[Yang Nak-gyu's Defence Club] Only Sister-in-law's 'Defense Industry Government Agencies' Increased

Minister of National Defense Seo Wook is delivering opening remarks at the 'Defense Industry CEO Meeting' held on the 18th at KINTEX in Goyang, Gyeonggi Province. Photo by Kang Jin-hyung, Goyang aymsdream@

[Asia Economy Yang Nak-gyu, Military Specialist Reporter] Since the current administration took office, defense-related government agencies have been established one after another, causing distress among defense companies. Although the defense industry is in a stagnation period, there are criticisms that only agencies created in a 'spoon-feeding' or 'seat-making' manner are increasing.

On the 22nd, an industry insider said, "When defense-related government agencies announce defense achievements, they only intervene for agency promotion," adding, "Instead of increasing overlapping related agencies and wasting taxes, agencies should be consolidated and uniformly supported."

The Moon Jae-in administration set a goal in 2019 to achieve $10 billion in defense exports by the end of its term (2022). This was to industrialize defense exports, strengthen competitiveness, and create jobs. However, the export ratio compared to domestic defense industry production value is still struggling in a stagnation period.

According to the Korea Institute for Industrial Economics and Trade and others, defense orders, which were about 4.2 trillion won in 2014, sharply dropped by 30.9% to 2.9 trillion won in 2016 and have since been 'standing still' at around 3 trillion won. As orders decreased, export amounts also fell by 27.6%, from 2.9 trillion won in 2016 to 2.1 trillion won in 2018.

The Defense Technology Quality Institute (hereafter DTQI) launched the Defense Industry Technology Promotion Research Institute (hereafter Research Institute) this year, assigning it the exclusive tasks of fostering small and venture companies and supporting exports. At the time, the industry raised concerns that linking DTQI, which performs quality assurance of military supplies, with defense exports might be unreasonable. Later, there were worries that the head of the Research Institute would be a parachute appointment related to key figures in the current administration. Other defense-related government agencies include the Defense Industry Technology Support Center within the Agency for Defense Development and the Defense Material Trade Support Center within KOTRA.

Revolving-door personnel appointments in defense-related positions continue under the current administration. Former Military Manpower Administration Commissioner Kim Young-hoo was appointed vice chairman of the Defense Industry Association after finishing his term. Also, former Defense Industry Association Vice Chairman Mo Jong-hwa was appointed Military Manpower Administration Commissioner after finishing his vice chairman term. Industry insiders criticized these appointments as lacking professionalism.

Defense companies complain that they have a harder time with defense industry exhibitions promoted by each military branch's association. Despite opposition from defense companies last year, the DXK Organizing Committee pushed forward with 'DX Korea 2020' (Defense Expo Korea 2020, hereafter DX Korea), resulting in a large number of COVID-19 positive military officers. The exhibition, which was pushed forward under the banner of K-quarantine, ultimately became a COVID-19 hotspot.

A government official said, "There is criticism within the ruling party that they cannot utilize diverse networks," adding, "It cannot be denied that the competition to catch the 'last train' for appointments ahead of the presidential election is intensifying."

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