For K-Defense Industry to Mature to the Next Level

[Asia Economy Yang Nak-gyu, Military Specialist Reporter] ‘K-Defense Industry’ is the trend. South Korea’s defense exports have increased the most among the top 10 countries over the past five years (2017?2021). According to the Export-Import Bank of Korea, exports reached $7 billion (about 9.2 trillion KRW), a 176.8% increase compared to the previous five years, ranking 8th in the world. This year, due to the Ukraine war, exports to Europe have further increased, making it possible to achieve 5th place globally.

This is a remarkable achievement. In the 1970s, K-Defense Industry was insignificant. In fact, it was pitiful. At that time, when the U.S. tried to withdraw troops from South Korea under the Nixon Doctrine (reducing U.S. military roles in Asia), President Park Chung-hee proposed, "Let’s build weapons ourselves to achieve self-reliant defense." This initiative was called the Lightning Project. The name came from the idea of “roasting beans in a lightning flash,” meaning it was done quickly. To avoid U.S. scrutiny, parts were made at the Daejeon Machine Depot, and performance tests were conducted at a disguised weather station. Even private companies were involved, leading to the creation of the current Changwon Industrial Complex. The results came quickly. In 1975, $470,000 worth of rifle ammunition was sold to the U.S., the Philippines, and Indonesia. This was the first defense export.

K-Defense Industry faced trials with every change of administration. Former President Lee Myung-bak formed a task force (TF) to investigate defense corruption, citing kickbacks in weapons procurement. However, the TF’s activities were sluggish and quietly ended. Former President Park Geun-hye also launched a government joint investigation team on defense project corruption, prosecuting 74 people, but most suspects, including former Joint Chiefs of Staff Chairman Choi Yoon-hee, were acquitted.

Former President Moon Jae-in also targeted the so-called ‘Four Major Rivers Project, resource diplomacy, and defense corruption’ during his presidential campaign. The investigation focused on Korea Aerospace Industries (KAI). The person who directly led the investigation was then Seoul Central District Prosecutor General Yoon Seok-youl, now President. The prosecution applied 11 charges, including accounting fraud, against former CEO Ha Sung-yong, detained him, and sought a 12-year prison sentence. However, the investigation fizzled out, most charges were acquitted, and a suspended sentence was handed down.

Recently, the evaluation of KAI has changed. Last year, when the Korean next-generation fighter KF-21 prototype was unveiled, former President Moon praised it as "a new era of self-reliant defense." President Yoon, who handled the investigation of KAI, said on the 19th, when the KF-21 succeeded in its first flight, "It is a great achievement toward self-reliant defense."

It’s not just the president. Military-related institutions are also eager to claim credit for the KF-21’s success. When weapons exports are secured, they promote themselves as having led the process from development to export. The same goes for defense exhibitions. The disorganized military and various institutions each claim to be the original and the best.

However, there is no ‘control tower’ for defense support even in the Blue House. Because of this, South Korea has yet to conclude a Mutual Defense Procurement Agreement with the U.S. Signing this agreement would exempt Korean exports to the U.S. from the Buy American Act, avoiding price disadvantages due to taxes and other costs. With upcoming U.S. projects such as the next-generation armored vehicle project (OMFV) worth $50 billion and the U.S. Air Force and Navy advanced tactical trainer project worth $15?30 billion, defense companies are anxious.

To mature the K-Defense Industry to the next level, we must recall 2014. Government officials need to carefully consider why Samsung Group decided to withdraw from the defense industry, selling Samsung Techwin (now Hanwha Aerospace) and Samsung Thales (now Hanwha Systems).

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