According to the latest Institute for Far Eastern Studies (IFES) “North Korea Brief,” the South Korean government has achieved a new low in levels of spending and investment in North Korea this year as a consequence of the extreme behavior of the leaders in Pyongyang.

Released on June 4th, the “North Korea Brief” references figures released by the Ministry of Unification that relate to the first third of 2009. According to the statistics, the 2009 South Korean government budget for inter-Korean cooperative projects is 1.508 trillion Won, roughly 1.2 billion dollars, but just 1.8% (26.919 billion won) of that had been spent by the end of April, a figure which is unlikely to have risen much since then.

During the period in question, North Korea conducted a nuclear test, launched a large number of missiles and arrested two American citizens and one South Korean, causing a deep freeze in relations with the rest of the World and a significant knock-on effect in terms of aid and trade.

According to IFES, the funding includes earmarks for: “the construction of an East Sea line inter-Korean import facility and joint-use yard (8.795 billion Won); capital loans for Hyundai Asan economic cooperative projects (5.739 billion Won); NGO aid to the North, including nutritional supplements for children and soybean oil from the Catholic Seoul Archdiocese (2.933 billion Won); loans to cover expenses of the Kaesong Industrial Complex (KIC) Management Committee (2.08 billion Won); and the construction of a KIC General Support Center (2.444 billion Won).”

In addition, the 800 billion won set aside for humanitarian assistance remains untouched. This is because, under an agreement between the two Koreas, North Korea has to request rice and fertilizer aid. This year, due to a mixture of dire inter-Korean relations and a relatively good harvest, no such requests have been forthcoming.

By comparison, in 2007 more than 700 billion won was spent.