S. Korea to increase government spending on welfare and defense in 2019

By Lim Chang-won Posted : August 28, 2018, 16:21 Updated : August 28, 2018, 16:21

[Yonhap Photo]


SEOUL -- South Korea earmarked a bigger amount of money on welfare, military buildup and cross-border exchanges in next year's budget that increased by the largest annual margin in a decade.

At a cabinet meeting chaired by President Moon Jae-in, South Korea's national budget for 2019 was set at 470.5 trillion won ($423.8 billion), up 9.7 percent from this year's. It marked the biggest gain since 2009 when government spending jumped 10.6 percent.

The lion's share, or 34.5 percent of total spending, went to social welfare and health with 162.2 trillion won, up 12.1 percent from this year, reflecting Moon's initiative to enhance public welfare and economic justice. Education will receive 70.9 trillion won, up 10.5 percent on-year.

A cut was made in spending on public works with 18.5 trillion won set aside, compared to 19 trillion won allocated for this year.

Bigger government expenditures were based on a 7.6 percent increase in total revenue, estimated at 481.3 trillion won for 2019, that included 299.3 trillion won in taxes. Finance officials say the fiscal deficit will stand at 1.8 percent of next year's gross domestic product (GDP), compared with 1.6 percent for 2018.

Military expenditures in 2019 will increase 8.2 percent on-year to 46.7 trillion won that included 15.3 trillion won on boosting defense capabilities and 31.3 trillion won for running military forces.

A security map on the Korean peninsula faces a dramatic change if North Korea achieves complete denuclearization and suspends its missile development, but South Korea will go ahead with the planned deployment of strategic assets, including a three-tier missile shield, to counter North Korean missiles which were perceived as realistic and existing threats despite an inter-Korean thaw.

At an inter-Korean summit in April, the two Koreas agreed to work on ending the status of war, stop all hostile acts against each other and replace a fragile armistice signed at the end of the 1950-53 Korean War with a lasting peace regime.

The defense ministry has demanded the buildup of strategic assets such as upgraded warships, submarines and surveillance equipment and the development of cutting-edge defense technologies, such as robotics and drones.

Military spending included 12.2 billion won to increase the number of personnel for the excavation of war remains in the demilitarized zone, which separated the Korean peninsula, and 3.3 billion won for removing DMZ landmines.

A state fund for inter-Korean cooperation will be expanded 14.3 percent on-year to 1.1 trillion won in 2019 to cover the modernization of North Korea's outworn transport facilities, afforestation and the reconnection of cross-border roads and railways. Some 504 billion won was earmarked for the modernization of North Korean roads and railways, a scheme that requires progress on denuclearization.


 
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