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Seoul proposes 30 pct increase in budget for inter-Korean economic cooperation

All Headlines 10:00 October 06, 2009

SEOUL, Oct. 6 (Yonhap) -- South Korea's government proposed a 30 percent increase in its budget spending aimed at supporting inter-Korean economic cooperation projects for next year, the finance ministry said Tuesday.

According to the Ministry of Strategy and Finance, the budget set aside for inter-Korean economic cooperation next year will amount to 398.2 billion won (US$339.6 million), compared with 304.6 billion won assigned for this year.

The proposed increase seems to be based on expectations that relations with the North could improve next year, which would prompt brisker cross-border business activities, experts say.

Of the proposed budget, 81.7 billion won will be used to build accommodation facilities, roads and other infrastructure for the joint industrial complex in the border town of Kaesong, where more than 100 South Korean firms operate with about 40,000 North Korean workers, the ministry said.

Aside from the budget increase for economic cooperation, the ministry set aside 616 billion won for humanitarian aid including food and fertilizer for next year.

On Sept. 28, the government proposed a 2.5 percent increase in its 2010 budget, which will amount to 291.8 trillion won, compared with 284.5 trillion won set aside for 2009. The budget proposal must be endorsed by parliament.

The ministry, meanwhile, expects inter-Korean trade to amount to $1.7 billion next year, up 13 percent from this year's estimated $1.5 billion. Still, the projected amount is slightly lower than a record high of $1.8 billion posted in 2008.


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