[Lee Administration’s First Budget] Foreign Ministry Slashes Budget by 16% to 3.6 Trillion Won... ODA Plummets Amid "Kim Keonhee Gate" Scandal

The Ministry of Foreign Affairs' budget for next year has been set at a total of 3.6028 trillion won. This represents a decrease of 15.8% (676 billion won) compared to this year's budget of 4.2788 trillion won. The sharp reduction is largely due to a drop of more than 20% in the Official Development Assistance (ODA) budget, which accounts for a significant portion of the ministry's total budget, following allegations related to the so-called "Kim Keonhee Gate." In particular, the budget for humanitarian aid to developing countries has been cut by half.

Government Seoul Government Complex, Ministry of Foreign Affairs Annex. Photo by Yonhap News

On the 29th, the Ministry of Foreign Affairs announced that it would submit the 2026 budget proposal containing these details to the National Assembly on September 2. An official from the ministry explained, "To strengthen the foundation of pragmatic diplomacy, we have expanded investment in key projects and adjusted the ODA budget to improve its quality." Earlier that day, the government held a temporary Cabinet meeting presided over by President Lee Jaemyung and approved the "2026 budget proposal."

More than half of the ministry's total budget is allocated to ODA projects, but next year's ODA budget is set at 2.1852 trillion won, a decrease of 22.2% (624.1 billion won) from this year's 2.8093 trillion won. The contribution to the Korea International Cooperation Agency (KOICA) has been set at 1.148 trillion won, down 11.4%. The humanitarian aid budget, which was 670.2 billion won this year, will be only 325.5 billion won next year, representing a cut of more than half (51.4%). This is the first time since the reorganization of the Ministry of Foreign Affairs and Trade into the Ministry of Foreign Affairs in 2013 that the ODA budget has been reduced.

The drastic reduction in the ODA budget is attributed to the so-called "Kim Keonhee-Geonjin Monk Gate." There are allegations that a former high-ranking official of the Unification Church, through Geonjin Monk Jeon Seongbae, delivered expensive luxury bags and valuables to First Lady Kim, requesting expanded ODA support for countries such as Cambodia and those in Africa. In fact, under the Yoon Sukyeol administration, ODA spending in these regions increased sharply. These allegations are currently under investigation by the so-called "Kim Keonhee Special Prosecutor's Team (Special Prosecutor Min Jungki)."

However, Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol stated, "We have normalized the rapidly increased ODA budget by reviewing its outcomes." Yoo Byeongseo, Director of the Budget Office at the Ministry of Economy and Finance, also explained, "ODA increased by about 40% at once in 2024, so this adjustment brings it back to the previous general growth trend," and added, "The Prime Minister's Office, together with the Ministry of Foreign Affairs and the Ministry of Economy and Finance, conducted a comprehensive review and reduced funding for projects that were not being implemented or were insufficiently prepared." He continued, "The United States is also reducing its ODA by 15-20%, and Germany and other European countries are generally cutting ODA by 10-20% due to increased defense spending. In terms of international contributions, we are following a similar trend, not reducing alone while others are increasing."

Next year's contributions to international organizations have also been set at 681.8 billion won, a 17.5% decrease from this year. The budget for contributions to international organization projects has been cut nearly in half to 207.2 billion won. However, part of the reduction (73.6 billion won) is due to the separate allocation of the budget for international organization trust fund contributions starting next year. In addition, the budget for contributions to the United Nations regular budget has been set at 114.1 billion won, down 7.7%, and the budget for United Nations Peacekeeping Operations (PKO) contributions has been set at 177.7 billion won, down 18%.

Meanwhile, the budget for the North American Affairs Bureau of the Ministry of Foreign Affairs, aimed at "strengthening the South Korea-U.S. alliance," has increased from 5.1 billion won this year to 7.5 billion won. Through this, the ministry plans to strengthen high-level and working-level consultations and expand exchanges with the U.S. Congress, state governments, and academia.