South Korea’s Foreign Ministry and its Unification Ministry on Tuesday announced budget hikes of 3.6 percent and 2.5 percent, respectively, for next year.

The Foreign Ministry said it is requesting 2.84 trillion won ($2.4 billion) for next year, an increase of 3.6 percent from 2.74 trillion won this year, with a focus on reinforcing virtual diplomacy amid the COVID-19 pandemic and bolstering cooperation with the US and China, as the rivalry between the two superpowers is expected to intensify.

As the outbreak of the novel coronavirus made in-person diplomacy difficult, the ministry plans to strengthen its digital infrastructure, allocating 10 billion won for the digitalization of accounting and work support systems for 180 overseas diplomatic missions and 6.7 billion won for the establishment of a digitized platform for public diplomacy.

It also allocated 5.6 billion won to bolster strategic cooperative partnerships with countries in North America, an increase of 1.1 billion won from this year, while it plans to spend 3.1 billion won, up 400 million won from this year, to pursue diplomacy with China and other countries in Northeast Asia.

The ministry seeks to more than double its budget for strengthening cooperation with the Association of Southeast Asian Nations, from 1.8 billion won this year to 3.7 billion won next year, a move aligned with President Moon Jae-in’s New Southern Policy.

The ministry said it is expanding funds set aside for foreign aid by 4.9 percent to 963 billion won, as it hopes to assist countries vulnerable to COVID-19 and other infectious diseases. It allocated 538 billion won, up 6.2 percent on-year, for international organizations.

The Unification Ministry, in charge of inter-Korean affairs, said it proposed setting next year’s budget at 1.46 trillion won -- up 2.5 percent from this year’s 1.42 trillion won, despite a stalemate in cross-border projects amid escalated tensions.

A total of 1.24 trillion won has been earmarked for the Inter-Korean Cooperation Fund next year, up 3.1 percent from this year’s 1.21 trillion won. The fund, established in 1991 to facilitate humanitarian and economic exchanges between the two Koreas, takes up the bulk of the ministry’s budget; the rest, 217.4 billion won, is the proposed amount in its general budget for next year, a drop of 0.5 percent from this year’s 218.6 billion won.

The increase reflects the ministry’s plans to boost cooperation on health care, including cooperation on COVID-19 and other infectious diseases, as well as natural disasters.

In specific, the ministry proposed a hike from 58.5 billion won to 95.5 billion won in medical cooperation, including responses to COVID-19, an increase from 600 million won to 6.5 billion won in a project to prevent flooding in shared waters between the two Koreas and an increase from 304.5 billion won to 329.5 billion won in agriculture, forestry and environmental cooperation.

Breaking down the funds set aside for inter-Korean cooperation, the ministry has allocated 653 billion won, or 52.6 percent, for humanitarian cooperation with the North, followed by 562.7 billion won, or 45.3 percent, for inter-Korean economic exchanges. About 2.1 billion won, or 1.7 percent, was set aside for exchanges in the social and cultural sectors.

The budget was endorsed by the Cabinet this morning, and also requires approval by the National Assembly.

By Ahn Sung-mi (sahn@heraldcorp.com)