SEOUL: South Korea will sharply increase its 2011 defense budget in response to the North Korean artillery attack on Yeonpyeong Island and the sinking of the corvette Cheonan. The government had proposed a 5.8 percent increase in the 2011 defense budget, which would increase funding to $27 billion – far more than the 3.6 percent rise in the FY10 defense budget.
Following the attack on Yeonpyeong island, the South Korean Parliament could approve an even higher amount.
The extra funds will be used to purchase more self-propelled artillery and fighter-bombers. The added funding will also partially compensate for the loss in U.S. dollar purchasing power of the Korean defense budget following the decline in the value of the Korean won.
This decline is mostly due to the international financial crisis of 2008-09, but is also the result of increasing tension between North and South Korea.
