29 April 2008: Korea Times
When it comes to money, friendships are often put aside and ego comes into play. Such is the case in the half-century alliance between South Korea and the United States, which was forged in blood and shared sacrifice on the battlefield during the 1950-53 Korean War.
South Korean taxpayers have paid hundreds of millions of dollars per year since 1991 as part of shared "security costs" to help maintain U.S. troops serving here as a strong deterrent against North Korea, which is pursuing missile and nuclear programs.
The United States has thanked South Korea for the contribution and provided a robust commitment to its security in return.
On the other side, the two governments have differed over how to share joint defense costs in an appropriate manner, engaging in tugs-of-war during their biennial burden sharing talks, called the Special Measures Agreement (SMA) meetings.
The Seoul government contributed 741.5 billion won ($787 million) under the 2006 SMA, in which South Korea agreed to pay 725.5 billion won, up 45.1 billion won from 2006, to the United States in 2007 and increase its level in 2008 in accordance with a rise in the consumer price index.
The USFK argues the figure represents 41 percent of non-personnel stationing costs (NPCS) covering the salaries of Korean employees at U.S. bases, Korean contractors and service agents, as well as military construction, logistics procurements and maintenance and munitions storage.
The United States has called on South Korea to pay more to reach the 50-50 level in tune with the country's growing economy and increased responsibility for national defense.
"Defense burden sharing is advantageous to both partners. For the United States, the Republic of Korea's willingness to equitably share appropriate defense costs is a clear indicator that the United States Forces in Korea are welcome and wanted," USFK Commander Gen. B. B. Bell said in a statement presented to the House Armed Service Committee on March 12.
Seoul officials, however, do not agree with the USFK's claim on Seoul's proportion of burden sharing.
"The figure (41 percent) is the assessment of the USFK," an official of the Ministry of Foreign Affairs and Trade told The Korea Times on condition of anonymity. "We can't calculate the proportion exactly because the USFK refuses to reveal total costs for stationing its troops here."
The official said the difference over the proportion of host-nation funds between the two governments resulted from different ways of assessing the values of host-nation support programs.
He said, for instance, South Korea provides about 2,700 reinforcement troops called KATUSAs (Korean Augmentation Troops to the U.S. Army) to the USFK for free as part of host-nation support programs.
The value of the KATUSA program would be at least $50 million a year on the assumption that a KATUSA soldier is paid some $1,500 per month, but the USFK seems to downplay the value, he said.
Besides the troop support, South Korea provides land for bases and firing ranges for free, unlike Japan and other nations where U.S. troops are stationed. U.S. forces in Korea are also exempted from taxation and benefit from reduced electricity and telephone charges.
Several diplomatic sources said that nevertheless, the Lee Myung-bak government is expected to accept the U.S. request to increase its burden-sharing as part of efforts to "restore" bilateral relations and build stronger joint defense mechanisms against threats posed by North Korea's nuclear and missile programs.
"If that is required to maintain stronger security on the peninsula, there is no reason for us to pay more," a senior diplomat said, asking not to be named. "The issue is how both sides share the principles of the calculation and use of funds in a transparent and fair manner."
A U.S. move to use part of the host nation's sharing funds in relocating its infantry units to the south of Seoul is expected to stir up controversy.
Gen. B. B. Bell reaffirmed the plan, which has not yet materialized due to severe opposition from progressive South Korean lawmakers and civic groups under the liberal Roh Moo-hyun administration.
Opponents claim that if the United States uses the burden-sharing funds, it means South Korean taxpayers virtually foot most of the $10 billion bill for the relocation project, initiated by needs from both sides.
"Since 2004, the position of the United States government has been that the United States will use both U.S. congressionally-appropriated funds and host nation burden-sharing funds under the ROK-U.S. Special Measures Agreement to fund the LPP, which includes relocating the 2nd Infantry Division," Bell said in a news release last month. "If the Republic of Korea disagrees with this, it will be necessary for the Korean government to raise the issue with the United States at the next U.S. Department of State and Republic of Korea Ministry of Foreign Affairs and Trade SMA negotiations."
Under the Land Partnership Plan (LPP) reached in 2002, the United States promised to pay for moving the bases of the 2nd Infantry Division, north of Seoul, to Pyeongtaek, Gyeonggi Province, where a consolidated U.S. military base will be built.
On the other hand, Seoul agreed to bear the cost for relocating the Yongsan Garrison in Seoul under the Yongsan Relocation Plan (YRP) finalized in 2004.
Under a master plan drawn up by the two governments last year, Seoul agreed to spend about $5.2 billion on the program to move U.S. bases to Camp Humphreys, which will be tripled in size to accommodate more than 44,000 U.S. service members, their families, base workers and KATUSAs.
The base relocation had originally been planned for completion by 2008 under both pacts, but the timeline was delayed to 2012 due to protests by some farmers in the Pyeongtaek area and other technical problems in constructing and modernizing facilities at Camp Humphreys.
Officials from the Ministry of National Defense and the Foreign Ministry said if the United States pushes for using the funds in the base relocation, there is no way to stop it legally.
"Under the LPP, the USFK is authorized to use funds from South Korea to construct or modernize its base facilities," said an official of the defense ministry's U.S. base relocation team. "The previous Roh government was reluctant to accept the move, however, citing opposition from civic groups and public sentiment against the plan."
The pause in the reduction of U.S. forces in Korea agreed between the leaders of the two nations during a summit earlier this month is expected to affect upcoming SMA negotiations for the next two years' cost sharing, government officials and defense experts say.
During the Camp David summit earlier this month, Presidents Lee Myung-bak and George W. Bush struck a deal to halt the reduction of U.S. troops at 28,500 to help bolster security on the peninsula and further strengthen the alliance.
Under a 2004 troop draw-down deal, Seoul and Washington had agreed to pull military equipment out of the peninsula, as well as reduce the number of U.S. forces from 37,000 to 25,000 in phases. The USFK now has slots for 28,500 troops, while about 27,600 are currently stationed here.
The United States was supposed to withdraw 3,000 soldiers from South Korea by the end of this year, along with high-tech weapons systems including some 20 F-16 fighters and a brigade of Apache helicopters used to prevent North Korean special forces from infiltrating the South.
Withholding the pullout of troops and high-tech weaponry is likely to lead to a larger burden-sharing to maintain them.
In addition, the plan to extend the length of tours by U.S. troops to three years and have their families accompany them is also likely to financially burden Korean taxpayers.
Currently, most U.S. troops here are required to serve one-year tours without their families. Only 10 percent of USFK members are said to be with their families now. In Europe and Japan, about 75 percent of U.S. troops are accompanied by their immediate family members.
Gen. Bell, who concurrently serves as chief of the Korea-U.S. Combined Forces Command and the United Nations Command, recommended to the U.S. government and Congress that family-accompanied tours be implemented in South Korea over a 10-year period.
Bell said the program is expected to bring about 17,000 more family members to South Korea, which he described as no longer a "combat zone."
The general said he expected South Koreans to share costs of additional construction of base facilities including schools and hospitals in the family-accompanied tour program, hinting that the U.S. would raise the issue in cost-sharing talks.
"And so in addition to some fiscal costs that would accrue, I believe our ally, South Korea, will help defer some of these costs in a significant way over a 10-year period," he testified before the hearing.
Defense Minister Lee Sang-hee and his U.S. counterpart, Robert Gates, are expected to focus on resolving the money issue during talks scheduled for later next month, defense ministry officials said. The two defense chiefs are scheduled to hold talks on the sidelines of an annual security forum in Singapore, known as the Shangri-La Dialogue, to be held from May 30 to June 1, they said.
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