Seoul’s bill for hosting US troops to increase more than 5% this year

Posted on : 2014-01-13 11:58 KST Modified on : 2019-10-19 20:29 KST
South Korea’s expenditures going up despite the USFK holding an unused surplus of more than 1 trillion won
 Jan. 12. (by Lee Jeong-ah
Jan. 12. (by Lee Jeong-ah

By Kim Kyu-won, staff reporter

South Korea’s contribution to USFK defense costs was set at 920 billion won (US$867 million) for the next five years, a 5.8% increase from 2013.

The South Korean government failed to produce any major results with its original plan to push for an equal or lesser contribution and more systemic improvements during the ninth round of negotiations.

A Ministry of Foreign Affairs official outlined the results of the talks on Jan. 12.

“On Jan. 11, a ninth Special Measures Agreement [SMA] was reached for defense contributions,” the official said. “The total amount was 920 billion won by 2014 standards, applied for the five years through 2018.”

“As of 2015, the consumer price inflation index from two years before is to be applied to the contribution for the previous year, but [the rate of increase] is not to exceed 4%,” the official added.

The 920 billion won total represented a 5.8% increase from the 2013 contribution of 869.5 billion won (US$819.1 million) and a 25% increase from the 736 billion won (US$693.3 million) actually budgeted that year. The South Korean government reportedly proposed an initial figure of 900 billion won (US$848 million) before negotiating the 920 billion won as a compromise after the US government demanded 950 billion won (US$895 million).

Civic groups and the political opposition had been calling for cuts to the South Korean contribution, noting that the allotted amount has exceeded the actual budget every year, with a more than billion-dollar surplus piling up as military construction costs from the contribution have been channeled into USFK base relocations. The administration and ruling Saenuri Party (NFP) originally said they planned to ask for the contribution to be cut or remain at past levels, but failed to achieve that outcome in the talks.

The two sides agreed on a number of systemic improvements for the ninth agreement, including stronger prior coordination at the allotment stage, an ongoing framework for preliminary discussions in the area of military construction, a system for handling SMA complaints in the area of logistical support, increased welfare for South Korean workers and greater transparency in personnel costs, and improved transparency in the contribution budget and accounts process.

But many of the demands from civic groups and the political opposition were not met in the agreement, including bans on payment of the difference between the allotted budget and actual budget or the use of South Korean defense contributions for base relocation, as well as priority use of the past contribution surplus.

Also criticized was the adoption of another five-year agreement, after the one reached in 2009 under the Lee Myung-bak administration. Under the administrations of Roh Tae-woo (1988-93) and Roh Moo-hyun (2003-08), terms were set at two to three years. Critics said the longer term undercuts the National Assembly’s budget review capabilities and prevents improvements to costs and systems.

The Ministry of Foreign Affairs said it carried out “intensive negotiations” with the US government after “listening to and researching the opinions of the relevant government agencies and civic groups.”

But Yu Yeong-jae, head of the USFK issues team for the civic group Solidarity for Peace and Reunification of Korea, criticized the deal as leaving South Korea facing a heavier burden.

“They actually raised [South Korea’s] contribution, even through 1.3 trillion won (US$1.22 billion) in past contributions have gone unused,” Yu said. “South Korea has been left making up the shortfall from the US’s own defense budget after the Afghanistan and Iraq invasions and the federal budget sequester.”

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