ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
N Korea at crossroads

South Korean opposition threatens president's peace budget

Moon Jae-in challenged to show that he is not violating international sanctions

SEOUL -- South Korea's main opposition party has demanded that the government submit detailed plans for the $1 billion allocated in next year's budget for inter-Korean projects. The tactic is meant to force the Moon Jae-in administration to be transparent about whether it intends to skirt international sanctions on North Korea.

The conservative Liberty Korea Party said that without those details, it would have to cut 500 billion won ($447.1 million) from the Inter-Korean Cooperation Fund's 2019 budget allocation of 1.1 trillion won. The allocation is up 14.3 % from this year. The rate of increase is higher than that for the 2019 national budget of 470.5 trillion won, which is up 9.7% from 2018.

The LKP controls 112 seats of the 299-member parliament, which means that it falls short of the majority it needs to block the budget bill. But the governing Democratic Party of Korea, with 129 seats, needs opposition support.

The finance ministry says money from the fund will be spent to connect railways between the two Koreas as well as to support cultural exchanges and family reunions.

It has refused to give specific details.

The debate around the Inter-Korean Cooperation Fund comes with Seoul and Washington at odds over economic sanctions against North Korea. Moon wants to ease the sanctions, but the administration of U.S. President Donald Trump refuses to give any slack until North Korean leader Kim Jong Un takes concrete steps toward denuclearization.

"The Moon Jae-in government wants to pour huge amounts of money into the North even though there have been no improvements in the denuclearization process," LKP spokesman Yoon Young-seok said. "We will cut the budget drastically not to waste taxpayers' money."

The fund has put the government in a dilemma. To get the allocation approved by the National Assembly, Moon's administration must unveil how and where it intends to spend it. These details, however, could be tantamount to an announcement that South Korea intends to push aside the U.S.-led sanctions.

Analysts say Seoul is working to find loopholes in the sanctions, imposed by the U.N. Failing that, it wants to come up with an interpretation of the sanctions that would allow a range of cooperation and exchanges with Pyongyang. At the very least, Moon wants to set the stage for the cooperation and exchanges.

"Advancing work on specific projects referenced in the Pyongyang Joint Declaration -- such as re-establishing North-South road/rail connections and reopening as soon as feasible the Kaesong industrial complex and Mount Kumgang tourist area -- remains a priority for Moon's government," said Scott Seaman, a director at the Eurasia Group. "And [Seoul] will likely seek to leverage the [U.S.-South Korea] working group to increase pressure on the U.S. not to block such interactions."

LKP Floor Leader Kim Sung-tae said the government needs to take its foot off the gas pedal while driving its engagement with Pyongyang until Kim steps onto a clear path to denuclearization.

The three-term lawmaker said the main opposition party instead wants to fight the country's low birthrate by increasing child-care and pregnancy subsidies.

The balance of the Inter-Korean Cooperation Fund reached 1.6 trillion won in September, down 17.9% from December, according to the Unification Ministry. The government dipped into the fund for 4.1 billion won for the Pyeongchang Winter Olympics, in February, when North Korea sent athletes and a delegation across the border.

Experts say the government needs to keep a cool head when dealing with North Korea, particularly over the nuclear issue, and be wary of deception.

"The Moon government seems to be very confident that North Korea will give up its nuclear arms," said Cheon Seong-whun, a visiting research fellow at the Asan Institute for Policy Studies. "However, policies based on this confidence are very weak, even dangerous, because Kim Jong Un could make them vanish with one statement -- that his country intends to keep its nuclear weapons."

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more