South Korea’s unification ministry will downsize two subsidiaries and cut related budgets, as strained ties with North Korea limit the scope for inter-Korean engagement, a ministry official said Wednesday.

The ministry has instructed the Kaesong Industrial District Support Foundation and the South-North Exchange and Cooperation Support Association (SONOSA) to draft proposals to enhance their operations in line with planned government budget cuts for next year.

“Last month, the unification ministry directed its subsidiaries to prepare an improvement plan. We are currently discussing the details,” a ministry official told reporters on Wednesday, speaking on condition of anonymity.

The official