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Last Updated: Friday, 29 August, 2003, 10:01 GMT 11:01 UK
S Korea boosts defence budget
South Korean soldiers watch their northern counterparts across the border
South Korea is planning to up its defence spending by 8% next year, almost four times the general increase in spending.

The boost would take the defence budget to 18.9 trillion won ($16bn; 10.1bn), the fourth biggest in Asia after Japan, China and India, at a time when aggressive noises from North Korea are growing.

Six-way talks between the two Koreas and the US, China, Japan and Russia are under way over North Korea's impending nuclear arsenal.

But the talks broke up on Thursday night without progress, and Seoul remains concerned that the dire state of Pyongyang's tattered economy might persuade it to move from sabre-rattling to actual military action.

North Korea was once richer than its southern neighbour, before the South's accelerated growth through heavy industrial and technological investment.

Stagnation north of the border and the collapse of the Soviet Union, as well as sharply reduced help from China, mean Pyongyang controls an economy estimated to be 16 times smaller than that of South Korea, with many of its people dependent on aid to avoid starvation.

The rigid control of information in the North also poses a threat, some observers believe, since opening up the economy on the Chinese model would reveal just how far behind the rest of the world North Koreans had slipped.


The new estimate for defence spending comes in a draft budget unveiled by the Budget Ministry on Friday.

It sets overall expenditure at 117.5 trillion won ($99.7m;63m)), up 2.1% on the projections for 2003.

Tax revenues are supposed to provide 111.5 trillion won.

A central bank profit of 2.5 trillion won will fill part of the gap, and the rest should come from government commission fees, the Budget Ministry said.

The new money for the military is, in fact, rather less than at first predicted.

The Defence Ministry said earlier this year they wanted defence spending to swell by as much as a quarter.

The expansion comes as the US, which has 35,000 front-line troops and many more support staff in South Korea, is planning to reorganise its presence in the Demilitarised Zone (DMZ) which has separated North and South Korea since a truce ended the 1950-53 Korean War.

The Pentagon is planning to spend as much as $11bn over the next four years on the restructuring.

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