South Korea has announced sharp increases in its budgets for defense and inter-Korean relations, underscoring President Lee Jae-myung’s focus on boosting Seoul’s self-sufficiency in deterring North Korean threats while pushing for renewed engagement with Pyongyang.

The new plan, approved at a Cabinet meeting on Friday, paves the way for the current government to reverse course on former President Yoon Suk-yeol’s policies, which framed North Korea as South Korea’s “main enemy” and left little room for engagement.