South Korea's defense budget to top W70tr for first time, with biggest hike in 21 years

South Korea's defense budget is expected to surpass 70 trillion won ($50.3 billion) for the first time next year.

Political circles said Sunday the government has drawn up a defense budget of approximately 71.8 trillion won for next year, with final coordination among relevant ministries still under way. A Ministry of National Defense official said the government's proposal "is currently under discussion and has not yet been finalized."

The figure represents a 9.0 percent increase from this year's defense budget of 65.8 trillion won — the first time the annual hike has reached the 9 percent range since 2005, when it stood at 9.9 percent under the Roh Moo-hyun administration. That makes it a 21-year high. This year's defense budget, the first under the Lee Jae Myung administration, also rose 8.2 percent from the previous year, meaning the country will have posted back-to-back annual increases in the 8 to 9 percent range.

Defense spending is typically the sum of operational costs and defense capability improvement expenditures. The government plans to expand the capability improvement portion — which covers weapons procurement — by more than 13 percent, directly reflecting the administration's push for self-reliant defense.

Next year's budget proposal is set to include, for the first time, funding for a nuclear-powered submarine program dubbed "Project Jangbogo-N," in the tens of billions of won range, along with around 140 billion won earmarked for the transfer of wartime operational control. Funding for the initial mass production of the domestically developed KF-21 fighter jet is also expected to be included, as are significantly expanded budgets for a selective volunteer military system the government is pursuing and for improvements to service members' welfare.

Analysts say the Donald Trump administration's demands for greater alliance burden-sharing also contributed to the upward trend in defense spending.

At last year's South Korea-US summit, the government agreed at Washington's request to raise defense spending to 3.5 percent of GDP. The plan calls for annual increases in the 8 to 9 percent range throughout the Lee Jae Myung administration's term, reaching 3.5 percent of GDP by 2035. Adding the budgets of the Defense Acquisition Program Administration and the Military Manpower Administration to that of the Ministry of National Defense would push the total figure counted as "defense expenditure" even higher.

Meanwhile, the defense budget increase is part of a broader trend in which next year's overall government budget is being drawn up as a "super budget." The total outlay for next year is widely expected to reach the 820 trillion won range — an increase of more than 90 trillion won from this year — with total expenditure growth projected at around 12 percent, well above this year's 8.1 percent.