Tokyo 14.2 billion euros: That is the estimated amount for which Poland ordered war equipment from South Korea at the end of July. 980 K2 Black Panther tanks, 648 K9 howitzers and 48 light FA-50 fighter jets were ordered – by far the largest arms export in the history of the South Korean defense industry. The reason for the bulk purchase is the Ukraine war. Poland supplies large amounts of military equipment to Ukraine.
“Due to Poland’s support for Ukraine, it was necessary to close the gap in ground and air forces,” said Polish Defense Minister Mariusz Blaszczak at the signing of the contract. “The Korean weapon system was the most suitable in terms of technology, price and timing of introduction.” It is only the first phase of cooperation between the two countries.
For South Korea, the Ukraine war is a breakthrough into the top league of arms exporters: The deal with Poland is seen as a door opener for further exports to NATO countries.
South Korea has similar weapons standards as the USA
A second arms buyer could become Norway. There, the German Leopard tank competes with Hyundai Rotem’s K2 for the role as the Scandinavian oil state’s next main battle tank. Other countries are also interested in military equipment made in Korea, which, thanks to Korea’s alliance with the USA, has standards similar to those of the NATO countries. Canada is also among those interested in Korean armaments to replenish the arsenal after aid to Ukraine.
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South Korea is thus reaping the benefits of a targeted industrial policy that combines its own rearmament with the beefing up of the domestic armaments industry. In the past five years, the country has increased its arms exports faster than any other country in the world. Between 2017 and 2021, they rose 177 percent over the previous five years, Korea’s Export and Import Bank recently reported. Far behind were Australia with 98 percent and France with 59 percent.
South Korea thus moved up to eighth place in the league of arms exporters. In 2000, the country ranked only 31st according to the Stockholm Institute for Peace Research (SIPRI). Korean helicopters and planes are already operating in Iraq and Indonesia, Turkey, Senegal and Peru, among others. Warships and submarines are already being supplied by Korea’s shipyards to countries such as New Zealand, Thailand and the Philippines.
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And South Korea’s ambitions go further, as then-President Moon Jae-in made clear at a local arms fair last year. “The defense industry will become an important national growth engine that goes beyond national defense,” Moon promised at the time. He even made a photogenic sign of how closely politics and the armaments industry are working together to achieve this goal and flew to the trade fair on board an FA-50 jet that Korea Aerospace Industries had developed together with the American armaments company Lockheed Martin.
South Korea relies on low prices and state support
To conquer the armaments market, the export nation is recycling an old recipe that has already worked in shipbuilding and the electronics industry: quality at lower prices. Moon said it himself at the arms show: “The FA-50 is an excellent light attack aircraft that offers remarkable value for money and is suitable for advanced training, air combat and precision bombing.” The aircraft costs $33 million per unit , less than half of the entry-level American F-35 fighter jet.
State-level support for arms exports is unique to South Korean products, Jon Grevatt, head of Asia-Pacific news at Janes, a military analysis firm, told the Japan Times. These include financing packages supported by banks and the state, flexible repayment periods, technology transfer and industrial cooperation.
The upswing is based on a long-term strategy of the Korean governments to reduce the dependency of arms imports, above all on the protecting power USA. “South Korea’s strong government-led local defense industry development initiative has enabled the country to emerge as a manufacturer and exporter of defense items,” the US Bureau of International Trade said in a market analysis earlier this month. This plan is facilitated by the large domestic armaments market.
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South Korean army ranks among the ten largest in the world
To defend itself against the threat of the communist dictatorship in North Korea, South Korea, with its 51 million inhabitants, maintains a standing army of around 600,000 soldiers, the eighth largest standing army in the world. For comparison: Japan, with 126 million inhabitants, only has 246,000 professional soldiers.
From an early stage, politicians therefore called for more and more armaments to be bought at home. In addition, in 2006 the purchasing of the army, air force and navy was centralized in one procurement office in order to prevent overlapping orders and to increase coordination between the military and industry. After taking office in 2017, left-wing President Moon made arms exports a top priority.
A significantly higher proportion of economic output goes into armaments
In 2018 he started “Defense Reform 2.0”. With it he wanted to improve the clout with fewer soldiers and further reduce the dependence on arms imports. Moon increased the arms budget by 23 percent to $47.7 billion during his five-year tenure, according to the US Bureau of International Trade.
According to the Japanese white paper on defense, South Korea is investing around 2.6 percent of its gross domestic product in armaments, around twice as much as Germany in percentage terms. In addition, the Office for Arms Purchases set the goal for 2021 to buy 80 percent of the required armaments in Korea and only 20 percent from other countries. In 2015, the proportion of local procurement was still 70 percent.
At the same time, Moon also turned foreign trips into a promotional event for Korean war equipment. For example, he returned from his trip to Australia at the end of 2021 with a deal for 30 K9 howitzers from the arms company Hanwha Defense. A month later, he secured the first sale of South Korea’s Cheongung-2 missile defense system in the United Arab Emirates. At $3.5 billion, it was the country’s largest arms deal to date.
Moon’s conservative successor, Yoon Suk Yeol, continues this tradition. On the fringes of the NATO summit in July, talks about possible arms deals were part of the program for him. With the increasingly precarious security situation in East Asia, he will also continue to arm the country. Because with China, North Korea and Russia, three of the four neighbors are rather hostile nuclear powers.
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