget allocation increased from KRW12.6 billion ($10.4 million), up 98 percent from last year, with the goal of providing “substantive peace” that the public can “feel the effect of.”
NATIONAL AND INTERNATIONAL CONSENSUS
When drawing up the general account budget, the unification ministry also said it considered the importance of “securing national consent and the international community’s continuing consensus in the process of pushing forward the peace process on the Korean peninsula.”
To that end, the MOU formulated a new budget to promote a “new Korean peninsula regime” initiative, which was mentioned by President Moon in his symbolic speech marking the 100 year anniversary of Korea’s March 1 independence movement.
Moon’s ‘new Korean peninsula regime’ included a plan to establish a “new community of economic cooperation” between the two Koreas, ushering in an era of a peace-driven economy.
The ministry allotted KRW250 million ($206,000) to the project with the aim of “fleshing out the future vision of the Korean peninsula, including the ‘peace economy,’ by communicating with the public.”
The MOU also set another new budget to “invite budding overseas researchers to the country and support their research activities (one to two-year long-term study) in the field of North Korea and unification studies.”
This KRW790 million ($650,000) will be used in order to establish a “foundation of favorable support in the international community” and expand its relationship with overseas specialists.
Seoul believes that through the project it can “enhance a deeper understanding of the affairs of the Korean peninsula and contribute to the creation of favorable international circumstances on peace and unification.”
DEFENSE BUDGET MORE THAN KRW50 TRILLION
The South Korean Ministry of National Defense (MND) on the same day announced a defense budget of more than KRW50.15 trillion ($41.25 billion) for the next year. It rose by 7.4 percent from the previous year.
This is the first time that defense spending has gone over KRW50 trillion, the military said, emphasizing that it has been increased by approximately KRW10 trillion ($8.2 billion) within two and a half years of the inauguration of the Moon Jae-in government.
The defense ministry said it greatly increased its budget for the “force improvement program” to “build military power,” allocating around KRW16.69 trillion ($13.73 billion).
The rest of the defense budget, approximately KRW33.46 trillion ($27.52 billion), was allocated to “force maintenance.”
Spending in the force improvement program rose by 8.6 percent from to last year, the ROK MND said.
The average annual increase rate during the Moon Jae-in government is 11 percent, almost doubling the average growth of 5.3 percent during the Lee Myung-bak and Park Geun-hye administrations.
“Considering the recent uncertainty in the security environment, the government is intensively investing in strengthening its defense capabilities so that our military can proactively respond to the full spectrum of security threats,” the MND said in a press statement on Thursday.
To that end, the South Korean military concentrated on creating a budget that invested in “securing high-tech weapons systems.”
The ROK MND asked for a total of KRW 14.7 trillion ($12.1 billion) to acquire weapons systems for multiple purposes, including “responding to the nuclear and WMD threat,” and the “reinforcement of the South Korean military’s core military capabilities in relation to the transition of wartime operational control.”
The Moon Jae-in government will submit its budget proposal to the National Assembly in September, and it is expected to be finalized in December.
* USD$1= KRW1,215.2
Edited by James Fretwell
Featured image: NK News
The South Korean government announced on Thursday it will increase its Inter-Korean Cooperation Fund by 10.3 percent to more than $1 billion for 2020 to implement the “peace economy," allocating $403 million to infrastructure construction.
The Ministry of Unification (MOU) presented the plan at a Cabinet meeting, asking for a total of KRW1.44 trillion ($1.18 billion) for next year's budget.