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I. The Russo-Ukrainian War and South Korea’s Rapid Rise in the Global Arms Market
II. Escalating Arms Export Competition and Possible Backlash and Check among Allies and Partners
Ⅲ. A Strategy for Becoming a Power Player in Defense Exports
At the ROK-Australia summit, held on the sidelines of the G7 summit, President Yoon Suk Yeol pledged to ramp up efforts to advance defense and global supply chain cooperation as one of the like-minded regional players in the Indo-Pacific that share democratic values by strengthening regional cooperation in the defense and space industries and increasing joint military exercises. And at the ROK-India summit, President Yoon vowed to deepen cooperation with India in the defense, digital, bio-health, and space industries, and to expand cooperation in the defense industry with Germany and Indonesia. As it is forecast that the Korean government will endeavor to facilitate defense and high-tech cooperation with like-minded countries in the region, its military diplomacy needs to be formulated and implemented in a way that advances Korea’s military and economic interests to improve Korea’s standing in the Indo-Pacific by joining regional efforts to establish a robust rules-based international order in the region.
I. The Russo-Ukrainian War and South Korea’s Rapid Rise in the Global Arms Market
The Russo-Ukrainian War, entering its second year, is rapidly depleting the two countries’ weapons stockpiles, which has led to the rising demand for arms among the Western countries supporting Ukraine and accelerating large-scale arms production around the world. The war, which broke out amid the intensifying U.S.-China competition and conflict between competing blocs, justified a significant increase in the European countries’ defense spending despite the ongoing economic recession. Global defense spending, which had already been on an upward trajectory, increased by 26% in Japan, 17% in Germany, 14% in Taiwan, 12% in the United Kingdom, 10% in the United States, and 4.4% in Korea (KRW 57.143 trillion) in 2022, respectively. The Russia-Ukraine war is also fueling arms production competition around the world. American IT companies - Microsoft, Google, SpaceX, and Planet Labs, as well as defense companies that provided various support for Ukraine against Russian aggression, are making their way into the defense industry.
South Korean defense companies are deemed affordable providers of high-quality, high-tech weapons, and their capabilities for arms production have reached approximately 80 to 90 percent of those of the world’s leading weapon producers. From 2017 to 2021, Korea’s arms exports were ranked eighth in the weapons industry with a global 2.8% share. And Korea’s defense industry has reportedly grown by the largest in the global market over the past five years with its arms exports soaring by 177%. The Korean government also vowed to increase its share of defense exports to 5 percent by 2027 to become the world’s fourth-largest defense exporter after the U.S., Russia, and France. European countries have reduced mass production of post-Cold War tanks and cannons. In contrast, Korea has maintained fast mass production capabilities as it remains in a state of war with North Korea. For Ukraine’s European allies whose weapons stockpiles are being depleted, South Korean-made weapons drawing much attention as an attractive alternative provided by their democratic ally or partner. Korea recently signed an estimated $12 billion arms deal with Poland, including K2 Black Panther worth $5.76 billion (KRW 7.6 trillion) and K9 self-propelled howitzers, and FA-50 light fighter jets worth $3 billion (KRW4.177 trillion). The deal also includes the follow-up provision of ammunition and military supplies worth $4 million. As part of efforts to increase its presence in the global arms market, the Korean government discussed plans to co-develop guided weapons for defensive purposes and multipurpose transport aircraft with the UAE and discussed ways to forge cooperation on the production of unmanned combat aerial vehicles with U.S. defense companies. South Korean defense companies’ rise in the global market will likely propel various security cooperation with regional players in the Indo-Pacific, allies, and partners around the world to join hands with Seoul to establish various forms of security cooperation.
II. Escalating Arms Export Competition and Possible Backlash and Check among Allies and Partners
In the wake of the ongoing Russia-Ukraine war, the global arms market’s demand for weapons that can be deployed in actual warfare has surged. This means that South Korea’s rapid rise to be one of the top global weapons suppliers in the defense industry could cause backlash and check from the largest arms exporters and weapon producers, and work to its disadvantage in negotiating arms deals. For instance, Norway’s decision in February 2023 to order Germany’s Leopard 2A7 instead of South Korea’s K2 Black Panther would be a viable example. It has been alleged that Germany could strike a deal with Norway primarily because the two countries have tighter military and political connections as NATO members not because Black Panther significantly lacks the technological edge and performance Norway expects.
It is also possible that competitive bidding in arms deal negotiations may cause arms exporters to engage in negative campaigning by spreading false information against their competitors.
