I guess it took a budget crisis to finally get the people in Congress to look at making sure cost sharing for US bases overseas is evenly shared:
WASHINGTON — The United States is footing more of the bill for overseas bases in Germany, Japan and South Korea even as the military reduces the number of American troops in Europe and strategically repositions forces in Asia, a congressional report says.
The exhaustive, yearlong investigation by the Senate Armed Services Committee focused on costs and burden-sharing as the United States spends more than $10 billion a year to back up the U.S. military presence overseas, with 70 percent of the amount expended in the three nations. The figure does not include military personnel costs.
The panel’s report, obtained by The Associated Press in advance of its Wednesday release, found the financial contributions by those host countries lagging behind costs or increases in U.S. spending. The report identified inherent problems and missteps in the compensation system as the U.S. returns a growing number of its upgraded facilities on foreign land to the host countries. [Stars & Stripes]
Here is what the report had to say about South Korea:
In South Korea, where there are 28,500 troops, the U.S. plans to move its forces from the Yongsan Garrison in Seoul to Camp Humphreys, about 40 miles south of the capital. The U.S. must provide most of the military family housing and cover the cost, estimated at $7 billion.
In return, South Korea gets prime real estate in downtown Seoul. During the transition, the U.S. will be responsible for maintaining both sites at a considerable cost. The project also calls for a $10 million museum at the newer base.
In January 2009, the two countries signed an agreement on South Korean contributions. The report found that “while the agreement increased South Korean contributions in subsequent years to keep up with inflation, South Korea’s contributions have not kept pace with U.S. costs.”
The United States’ non-personnel costs in South Korea were $1.1 billion last year. U.S. spending in the country was expected to exceed South Korea’s contributions by $330 million.
I criticized the USFK cost sharing agreement back then because of the good deal that the Koreans received. During the negotiations the Koreans agreed to increase their cost sharing from 41% to 43.5% when the US wanted them to split it 50/50.
However the 2.5% increase is deceptive because the Koreans agreed to pay the increase with goods instead of cash. For the Koreans providing goods is cheaper than cash because they can for example bulk buy Hyundai cars for USFK at a cheaper cost while claiming the car is worth full price. Not only do they save money this way, but also the money is going back into the Korean economy since they are buying Korean goods. It also important to remember that the remainder of the burden sharing for South Korea goes to pay Korean workers’ wages and upkeep facilities which is also money going back into the Korean economy.
Considering the favorable burden sharing deal and the money saved from not having to buy the latest military technology that the US military provides Korea, the ROK government has had significant cost savings for many years. Korea is no longer a poor country and should be able to fund a 50/50 split of USFK upkeep costs. With new President Park Geun-hye taking office the US has already begun negotiating for a 50/50 split and hopefully this time the US negotiators are able to get this equal split.