국제로비스트_National Defence_THE YULGOK PROJECT SYSTEM (Mr. Jung-Sun Kim)_4

 

 

Essence of The Defense Industry

 

 

The defense industry standing

 

It was after the tense situation of January 12, 1968, that the defense industry supporting theory came to the fore as the policy task.

 

With this situation, the existing national defense perception, dependent upon American military assistance, came to the awakening that a weapons factory construction had to be considered.

 

There were two prominent reasons for the Korean government’s belief in the necessity of keenly supporting the defense industry one is the change in the American policy to Korea and the other is the anti-South threat from North Korea through continuous armaments reinforcement.

 

Change of American policy to Korea

 

The changes of the American policy toward Korea has been one of the major factors urging the direction change of the Korean government from the creation and maintenance of a defense power dependent just upon the U.S. to the construction of a self-sufficient national defense power. In the late 1950s, the American policy toward Korea was one of active military support taking the Korean War as its beginning.

 

However, the military assistance to Korea, at its peak in 1958, began to decrease as the international balance of payments of the U.S. worsened, and the share responsibility of Korea, the recipient country has become increasingly heavier.

                                                                                                                                                                                                     (Unit: 1 billion dollars)

 

FY

Classified

1952-56 total

1957-61 total

1962-66 total

1967-70 total

Free contribution

11.0

6.5

4.5

2.5

Sale

1.0

3.5

8.5

9.0

Total

12.0

10.0

13.0

11.5

 

<Table 3-2-1> Free contribution and sale of American foreign weapons export

(Source: John Stanley and Maurice Pearton, the International Trade in Weapon, London.)

 

In particular, the American MAP Transfer Program in the 1960s sped up the reduction of actual military assistance working as a considerable restriction factor to the Korean development finance. The so-called relaxation of East-West tensions of the 1970s brought about more significant alterations in the American policy toward Korea. The assistance that was already in decline was cut off in the 1970s and the military assistance was changed from free supply to credit assistance.

 

As for the Report of the Ministry of Defense of the U.S., free military assistance (MAP) to Korea was 3.7 billion dollars, 9.7% of the total sum of 38 billion dollars for 25 years from 1950 to 1975, and the Korean loan reached up to 3.41 billion dollars, 7.7% of FMS total sum 44 billion dollars.

 

The sum of two kinds of assistance totals 7.1 billion dollars, and the military sale loan contribution is as large as 48%.

 

Furthermore, the Ford Administration only clarified its plan to close the free material assistance to Korea in an official answer to the definite request for curtailment of the current military assistance plan and final conclusion of Congress in January 21, 1976.

 

With this, the free military assistance supply was terminated in the 1977 American F Y (July 1 – June 30).

 

The Ford Administration, which brought about this termination of free military assistance, suggested that it would increase the FMS loan instead of free military assistance to replace the equipment of friendly nations and allies. Needless to say, the American Congress and its people had welcomed this change in military assistance policy; the altered policy was maintained without any significant modification till the Carter administration.

 

In the Carter administration’s request to Congress in 1977, for the 1978 American FY, the military sale loan shared was 98% or so, and it held 99% of military assistance to Korea in the 1979 American FY as in the report of the U.S. Department of State in February 1978.

 

However, after President Reagan was inaugurated in the 1980s, the American policy to Korean security was transferred favorably according to his defense priority policy.

 

At this point of time, Korea should’ve prepared for the uncertainty and increased the defense industry to achieve the goal of national power by its own capacity.

 

North Korean armaments reinforcement

 

North Korea, which has been aware of the munitions industry advancement since immediately after the 1945 Liberation, has imposed armaments reinforcement, promoting munitions industry construction by maintaining a heavy industry priority policy through a series of economic plans.

 

North Korea provided the foundation for the munitions industry and put the key concern on the machinery industry from 3-year planning for restoration just after the suspension to the 1st 5-year plan and maintained an armament-oriented heavy industry priority policy in the 6-year plan and the 7-year plan.

 

Already in the 7-year plan 57% of the so-called basic construction investment was allotted in the industrial sector, and 80% of that fell in heavy industry.

