South Korea wants to become one of the biggest arms exporters in the world
10/02/2022 16:50:50in Economics
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13.04.2022MOON JAE-IN began his five-year term as South Korea’s president in 2017 by pledging to act as his country’s peace chief, restoring relations with North Korea and ending the decades-long state of war on the Korean Peninsula. Having failed to achieve that goal, Mr Moon looks likely to end his term – elections are due next month – with a reputation as his country’s leading arms dealer.
Last month, Mr Moon returned from a trip to the Middle East with a $3.5 billion contract to sell a local missile system to the United Arab Emirates (United Arab Emirates), the largest contract in the history of the South Korean defense industry. Following the same trip, a $1.7 billion deal to sell an artillery system to Egypt was reached earlier this month after a decade of negotiations. Mr Moon also signed a deal worth $700million to sell the same weapons (pictured) to Australia when he visited its capital Canberra in December
The wave of deals is proof of South Korea’s ambition to join the ranks of the world’s major arms exporters. The country has long sought to capitalize on its large domestic spending on arms development by finding foreign customers for its weapons. The strategy paid off. South Korea’s arms exports have increased more than sixfold since 2005; in 2021, they exceeded imports for the first time. The government sees the defense industry as a great source of future growth.
South Korea’s potential as an arms exporter stems from its persistent confrontation with its northern neighbor. The need to maintain its guard against North Korea means that, despite its medium size, South Korea has long been one of the world’s biggest spenders on troops and armaments. In 2020, it ranked 10th in the world for military spending, according to the Stockholm International Peace Research Institute, a think tank. That year, defense accounted for 12.4% of the state’s annual budget and 2.8% of the GDP, more than in Britain (at 2.2%) and about the same as in India (2.9%).
Growing discord between America and China and uncertainties about America’s commitment to its global alliances have only confirmed the importance of greater security autonomy. Under Mr. Moon, South Korea has increased spending on acquiring and developing new weapons systems in a bid to modernize the armed forces, while reducing the proportion of the defense budget spent on salaries and training. ‘interview. In December, Moon said South Korea should be “proud” of its military prowess and growing defense exports.
As local military technology has improved, exporting it has become both more plausible and more lucrative, says Sheen Seong-ho of Seoul National University. Many domestic weapons systems are now of similar quality to those produced by America, South Korea’s main ally, with whom it has numerous technology-sharing agreements. But they remain cheaper, attracting customers in emerging markets. More than half of exports are destined for other Asian countries, notably the Philippines and Thailand.
Exporting more also makes sense for South Korean defense companies, which have long only served their own armed forces. Producing larger quantities should reduce production costs per unit and help cover development costs.
South Korea’s emerging role as an arms exporting power also has other advantages for the government. Defense agreements are often accompanied by bilateral security and technology cooperation agreements, making them a useful foreign policy tool. The agreement with Egypt came with a promise of mutual military cooperation in the future.
However, the new export industry also carries certain risks. The government is not particularly demanding of its customers. It suspended arms sales to Myanmar just weeks after last year’s coup, following a public outcry. Egypt, Thailand and United Arab Emirates are not beacons of liberal democracy. But with the exception of Myanmar, public criticism of the accords has so far varied from muted to non-existent.
Simpler concerns also emerge. A fifth of the cost of a locally developed fighter jet will supposedly be paid for by Indonesia under a partnership agreement. But Indonesia is reportedly behind on its payments. It remains unclear how much of the pledged contribution South Korea will actually receive. Not all export deals are good. ■
This article appeared in the Asia section of the print edition under the headline “Explosive growth”
South Korea wants to become one of the biggest arms exporters in the world - OLTNEWS
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