The Defense Industry Changed in the 1990s

The short-range surface-to-air missile Cheonma (K-SAM low-altitude surface-to-air missile), independently developed with domestic technology. The Agency for Defense Development and 13 defense companies began development in 1987 and successfully conducted a test launch in October 1997.

[Kim Min-wook, Editor-in-Chief of Monthly Defense and Technology] By the mid-1990s, the most critical issue in defense policy, especially regarding military structure, was the transition from a manpower-centric military to a technology-intensive force, that is, the modernization of military power. When the military structure is reformed into a technology-intensive one, the number of personnel decreases, reducing personnel maintenance costs; however, acquiring and maintaining advanced equipment inevitably leads to an increase in the defense budget, which requires a considerable period to realize. Additionally, increased investment in advanced technology development and the establishment of conditions for nurturing technical personnel are indispensable. However, increasing the defense budget in the post-Cold War era was a challenging task.

Although the Cold War ended with the collapse of the Soviet Union, the global trend shifted from quantitative force expansion to military modernization, thereby increasing the necessity for technological development in the defense industry. Nevertheless, compared to advanced countries, South Korea’s conditions for developing core technologies were still poor. This was because, due to policy changes in the 1980s, practical circumstances, and economic conditions, more emphasis was placed on early force deployment rather than long-term investment in core technologies.

At that time, scientific and technological bureaucrats within the Ministry of National Defense accounted for less than 10%, and the scale of research and development investment was about 3% of the defense budget, which was relatively insufficient compared to the 11-15% level of advanced countries. The ratio of basic and core technology research costs to system development research costs was about 1:4, indicating weak investment in core technologies. The basic research budget supporting universities was about 5 billion won, less than 2% of the total defense R&D budget, and research personnel were also insufficient. Even if the budget increased, there were clear limits, and under these circumstances, structural changes in the defense industry nurturing environment were necessary to effectively support research and development.

▲ Renaming from ‘Force Maintenance Project’ to ‘Defense Capability Improvement Project’= On December 10, 1996, the Ministry of National Defense drafted the “Defense Capability Improvement Project System Improvement Plan,” which was approved by the President and announced. This improvement plan aimed to boldly consolidate overlapping or unnecessary weapon acquisition procedures constrained by formal frameworks to shorten the force deployment period, apply transparency principles throughout the entire weapon acquisition process to ensure transparency in defense operations, unify overlapping functions and work systems among departments to strengthen accountability, and select and assign the best personnel within the military for long-term positions to enhance expertise in the defense capability improvement field.

The main improvements were as follows: First, the weapon system acquisition procedure was shortened from the previous nine steps to six steps to ensure timely force deployment. The responsibility for testing and evaluation, which had chronically caused project delays, was assigned solely to the Joint Chiefs of Staff (JCS), clearly defining responsibility boundaries among the military, JCS, and Ministry of National Defense. Second, to guarantee transparency and fairness, a public bidding system was introduced. The JCS was required to hold public briefings before deciding on equipment subject to testing and evaluation, and the principle of ‘competitive bidding’ was applied. Third, research and development were to be pursued with a long-term perspective aligned with government policies. Weapon systems to be developed domestically were to be decided policy-wise from long-term requirements, and development personnel, duration, and budget were to be made transparent to ensure achievement of development goals. Fourth, ten different document systems were boldly consolidated into five to save unnecessary effort and time, maintaining interconnectivity in the order of threat analysis ? response strategy ? resource allocation.

Fifth, to consolidate similar functions and clearly define responsibility boundaries, research and development and acquisition maintenance functions dispersed among the Logistics Bureau, Acquisition Development Bureau, and Information Systems Bureau were coordinated and reorganized to clearly distinguish work boundaries. Evaluation and analysis functions scattered across four departments, including project coordinators, were integrated to activate independent evaluation and analysis functions by establishing a Force Analysis and Evaluation Officer directly under the Minister and Vice Minister.

Sixth, to substantially support institutional improvements and maximize expertise through personnel renewal, about 140 personnel, approximately one-third of those responsible for defense capability improvement tasks, were replaced and reassigned starting in 1997. Along with this, to enable excellent professionals to work with conviction in the future, a dedicated specialty and qualification system for defense capability improvement was introduced, and professional positions were established to guarantee working conditions allowing experts in this field to advance to higher positions. The Ministry of National Defense was to enact personnel management regulations for defense professionals by early 1997 and establish a defense system management education course related to defense capability improvement at the Graduate School of Defense by the end of 1997 to nurture experts.

Seventh, to break away from the practice of relying on weapon brokers and build a weapon acquisition information system, the existing military logistics officer system was supplemented to greatly expand overseas weapon information collection functions. In 1997, a joint weapon information database was established to allow responsible personnel direct access, and from 1998, computerization of weapon acquisition tasks and early promotion of defense informatization projects such as CALS were to be implemented for practical application.

Eighth, to guide weapon brokers to operate within the institutional framework, qualification and registration standards were strengthened so that they could bear joint responsibility with foreign companies for contract fulfillment and post-management. Control measures were reinforced by canceling registrations of unqualified companies through regular and ad hoc security status inspections.

Ninth, to enable substantive open administration in the future, the classification criteria for secret documents related to the defense capability improvement project were relaxed and reset, and documents to be disclosed to companies through public bidding were to be converted into plain text.

Tenth, to revitalize research institutes under the Ministry of National Defense, bureaucratic organizations were to be completely reorganized into productivity-oriented project organizations starting in 1997. The Ministry’s coordination and control functions were strengthened to develop these institutes into the most suitable research centers for defense policy and task execution. These measures were positive reforms in terms of promoting efficiency in the defense industry but were also intended to eliminate the negative image ingrained in the public through scandals such as the Yulgok corruption case.

This content was produced with the assistance of AI translation services.