[2024 Budget] Inter-Korean Economic Cooperation Halved... North Korean Human Rights Projects 'Uncertain'

Unification Ministry's Next Year's Budget Proposal Cuts Inter-Korean Economic Cooperation by 40%
Humanitarian Aid Shrinks Amid Prolonged Stalemate
Budget Focuses on North Korean Human Rights... Exhibition Hall and Concert?

Starting next year, the budget for inter-Korean economic cooperation will be reduced by more than 40%. This not only shrinks humanitarian aid that should be carried out independently of military confrontation but also raises concerns that it could send the wrong signal that "cooperation can be overturned depending on the administration." Meanwhile, newly allocated budgets focused on the 'North Korean human rights' sector are criticized for being superficial projects with little effectiveness.

On the 29th, the Ministry of Unification announced that the total budget proposal for next year is 1.1087 trillion won. This is a decrease of 327.1 billion won (22.7%) compared to this year's main budget of 1.4358 trillion won. The detailed composition includes 234.5 billion won from the general account and 874.2 billion won from the Inter-Korean Cooperation Fund, with most of the cuts concentrated in the Inter-Korean Cooperation Fund. The fund decreased from 1.2125 trillion won this year to 874.2 billion won next year, a reduction of 338.3 billion won (27.9%).

In October 2022, from the Dora Observatory in the western front of the Demilitarized Zone (DMZ) in Paju-si, Gyeonggi Province, the inter-Korean Joint Liaison Office, which was blown up by North Korea in the Kaesong Industrial Complex area, and the Kaesong Industrial Complex Support Center, damaged by the shock of the explosion, are left abandoned. [Image source=Yonhap News]

The biggest change is in the budget for the 'Kaesong Industrial Complex and other inter-Korean economic cooperation' sector, which was cut by more than 40%. It dropped from 454.9 billion won this year to 262.2 billion won next year, a reduction of about 192.5 billion won (42.3%). A Ministry of Unification official explained, "This measure was taken considering North Korea's attitude and the inter-Korean relationship situation," but added, "The reduction in the humanitarian sector was minimized." However, looking at the detailed projects, 129.6 billion won was cut from the 'Livelihood Cooperation Support' sector and 10.7 billion won from the 'Relief Support' sector.

Given that North Korea has cut off dialogue and continues provocations, this is a realistically unavoidable measure, but it ultimately appears to shrink humanitarian aid as well. Moreover, North Korea has been detected operating South Korean companies' facilities in the Kaesong Industrial Complex without permission, and companies that participated in inter-Korean economic cooperation projects, including Kaesong, have repeatedly gone bankrupt. Companies that trusted government guarantees and ventured into economic cooperation now face even more remote prospects of recovering their losses.

Throughout successive governments, inter-Korean economic cooperation has effectively proceeded as 'supportive projects.' For example, the South Korean government conducted fertilizer and food transactions through low-interest loans as compensation for family reunions. Considering the Yoon Suk-yeol administration's hardline stance toward North Korea, this budget cut policy implies a stern warning to North Korea that "provocations will not yield benefits," but it also faces criticism for potentially sending the wrong signal that economic cooperation can be overturned depending on the administration.

"Improving North Korean Human Rights in an Exhibition Hall?"...Questioning Effectiveness

A scene from a play in which North Korean defector youths share their experiences as flower boys.
[Image source=Yonhap News]

Most of the new projects or budget increases for next year are concentrated in the 'North Korean human rights' sector, but there are criticisms that most are superficial. Budgets for urgent matters such as investigating the status of abductees, detainees, and Korean War POWs and holding North Korea accountable were not reflected.

The Ministry of Unification plans to build a kind of experiential exhibition hall called the 'National North Korean Human Rights Center (tentative name).' They newly allocated 10.3 billion won for the project and aim to open it in early 2026 by finding a suitable site in Seoul. The plan focuses on North Korean human rights experiences, exhibitions, and related content production, but there are concerns that it may overlap in content with the privately promoted 'North Korean Human Rights Museum.'

Additionally, about 1.6 billion won was newly allocated for 'enhancing unification awareness and understanding of North Korea,' and about 4 billion won for 'promoting North Korean human rights activities and public discourse.' Plans include ▲talk concerts ▲short content ▲contests to raise awareness of North Korea's realities, but their effectiveness is questioned.

Regarding the abductee issue, the budget for victim protection and support was slightly increased, and 10 million won was newly allocated for establishing a 'Korea-Japan channel on the abductee issue.' This appears to be linked to the agreement reached during then-Minister of Unification Kwon Young-se's visit to Japan in March this year, where the Ministry of Unification and the Japanese Cabinet agreed to form a consultative body to resolve the abductee issue. However, no concrete progress such as working-level consultations has been made.

Furthermore, the Ministry of Unification allocated 1 billion won for 'international dialogue' inviting domestic and foreign prominent figures to discuss the realities of North Korean human rights, and increased the publication cost of the 'North Korean Human Rights Report,' first released this year, from 44 million won to 214 million won. The intention is not merely to publish the report but to actively use it in international seminar presentations and lead international discourse on North Korean human rights issues.

Among other general budget items, the largest allocation is for supporting North Korean defectors. This is due to the decision to increase the basic settlement fund from the current 9 million won to 10 million won per person starting next year. However, the overall budget size decreased from 20.9 billion won this year to 17.7 billion won, which is interpreted as reflecting the sharp decline in the number of defectors entering South Korea after North Korea closed its borders following the COVID-19 pandemic.