Overall Budget Reduced by 50.3 Billion KRW Following Government-wide Sound Fiscal Policy
Cooperation Fund for Livelihood Support Increased by 112.823 Billion KRW
[Asia Economy Reporter Ki-min Lee] The Ministry of Unification has drafted next year's budget at 1.452 trillion won, which is 50.3 billion won less than this year's 1.5023 trillion won. This appears to reflect the government-wide sound fiscal policy emphasized by President Yoon Seok-yeol. However, the budget for humanitarian support and livelihood cooperation has significantly increased.
According to the Ministry of Unification on the 30th, the ministry's "2023 budget proposal," which passed the Cabinet meeting that day, was composed of 218.7 billion won in the general account and 1.2334 trillion won in the Inter-Korean Cooperation Fund. Based on project expenses, the general account is 156 billion won, and the Inter-Korean Cooperation Fund is 1.231 trillion won.
The size of the Inter-Korean Cooperation Fund was set at 1.231 trillion won, considering proposals for North Korea such as the Bold Initiative, and 2.35 billion won was allocated for fund operation expenses. Although the project expenses of the Inter-Korean Cooperation Fund decreased by a total of 38 billion won, the budget for livelihood cooperation increased in consideration of the Bold Initiative.
By sector within the Cooperation Fund, the budget for humanitarian issues such as livelihood cooperation accounts for 60.9%, increasing by 15.1% to 751 billion won compared to this year's budget of 652.2 billion won.
Among these, the budget for health and medical cooperation was significantly increased from 95.459 billion won this year to 144.244 billion won, and large-scale support for food, fertilizer, and modernization of North Korean infrastructure was also substantially allocated. The Ministry of Unification explained, "A budget was allocated to support 100,000 tons of rice and 140,000 tons of fertilizer."
Additionally, in relation to COVID-19, new items were included in the livelihood cooperation sector for the "healthcare platform" and the establishment of an infectious disease prevention and management system.
However, the budget for inter-Korean economic cooperation projects was set at 454.89 billion won, down 23.1% from this year, and the budget for inter-Korean social and cultural exchange projects also decreased by 2.6% compared to this year. This appears to reflect the completion stage of the Kaesong Industrial Complex enterprise support project and the current tense inter-Korean relations.
The general account project expenses decreased by about 11.4 billion won from 167.4 billion won this year. The Ministry of Unification explained that this was due to a reduction in the budget for North Korean defector settlement support following a decrease in defectors and a cut in the budget for big data and artificial intelligence (AI) construction projects that have been completed.
The budget for North Korean defector settlement support is the largest at 87.2 billion won (56%). Other allocations include 16.7 billion won for unification education, 16.2 billion won for situation analysis, 14.3 billion won for unification policy, 5.1 billion won for inter-Korean economic cooperation, and 4.7 billion won for humanitarian issues such as separated families and North Korean human rights.
The basic settlement allowance related to improving support for defectors was raised by 1 million won to 9 million won. Three hundred million won was allocated to improve the treatment of regional adaptation center workers, and 700 million won was set for improving the integrated support system for defector crisis households. Six hundred million won was allocated for the job success package support project of the Defector Support Foundation.
Also, the budget for holding social dialogues increased from 1 billion won to 1.2 billion won. Budgets were newly allocated for appointing goodwill ambassadors for peace and unification on the Korean Peninsula and for selecting and nurturing the public diplomacy cooperation group for peace and unification on the Korean Peninsula.
The budget for constructing the Unification Information Data Center reflected in this year's budget is about 10.6 billion won, and the budget for building a digital archive of unification and North Korea-related materials increased from 100 million won to 700 million won.
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