To Achieve a Revolution in K-Defense Industry

[Asia Economy Yang Nak-gyu, Military Specialist Reporter] There are many calls for the Korean defense industry, which had been stagnant for a while, to create an opportunity to write another leap-forward success story beyond a mere "flash growth." It is emphasized that multifaceted efforts are needed so that the defense industry can break away from the narrow domestic market and transform into an export-driven key industry.

Within the defense industry, there are calls to boldly abolish unreasonable defense-related regulations such as excessive liquidated damages (penalties for delivery delays) and to establish government-wide defense support efforts with the Blue House as the "control tower." In particular, there is a strong voice that unnecessary domestic defense exhibitions should be eliminated. It is argued that exhibitions led separately by the military, institutions, and local governments should be consolidated.

The Korea Defense Industry Exhibition was held two years ago despite the spread of COVID-19, organized by DXK Co., Ltd. At that time, DXK stated that it would take responsibility if soldiers mobilized for the event contracted COVID-19, but it was just words. During the event, a misfire accident of the guided missile "Hyeongung" occurred in front of foreign guests, but DXK only stated, "The shooting training on that day is unrelated to us." From this year, DXK plans to organize the event under a different name, but the structure where a specific individual profits remains unchanged. An industry insider complained, "At the Korea Defense Industry Exhibition (DX Korea), the seating at the ministerial meeting arranged by the organizers is sometimes determined according to the amount of sponsorship money."

On the contrary, there are complaints that the military is relegating defense companies to a cold shoulder. Recently, the Army held a proclamation ceremony for the 'Army TIGER (Army TIGER) Demonstration Brigade Combat Unit' and invited defense company representatives due to the naming ceremony of new weapon systems produced by defense companies. The company representatives rushed there immediately after attending the Korean Military Science and Technology Society (KIMST) comprehensive academic conference hosted by the Agency for Defense Development in Jeju Island the day before. However, Army Chief of Staff Park Jeong-hwan did not even greet or glance at the defense company representatives. Although they produced the weapon systems, they were not even asked for their opinions on the naming. This is why there are sorrowful complaints among defense companies.

The self-promotion of heads of defense-related agencies is also problematic. Former Director A of the Defense Acquisition Program Administration (DAPA) received a VIP van from a related company during a visit to Europe. However, upon seeing the van, Director A scolded the local military attach? harshly, saying, "Are you treating me like luggage?" That director abolished the military attach? system immediately upon returning to Korea. Subsequently, the defense attach? system, which was supposed to acquire defense export information, disappeared.

Policy support is also necessary. Countries that have signed Mutual Defense Procurement Agreements (MDPAs) with the United States include 27 nations such as Australia, Japan, and Latvia. However, South Korea has not concluded such an agreement. The Defense Procurement Agreement is a memorandum of understanding signed by the U.S. Department of Defense with allied and friendly countries; signatories are exempt from the U.S. Buy American Act, avoiding price disadvantages due to taxes when exporting products to the U.S. military, effectively a Korea-U.S. defense FTA (Free Trade Agreement). Domestic defense companies are participating in the U.S. next-generation armored vehicle project (OMFV), worth $50 billion, and the U.S. Navy and Air Force advanced tactical trainer project, worth $15 to $30 billion, so there are calls for an agreement in the near future.

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