Defence spending will rise 5.8 percent from this year to 31.2 trillion won (27.1 billion dollars), which accounts for more than 10 percent of next year's total government budget of 309.6 trillion won, the finance ministry said.

The total 2011 budget was up 5.7 percent from this year and focuses on shoring up fiscal soundness and boosting welfare spending, it said.

The defence ministry said the increase in its budget for next year reflects the need to bolster military capability following the deadly warship sinking in March.

Military experts say the sinking revealed the vulnerability of South Korean forces against attacks by North Korean submarines and other unconventional weapons.

Next year, the defence ministry plans to spend 844.7 billion won to buy aircraft equipped with early warning systems or unmanned aerial vehicles.

Some 1.53 trillion won will be used to buy new fighter jets and cruise missiles, while the ministry plans to spend 1.77 trillion won on building an Aegis destroyer, submarines and torpedoes.

Regarding non-defence spending, vice finance minister Yoo Sung-Kull said a record 86.3 trillion won was earmarked for welfare, public health and labour sectors to help more people find work and expand free childcare services and educational support.

Despite a variety of state incentives to encourage people to have children, South Korea's birthrate hit a four-year low last year as more couples delayed marriage in the economic downturn.

Officials fear a shrinking workforce will hit growth and will be unable to foot the bill for a rapidly ageing population.

Despite the increased spending South Korea aims to log a fiscal surplus of five trillion won next year compared with this year's estimated fiscal deficit of two trillion won, the finance ministry said.

In 2009 South Korea reported a fiscal deficit of 17.6 trillion won due to a sharp increase in spending to shore up growth following the global financial meltdown, it said.

The ministry said the fast economic recovery would help improve fiscal soundness.

The International Monetary Fund this month upgraded its 2010 growth forecast for South Korea to 6.1 percent from 5.75 percent. The central Bank of Korea predicts 5.9 percent this year.

earlier related report
US spy chief to brief senators on Russia nuclear treaty
Washington (AFP) Sept 28, 2010 - US spy chief James Clapper will brief senators Wednesday on intelligence issues tied to a landmark nuclear treaty with Russia, amid worries about Moscow's compliance, a lawmaker said Tuesday.

Republicans have concerns about the agreement and "we'll raise those in the closed hearing" said Senator Kit Bond, the top Republican on the Senate Intelligence Committee.

Clapper, the US director of national intelligence, will head to the capitol in the early evening, one Senate aide said on condition of anonymity. Another confirmed that the briefing would occur without specifying a timeframe.

The US Senate is expected to vote on ratifying the new Strategic Arms Reduction Treaty (START) after November elections that are expected to deal a blow to President Barack Obama's Democratic allies in the congress.

The Senate Foreign Relations Committee endorsed the agreement in a 14-4 vote on September 16 even after one of the panel's Republican members, Senator James Risch, said the US intelligence community had shared "troubling" new information with lawmakers.

Lawmakers were tight-lipped about the details at the time, though Bond warned in a statement about "the treaty's lack of verification necessary to detect Russian cheating."

Asked whether there was anything new given longstanding allegations of Russian non-compliance, Risch told reporters after the committee vote: "You haven't seen the same stuff I've seen," but would not elaborate.

The treaty -- signed by Russian President Dmitry Medvedev and Obama at an elaborate ceremony in Prague in April -- restricts each nation to a maximum of 1,550 deployed warheads, a cut of about 30 percent from a limit set in 2002.

The agreement, a top Obama foreign policy initiative, replaces a previous accord that lapsed in December 2009 and also requires ratification by Russia's lower house, the Duma.

US Senate ratification requires 67 votes, Democrats control 59 seats, and just three Republicans on the foreign relations committee voted in favor of the accord, with four against.

Republicans have charged the accord could hamper US missile defense plans -- a charge denied by the Pentagon -- have concerns about Russian implementation, and want assurances about plans to modernize the existing US nuclear arsenal.

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