The South Korean government aims to expand its export of defense equipment to $4 billion by 2020. The Presidential Council for Future and Vision has laid out a draft on how to develop an export-oriented defense industry, create more jobs, and promote research and development.
The goals are to reach $10 billion in annual production and $4 billion in annual exports, create 50,000 jobs in the industry, and become one of the world’s top seven countries in defense technology and exports by 2020.
The council proposes handing over R&D for all weaponry except strategic weapons such as missiles, cyber warfare devices, and reconnaissance satellites to private companies by 2015. At present, South Korea’s defense R&D has been dominated by the Agency for Defense Development, which distributes production orders to private contractors.
The council said the R&D budget for core technologies should be expanded and that priority must be given to drawing up detailed measures - including tax cuts - to support defense firms. A consultative body led by the ministers of defense will also draw up plans to increase defense exports.
Korea’s weapons exports amounted to only $2.5 billion in 2008, accounting for a mere 0.5 percent of the world’s $55 billion market, despite efforts by the Defense Acquisition Administration to increase the country's share of this market. The problem is the relatively high cost of Korean equipment.
Korea failed to export T-50 Golden Eagle supersonic advanced trainer jets to Singapore and the United Arab Emirates due to their higher costs compared with similar Italian jets. Korea’s K2 Black Panther tanks are equipped with a 120mm main gun and cutting-edge electronic devices, but are more expensive than U.S., British and German competitors.