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December 24, 2008
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| Korea said yesterday that it has struck a deal with the United States on how much it will contribute to the stationing of American troops here over the next five years. Under the agreement, reached after five rounds of talks since July, Korea will increase its share each year in accordance with the consumer price index, the foreign ministry said. “But the annual rate hike will be capped at 4 percent,” it said in a press release. Seoul provided the U.S. with 725.5 billion won ($542.65 million) in cash last year and is expected to pay the same amount this year with an adjustment for inflation under the Special Measures Agreement. When the deal was reached in late 2006, one dollar was worth about 950 won. The exchange rate now hovers at around 1,300 won against the greenback. Given the domestic inflation rate of 2.5 percent in 2007, Korea will have to pay about 760 billion won next year, far below Washington’s initial demand for a 14.5 percent hike for Korea. They added that Korea has instead agreed to allow the U.S. to use the SMA funds to relocate the U.S. Second Infantry Division to a consolidated base in Pyeongtaek, 70 kilometers south of Seoul, which would drastically increase Korea’s financial contributions. Yonhap |
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