The government and ruling party have decided to set aside a similar portion of the budget for aid to North Korea and inter-Korean economic cooperation as this year, despite North Korea’s nuclear test in October.

In a meeting on Tuesday, the government and Uri Party reduced the Inter-Korean Cooperation Fund by a mere 3.5 percent from W1.22 trillion (US$1=W937) this year to W1.18 trillion next year. The government will pay W650 billion into the fund next year, the same amount it bore this year, reaffirming it will largely continue its engagement with Pyongyang.

As part of the Unification Ministry’s budget, the Inter-Korean Cooperation Fund finances humanitarian aid and personnel and economic cooperation projects with the North.

In humanitarian aid, the government plans to send 500,000 tons of food and 350,000 tons of fertilizer to the North next year, the same as this year. It hugely increased financial support for the joint-Korean industrial complex in the North Korean city of Kaesong, more than doubling support to W212.5 billion -- W132.8 billion for building infrastructure in the industrial park and W18.2 billion for building dorms for North Koreans working there.

Next year's budget related to Mt. Kumgang is of similar size to this year's. The government plan includes money for a reunion center for separated families there, a project North Korea has suspended. Additionally, some W80 billion is to be appropriated for helping North Korea reinvigorate its light industry, and some W15 billion was set aside for a feasibility study for a power supply project to North Korea that would cost several trillion won predicated on the North giving up its nuclear program.

In reality, not all the appropriated budget is likely to be spent on inter-Korean projects. This year some W480 billion was set aside for rice and fertilizer aid and support of North Korea’s light industry, but most of it was frozen after Pyongyang’s missile and nuclear tests. A government official said, “We don’t exactly know how much money will be spent on aid to North Korea and inter-Korean economic cooperation next year amid the North Korean nuclear crisis. But we need to secure a budget in advance on the premise that the inter-Korean relationship improves next year.”

(englishnews@chosun.com )