On the flip side, this means that the public’s views of South Korean weapons’ cost-effectiveness and performance in the potential arms importers could have a positive impact on Korea’s bargaining power and competitiveness. And it is worth noting that Korean defense companies should compete not only with Chinese and European counterparts but also with those of U.S. allies and mid-sized powers including Japan, Israel, and Türkiye, and various political and diplomatic interests will likely be key factors in the global arms market. Therefore, the Korean government needs to be clear-eyed in crafting and implementing its defense diplomacy as it looks to boost arms exports at a time of rapid changes.
In his Foreign Policy article on January 2023, a defense analyst Blake Herzinger, a nonresident fellow at the American Enterprise Institute (AEI) argued that “South Korea’s geographical distance from Europe might be a deterrent for states that prefer to shop with their neighbors. But “Korean willingness to transfer technology and localize production is a considerable advantage.”
South Korean defense industry’s production capacity is a vital national security interest for the U.S., and the war in Ukraine is consuming an enormous amount of weapons at an unprecedented rate. With European defense industries under strain, Europe’s turn to Seoul for weaponry supplies fully aligns with the West’s security interests. Herzinger points out that creating a deeper linkage with Korea – a country aspiring to become a power player in defense exports - would be a safer option than allowing Europe’s security to be held hostage to Berlin’s wariness of offending Moscow.
Ⅲ. A Strategy for Becoming a Power Player in Defense Exports
There are three ways in which the Korean government could protect Korea’s defense industry and pave the way for Korean weapons suppliers to win more contracts with foreign buyers.
First, Korea’s defense exports should be more than just selling arms. On top of exporting Korean technology, military equipment, and weaponry, a whole package of operational doctrine – including how the Korean military operates its weapons and repair and maintenance personnel – should be shared with prospective clients. Also, sales of weapons should open up avenues for joint military exercises and operations with buyers of Korean weapons, especially with friendly nations. Once Korean command and control equipment and surveillance and reconnaissance equipment make their way into a country purchasing weapons from Korea, this could pave the way for joint military exercises between Korea and the client country, which would in turn promote interoperability, interdependence, as well as a sense of unity between the military personnel on both sides. In other words, Korea’s arms sale should involve exporting skilled human resources and be about raising the possibility of Seoul’s military cooperation with a prospective client country. And the Korean government must support Seoul’s defense companies every step of the way with well-thought-out strategies.
Second, the Korean government should closely monitor how other countries view South Korea’s drive to become a bigger player in international weapons sales and take quick steps to foster favorable views of Seoul’s defense deals. The government should keep the deals from creating jitters among major arms exporters by allaying concerns that Korea’s arms sales could hurt other arms exporters’ economic interests and fuel competition among the world’s weaponry suppliers. Korea needs a convincing narrative that frames its defense deals as part of Seoul’s contribution to global security as well as a win-win outcome for all stakeholders in the long run. It is in this respect that Korean policymakers should pay attention to criticism by the U.S., Europe, and other major arms exporters over Korea’s hesitancy to supply weapons directly to Ukraine. Since any criticism of Korea, regardless of its intensity, could hurt Seoul’s reputation, the government should strive to boost Korea’s image overseas especially as the country moves to emerge as a major player in global arms sales. Put simply, the Korean government should build a compelling narrative that the world’s major arms exporters and the countries purchasing Korean weaponry all have a very real interest in ensuring a robust South Korean defense industry. It is important to convince these countries that they will see real benefits from buying weapons from or militarily cooperating with Korea. This is not a simple task, but the Ministry of Foreign Affairs, the Ministry of Defense, the National Intelligence Service, the Korean military, the Ministry of Science and ICT, and the Ministry of Trade, Industry, and Energy should actively share ideas to forge a powerful narrative that would underpin Seoul’s drive to become a powerhouse in global arms exports.
Third, while Korea has already been engaging in active intelligence sharing and military exercises with the U.S. and other friendly nations, it is high time that the Korean government explore new areas of cooperation with potential partners in the defense industry sector. Korea could reach out to prospective defense industry partners for military intelligence sharing, joint response to cyber attacks on defense industries and other critical infrastructure, and joint development of weapons systems. Korea’s arms sales should not be only about making profits; exporting Korean weaponry should also generate new opportunities to build deeper trust and solidarity with friendly nations and forge stronger diplomatic ties. To that end, intelligence agencies have a critical role to play, as joint military exercises and people-to-people exchanges between intelligence agencies of different countries could foster solidarity and mutual trust and eventually lead to more defense deals and the introduction of Korean weapons system to partner countries - a virtuous circle that benefits all parties involved. It should be noted that joint military exercises could pave the way for stronger and broader military cooperation. Korean intelligence agencies have recently conducted cyber defense exercises with NATO, and the Alli
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