Seoul plans sharp cuts to overseas aid in 2026 budget

The Foreign Ministry proposed a steep cut of over 22 percent to foreign aid in next year's budget, while allocating more funds to develop the South Korea–US alliance into a “future-oriented comprehensive strategic alliance.”

The ministry’s proposed total budget, disclosed Friday, will drop to around 3.6 trillion won ($2.6 billion) in 2026 — down 15.8 percent from 4.28 trillion won in 2025.

The decrease is unprecedented, following a steady rise in the ministry’s overall budget since 2014, when it took its current name after relinquishing its role in trade affairs.

The budget for official development assistance, or ODA, has been set aside at 2.19 trillion won in 2026, a 22.2 percent drop from 2.81 trillion won in 2025.

The ministry said in a press statement that the change aims to "improve the quality" of ODA.

The Foreign Ministry’s contribution to the Korea International Cooperation Agency has been set at about 1.15 trillion won in the 2026 budget plan, a decrease of 147.5 billion won, or 11.4 percent, from 2025.

Within the ODA budget, humanitarian assistance has faced the steepest cut — down 51.4 percent in 2026 to 325.5 billion won, a reduction of 344.7 billion won from 670.2 billion won in 2025.

The ministry noted that the ODA budget has risen sharply in recent years, making it necessary to adjust spending.

In the 2022 budget, ODA allocations reached 1.11 trillion won, a 16.7 percent rise from 2021, marking the first time they surpassed the 1 trillion won threshold. The ministry’s ODA budget for 2023 increased by another 18.5 percent to 2.01 trillion won.

In the 2024 fiscal plan, ODA recorded a significant 39.2 percent jump to 2.79 trillion won, contributing greatly to the Foreign Ministry’s overall budget growth. In 2025, the ODA budget — the largest component of the ministry’s spending — was set at 2.8093 trillion won, a modest 0.6 percent increase from the previous year.

During a Cabinet meeting, President Lee Jae Myung ordered a thorough review of ODA projects to see if they serve the goal of boosting national prestige and supporting diplomatic aims.

Lee’s directive followed an investigation by a special prosecution team into claims that former first lady Kim Keon Hee sought to influence ODA projects in Cambodia at the request of the Unification Church, which was pushing for its land development project along the Mekong River.

However, more resources have been allocated for diplomacy vis-a-vis the Trump administration.

The Foreign Ministry has set aside 7.5 billion won in the 2026 budget to further strengthen the South Korea–US alliance, up from 5.1 billion won in 2025.

The budget aims to “enhance high-level and working-level discussions with the US to develop the alliance into a strategic partnership, as well as expand interactions with opinion leaders including members of the US Congress, state governments and academia,” according to the ministry.

Additionally, the budget “aims to deepen cooperation in the security field between Korea and the US while ensuring the stable management of the Status of Forces Agreement,” which defines the legal status of US Forces Korea.

Funding for monitoring US economic trends will rise to 1.4 billion won in 2026, up from 1 billion won in 2025.

The budget aims to track legislative developments in the US Congress and policy shifts under the Trump administration that could impact corporate activities and, therefore, support South Korean businesses through quick responses to institutional changes.

The Foreign Ministry has set aside new funds to broaden South Korea’s diplomatic reach.

Approximately 6.8 billion won has been designated for the country’s first summit with the leaders of five Central Asian countries, which will be held in South Korea in 2026.

Funding for exchanges and collaboration with Middle Eastern and African countries will nearly double to 6.7 billion won in 2026 from 3.5 billion won in 2025.

The ministry noted that this rise is linked to plans for a meeting of African foreign ministers, as a follow-up to the inaugural Korea–Africa summit held in June 2024.