The Republic of Korea (ROK) maintains the sixth largest military force and continues to be a key strategic defense ally of the United States in maintaining peace and stability in north-east Asia. South Korea’s continued move towards defense modernization and the eventual takeover of operations control (OPSCON transfer), the ROK continues to allocate large portions of its budget to defense spending. The ROK Ministry of National Defense (MND) requested 28.9923 trillion Won to the Ministry of Strategy and Finance for the CY 2009 budget. The request represents an 8.8 percent annual increase in the defense budget vis-à-vis 2008, which is slightly lower than the 9 percent increase that was originally sought for implementation “Defense Reform 2020.” The MND is hopeful that the requested budget will be sufficient to focus on several key defense areas especially improving conditions for military personnel and supporting the force improvement program.
Budget for Defense Projects
South Korea’s CY 2008-2009 defense budget line items of interest include projects like the K-9 thunder self propelled howitzer, K-10 Ammunition Resupply Vehicle (ARV), Korean Main Battle Tank, the Korean Amphibious Assault Vehicle, the Weapon Locating Radar and FA-50 Golden Eagle development program.
Current Defense Projects
Korea has attracted the attention of all major players in the global defense/aerospace industry through defense and aerospace projects such as Korean Main Battle Tank, KDX III King Sejong the Great Class Aegis Destroyer, medium altitude long endurance (MALE) UAV and T-50/A-50 Golden Eagle.
Total Defense Market
DAPA procurement in 2008 was USD 11.5 billion, with USD 6.2 billion worth of procurement was made through FMS or commercial military sales (DCS). U.S. defense firms are integral to Korean defense, with U.S. business holding a commanding 49.8 percent market share.
U.S. firms have enjoyed a dominant position in the Korean defense sector. However, MND has begun considering diversification of foreign equipment and services. Major European companies, especially German, French and British firms, are increasing their presence in the Korean market. In addition, Israeli companies are becoming more prominent in competition for Korean defense projects. Diversification of suppliers is a major part of MND’s acquisition strategy, which serves as leverage to reduce overall costs. Korea continues to demand technical cooperation and technology transfer, so that the Korean defense industry is not relegated to simply being a sub-contract supplier of low-technology parts.
The principal point of contact for major defense projects are the service branches (ROKAF, ROKA, ROKN) and DAPA (Defense Acquisition Program Administration). These branches of the military procure all necessary equipment and systems through DAPA. For projects requiring local co-production or co-development, foreign firms very often participate in a consortia with leading local firms such as KAI, Hyundai Heavy Industries (HHI), and Samsung etc.
- Military aerospace (fighters, multi-role airlift aircraft)
- Missile technology
- Maritime defense electronics and systems
Airborne Mine-sweeping Counter Measures (AMCM) est. $500 million The Korean Navy plans to procure eight MH-60 class mine warfare helicopters by 2011. Next Generation Frigates (FFX) The Korean Navy (ROKN) plans to deploy a total of nine 2,500 ton class frigates by 2018. The delivery of one ship per year will begin from 2010-2018.