South Korea has decided to defer the purchase of US-made ship-to-air missiles worth 70 billion Won (US$57.5 million) as part of a 300 billion Won ($244.96 million) defence budget cut this year to meet the economic cost of the COVID-19 pandemic.
“The planned cut is to fund a third extra budget of 35.3 trillion won by readjusting this year's annual budget and issuing state bonds to cushion the economic fallout from COVID-19,” Yonhap news reported quoting government sources.
"The US government had initially planned to sign a contract this month to sell the missiles to South Korea under the foreign military sales (FMS) program, but it has now been deferred and we are to return the funds for this project to the state," an official of the government’s arms procurement agency was quoted as saying by Yonhap.
Some 315.8 billion won is expected to be reduced, 153.6 billion won from arms procurement expenses and 162.2 billion won from troop operations.
Other major programs to be deferred due to the budget cuts are the construction of twenty 230 ton-class patrol boats and the construction of a facility for tactical ground-based guided weapons.
The defence budget cut to be effective after parliamentary approval, comes after a 1.47 trillion-won reduction in this year's defense budget in April to fund the second supplementary budget. Taken together, the reduction will constitute about 3.6 percent of this year's defense budget of 50.15 trillion won.