SEOUL-- The unification ministry said Thursday it requested a 1.9 percent hike in its budget for cooperative projects with North Korea next year despite stalled cross-border relations.

About 1.27 trillion won (US$1.1 billion) was requested for next year's budget for the Inter-Korean Cooperation Fund, up 23.8 billion won from this year's spending plan, according to the ministry.

The increase stemmed in part from a rise in planned spending for the "peaceful use" of the Demilitarized Zone (DMZ), the heavily fortified inter-Korean border area, the ministry said.

The ministry requested 24.6 billion won for the project, up 34 percent from this year's budget, which includes projects to build a peace park, hiking routes and a museum along the DMZ separating the two.

The government of President Moon Jae-in hopes to turn the DMZ into an international peace zone.

To provide loans and insurance for inter-Korean economic exchanges, the ministry also proposed setting aside 25 billion won and 10 million won, respectively, compared with 14.8 billion won and 4.3 billion won for this year.

A ministry official told reporters that the budget for such loans and insurance had been on the decline recently amid chilled relations with the North but the proposed increase is intended to bring the amount back to the 2018 level in a way to brace for a possible change in situations on the Korean Peninsula.

Of the total budget for the fund, 652.2 billion won, or 51.1 percent, was assigned for humanitarian cooperation, followed by 589.3 billion won for economic projects and 22.1 billion won for social and cultural exchanges, respectively, the ministry said.

The request for the increase came despite long-stalled inter-Korean relations. North Korea remains unresponsive to Seoul's calls for dialogue and offers for cooperation, especially in humanitarian areas, such as joint anti-pandemic efforts.

The ministry's spending plan is part of the government proposal for the 2022 budget, which will be submitted to the National Assembly for approval Friday.

Source: Yonhap News Agency