With the value of its exports expected to exceed that of China and Germany by year’s end, South Korea is poised to be among the world’s four largest defence-exporting countries, according to a government research institute. “Defence exports this year are expected to exceed the government’s target of US$15 billion – and quite possibly reach more than US$20 billion – if export contracts with Australia, Malaysia, Norway and Saudi Arabia are finalised by the end of this year,” said a statement this week by the Korea Institute for Industrial Economics and Trade (KIET), a national policy research institution under the Korean prime minister’s office. The country’s defence-export value, which ranked eighth worldwide from 2017-21, increased by 177 per cent over the past five years, compared with the 2012-16 period, according to data collected by the Stockholm International Peace Research Institute (SIPRI). That marked the steepest increase rate in the world – nearly three times larger than the second-biggest increase of 59 per cent by France – and it stood in sharp contrast to China’s 31 per cent decrease and the United Kingdom’s 41 per cent decrease in the same comparative period. South Korean shipbuilders urged to adapt as China’s tech improves KIET noted that while sales of South Korean arms had previously been limited to countries in Asia and North America, exports have surged as a result of trade expanding to the Middle East, Europe, Central America, Oceania and Africa. While its production of military items was previously limited to ammunition and ships, its offerings have expanded to include more advanced technology, including fighter jets and guided missile systems. Some of the prospective contracts that the KIET report says will push South Korea up the defence-export rankings involve sales of the AS-21 “Redback” armoured vehicle to Australia – a deal worth about US$5 billion to US$7.5 billion. Other deals include sales of FA-50 light-attack aircraft to Egypt, worth up to US$3.5 billion, and K2 tank sales to Norway and Egypt estimated to be worth up to US$1.7 billion and US$2 billion, respectively. In May, Poland’s minister of defence also announced that his country was “strengthening military cooperation” with South Korea via deals to buy from its weapon manufacturers. From 2017-21, the top four countries by defence exports were the US, Russia, France and China, according to SIPRI. The US comprised 39 per cent of the market, Russia had 19 per cent, France held 11 per cent, and China accounted for 4.6 per cent. South Korea ranked 8th, holding a 2.8 per cent share in 2021 with its US$7.25 billion worth of defence exports, and this followed a 10-year period in which the annual figure was generally in the range of US$2 billion to US$3 billion, the KIET report said. But even with its significant increase in exports expected for this year, South Korea has not reached the level of the most advanced nations, the report noted. Partners or rivals? China ‘supplementing’ Korean industrial development model “Countries that are advanced in terms of defence exporting actively support such exports through various government-level support systems,” the report explained. “The US, Russia, France, Israel, et cetera, have created comprehensive and rapid decision-making and support systems by building a strong defence export control structure,” the report said. Seoul’s ambitions of becoming one of the top four defence exporters should include plans to diversify its export offerings; upgrade its export support system to that of other advanced economies; and form deals with the US defence market, the report added. “Continuous innovation in defence exports is required,” it said, citing the “rapidly changing international security environment”.