South Korea seeks big increase in military spending
South Korea on Tuesday proposed a big increase in military spending next year, citing the need to strengthen security and buy new weapons after the sinking of a warship in an attack blamed on North Korea.
Defence spending will rise 5.8 percent from this year to 31.2 trillion won (27.1 billion dollars), which accounts for more than 10 percent of next year's total government budget of 309.6 trillion won, the finance ministry said.
The total 2011 budget was up 5.7 percent from this year and focuses on shoring up fiscal soundness and boosting welfare spending, it said.
The defence ministry said the increase in its budget for next year reflects the need to bolster military capability following the deadly warship sinking in March.
Military experts say the sinking revealed the vulnerability of South Korean forces against attacks by North Korean submarines and other unconventional weapons.
Next year, the defence ministry plans to spend 844.7 billion won to buy aircraft equipped with early warning systems or unmanned aerial vehicles.
Some 1.53 trillion won will be used to buy new fighter jets and cruise missiles, while the ministry plans to spend 1.77 trillion won on building an Aegis destroyer, submarines and torpedoes.
Regarding non-defence spending, vice finance minister Yoo Sung-Kull said a record 86.3 trillion won was earmarked for welfare, public health and labour sectors to help more people find work and expand free childcare services and educational support.
Despite a variety of state incentives to encourage people to have children, South Korea's birthrate hit a four-year low last year as more couples delayed marriage in the economic downturn.
Officials fear a shrinking workforce will hit growth and will be unable to foot the bill for a rapidly ageing population.
Despite the increased spending South Korea aims to log a fiscal surplus of five trillion won next year compared with this year's estimated fiscal deficit of two trillion won, the finance ministry said.
In 2009 South Korea reported a fiscal deficit of 17.6 trillion won due to a sharp increase in spending to shore up growth following the global financial meltdown, it said.
The ministry said the fast economic recovery would help improve fiscal soundness.
The International Monetary Fund this month upgraded its 2010 growth forecast for South Korea to 6.1 percent from 5.75 percent. The central Bank of Korea predicts 5.9 percent this year.
S.Korea seeks big increase in military spending - Channel NewsAsia