[2027 Budget Proposal] Unification Ministry Allocates KRW 1.2549 Trillion for Next Year... Inter-Korean Cooperation Fund Maintained Above KRW 1 Trillion

The Ministry of Unification’s 2027 budget and fund proposal has been set at a total of 1.2549 trillion won, with the Inter-Korean Cooperation Fund maintained at the 1 trillion won range. Meanwhile, the lending budget for economic cooperation infrastructure, in preparation for potential future improvements in inter-Korean relations, has been more than tripled. This appears to be aimed at maintaining the fundamental structure of the fund to prepare for a possible resumption of inter-Korean exchange and cooperation.

Signboard of the Ministry of Unification. Photo by Yonhap News

According to the Ministry of Unification on September 1, the 2027 budget and fund proposal was set at a total expenditure of 1.2549 trillion won. This marks an increase of 10.2 billion won (0.82%) compared to the 1.2447 trillion won in 2026. Breaking it down, the general account was set at 243.4 billion won, and the Inter-Korean Cooperation Fund at 1.0115 trillion won. The business expenses portion of the general account increased by 1.8 billion won from 172.9 billion won this year to 174.7 billion won next year.

The Inter-Korean Cooperation Fund increased by 9.2 billion won (0.91%) from 1.0023 trillion won this year. Of this, business expenses will be raised by 9.3 billion won from 1.0001 trillion won this year to 1.0094 trillion won next year. An official from the Ministry of Unification explained, "By allocating and maintaining business expenses at the trillion-won level, we are demonstrating the government's commitment to the resumption of exchange and cooperation."

In particular, the lending budget for economic cooperation infrastructure, in preparation for improved inter-Korean relations, will increase by 23.772 billion won (237.7%) from 59.051 billion won this year to 199.428 billion won next year. According to the Ministry, this budget had been maintained at around 200 billion won through 2022, but decreased to about 59 billion won this year; next year, it will be raised again to nearly 200 billion won. If inter-Korean economic cooperation projects agreed upon by both sides resume, the funds can be used for projects such as railways and roads.

On the other hand, the budgets for relief aid, livelihood cooperation support, and grant-based economic cooperation projects have each been reduced by 15%. Relief aid will decrease from 112.23 billion won to 95.395 billion won, livelihood cooperation support from 555.38 billion won to 472.111 billion won, and grant-based economic cooperation projects from 220.9505 billion won to 187.769 billion won. Regarding this, an official from the Ministry of Unification explained that the 15% cut was inevitable, as the Inter-Korean Cooperation Fund was flagged as underperforming due to low execution rates relative to the allocation during the fiscal business performance review. The official stated, "We had to uniformly cut 15%, so major projects were reduced by 15% accordingly."

The budget for operating the North Korean Human Rights Foundation has been greatly reduced. Next year’s budget is set at 50 million won, an 89.5% decrease from 475 million won this year. A Ministry official explained that while the budget for foundation operations started to be reflected from 2016, the foundation itself has not been established, so the related budget has been fully unused up to last year. Thus, only a symbolic 50 million won will be allocated for next year, and if the board is formed through a bipartisan agreement in the future, the necessary budget will be secured through reserve funds.

In the area of unification education, there will be a shift from a security-focused education system to one emphasizing peaceful coexistence, dialogue and cooperation, as well as democratic values. The related budget will increase from 15.9 billion won this year to 25.3 billion won next year. The number of Peaceful Unification Democratic Education Committee members, mainly teachers, will increase from the current 1,000 to 4,000, and is planned to reach 10,000 by the end of the year. Additionally, 7.15 billion won will be allotted to capability enhancement and activity support.

The restoration budget for the Gyeongwon Line, which is a key ongoing project, will decrease by 1.5 billion won from 28.038 billion won this year to 23.753 billion won next year, a 15% reduction. However, the Ministry stated that it is preparing to resume construction this year through a renewed environmental impact review and aims to complete the project by the end of 2029 after beginning the work next year.

There are also plans to encourage broader public participation in projects along the Demilitarized Zone (DMZ) border areas. The budget associated with connecting the DMZ "Peace Trail" to local festivals will increase to 330 million won, and the DMZ International Forum budget will rise to 400 million won. The new "Peaceful Unification Marathon" project will have a budget of 534 million won. The Inter-Korean Cooperation Fund will also newly allocate 428 million won for the new “DMZ Peace Bridge Train” project, with plans to operate it eight times a month starting next year.

Furthermore, as the Northeast Asia Peace Archive prepares for its opening next year, 15.6 billion won will be invested to build infrastructure and strengthen the foundation for public access to North Korean materials. The plan is to expand public access to information related to North Korea through public exhibitions and the development of educational guidelines for youth.

This content was produced with the assistance of AI translation services.