Proposed increase in defense funding may be halved: source

SEOUL, Aug. 27 (Yonhap) -- South Korea's defense ministry may get less than half
the increase in funding it had sought for next year, a source said Thursday,
despite its chief official's unconventional campaign to keep the initial plan
alive.

The government source, speaking on condition of anonymity, said the finance
ministry is considering increasing defense spending for 2010 by 3.5 percent, a
drop from the 7.9 percent that the Ministry of National Defense had proposed in
July.
Defense Minister Lee Sang-hee sent a personal letter to the presidential office
of Cheong Wa Dae early this week, protesting the possible cut. He warned the
scale-down would undermine troop morale and the armed strength of the country in
the eyes of its neighbors, especially North Korea.
"The defense ministry and the finance ministry are working on a plan to adjust
the hike from 7.9 percent to 3.5 percent," the source said, suggesting Cheong Wa
Dae has dismissed the protest.
In the letter he also sent to the finance ministry Monday, Lee described his
deputy -- a finance expert who bypassed him in proposing the cut to the
government -- as "the tail wagging the dog."
Chang Soo-man, widely considered a confidant of President Lee Myung-bak, was
appointed vice defense minister in January and has vowed to slim down the defense
budget.
Chang was absent from a key ministry meeting on Thursday afternoon that he had
been scheduled to attend, the source noted.
Citing the need to cope with North Korea's increasing nuclear and missile
threats, the defense ministry hoped to receive 30.8 trillion won (US$24 billion)
next year.
If approved, the figure would mark the first time that defense funding has
surpassed the 30-trillion-won mark since the foundation of the country, which
shares a Cold War frontier with North Korea.
A drop to a 3.5 increase would amount to a reduction of about 2 trillion won from
the initially proposed hike in funding for next year.
samkim@yna.co.kr
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