The Ministry of Foreign Affairs said on the 1st that it has drawn up a budget of 3.0733 trillion won for next year, up 88.1 billion won, or 2.4%, from this year’s 3.6152 trillion won.
The most notable change is a more than fourfold increase in cybersecurity spending to 15.5 billion won from 3.8 billion won this year, following a hacking incident at the Korea National Diplomatic Academy. Spending on information protection and the building and operation of diplomatic information systems will also more than double to 26.2 billion won from 11.6 billion won this year. The hacking of the academy, which operates under the ministry, appears to have driven the increases.
“We will more securely protect core information assets and information systems in the diplomacy and security field, and build a stable foundation for carrying out diplomatic work,” the ministry said.
Official development assistance under the ministry’s jurisdiction, however, will fall by 21.9 billion won, or 1.0%, to 2.1642 trillion won next year from 2.1861 trillion won this year. The cut follows a reduction of more than 600 billion won this year from a year earlier. It is the first time the ministry’s ODA budget has declined for two consecutive years.
Government-wide ODA spending will also drop by 111.0 billion won, or 2.1%, to 5.2438 trillion won next year from 5.3548 trillion won this year, according to the Ministry of Planning and Budget. While reducing the overall size of ODA, the government plans to concentrate investment on “strategic ODA” tied to national interests, including areas where Korea has strengths such as artificial intelligence, culture and technology, as well as follow-up measures from summit diplomacy and efforts to secure supply chains. A ministry official said the budget reflects a push to improve the quality and substance of ODA, including the consolidation of some KOICA projects and the restructuring of underperforming programs.
The Ministry of Unification set its budget for next year at 1.2549 trillion won, roughly flat from a year earlier. While it cut humanitarian aid for North Korea, which has become difficult to disburse amid the severing of inter-Korean ties, it expanded loans for economic cooperation to about 200 billion won in preparation for a resumption of joint projects.
The Unification Ministry released its 2027 budget plan the same day. The total of 1.2549 trillion won combines 1.0115 trillion won for the Inter-Korean Cooperation Fund, which is set aside for exchanges and cooperation with North Korea, and 243.4 billion won in general accounts for regular policy and administrative programs. That is an increase of 10.2 billion won, or 0.82%, from a year earlier. The cooperation fund, which accounts for most of the budget, rose slightly, by 0.91%.
Relief aid at 95.395 billion won, livelihood cooperation support at 472.111 billion won and grant-based economic cooperation infrastructure at 187.769 billion won together made up 74.8% of the fund, but all three items were cut by 15.0% across the board.
The reductions came after the Ministry of Planning and Budget, which oversees the government’s budget planning, rated the Inter-Korean Cooperation Fund as an “underperforming program” because of its low execution rate.
The Unification Ministry did, however, raise the economic cooperation infrastructure loan item by 237.7% to 199.428 billion won, reflecting its intent to improve inter-Korean relations. The money is set aside so that funds can be lent if economic cooperation projects agreed on by the two Koreas, such as railways and roads, resume. The ministry is considering a Korea-China high-speed rail project that would link Seoul, North Korea and Beijing.
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