 

This investment allotment type was not changed in the 6-year plan that followed. In particular, a series of events in the early 1960s such as suspension of assistance from Russia and China, worsening of conflict between Russia and China and the culmination of border tension due to the Cuban situation sped up the North Korean munitions production expansion according to its 4 military principles.

 

Therefore, North Korea went the way of the individual basic firearms production stage in the 1950s, heavy weapons production stage in the 1960s, and the large equipment production stage in the 1970s.

 

Recent reports have it that North Korea reached the prototype making stage or developed the mass production system for in-house production of tanks based on the of Russian model T-54 and T-55 tank, and made a Mig fighter for testing in 1976, as well as producing submarines and some destroyers in 1975.

 

There is no way to presume how much the North Korean munitions production shares in GNP or industrial production, but it seems to accomplish a considerable amount.

 

We can identify that the North Korean military cost had expanded rapidly till 1971 by specified periods when we see <Table 3-2-2>. In other words, the average per annum military cost size was 60 million won in North Korean currency in 1661-63, the first 3 years of the 7-year plan.

 

It increased to 280 million won in the successive 1964-66 period, 1,440 million won in the period 1967-69, and increased quickly to 1,940 million won for 1970-7, just before the South-North dialogue, and the military cost rate grew from 2.4% to 31% of the annual expenditure to represent peak level after the war.

 

This rapid expansion of military cost size during that period is the result of the enforcement of the 4 military principles claiming self-military strategy and the revealing of military budget that was covered-up in past years.

 

However, the military costs of North Korea were curtailed to 1.2 billion won in the 1972-73 period when the South-North dialogue was in progress. It increased again during 1974-76, and the military costrate of the annual expenditure was decreased from 31% to 16% cut by almost half.

 

However, those changes had been just an alteration with a political goal.

 

Because

 

It goes against with hardening phenomenon of the military budget level of East and West nations of World War II, and

 

There had been no change in North Korean military principles at these times, and

 

North Korean military power size was increased again after the South-North dialogue, and

 

There had been no dramatic decrease in military costs by North Korea.

 

Period

Military cost

(North Korean currency: 1 million won)

Military cost /annual expenditure (%)

1961-63

60

2.4

1964-66

280

7.9

1967-69

1,440

31.2

1970-71

1,940

31.0

1972-73

1,270

16.2

1974-76

1,830

16.4

1987

3,970

13.2

 

<Table 3-2-2> North Korean military cost trend during the above period

 

Consequently, in this trend of military expansion, the military cost rate was an average of 23. 9% per annum in the 1967-1971 period, during which time North Korearevealed a military budget, equal to that of a wartime economy.

 

In addition, this became the decisive reason for armaments competition and armaments reinforcement between South and North Korea. The military cost of 1987 was 3,970 million won (in North Korean currency), charging 13.2% in total taxation.

 

The reasonable grounds of support for the defense industry

 

The grounds for defense industry support could be considered form the 4 aspects seen below;

 

First, its the best means of deterrent to North Korean war provocation, second is, the efficient operation of the national budget, third is, the localized national defense science being a nucleolus of national science and technology, and fourth is, investment leading to updated science and technology.

 

Quickening of modern the defense industry in Korea

 

The modern defense industry quickened in January 1970, when President Park Jeong Hui, in his new year round to the Ministry of Defense in January 19, 1970 ordered the establishment of a mobilization system that could mobilize personnel and material resources of warfare, and the Ministry of Defense research to transfer civil industry into the mobilization system as Korea needed the capability to hold until foreign countries could assist in the case of attempted invasion.

 

The national defense budget of that year was 440 million dollars due to military assistance decrease from international conditions like Chinese strengthening and American economic stagnation. Of the 440 million dollars, the Korean charge was 300 million.

 

But when 4o million dollars is extracted for the logistics transport cost and the American civil officer and application costs from this 140 millions, the actual amount came to 100 million dollars, and yet this was decreased gradually since the Nixon Doctrine was announced.

 

Consequently, the military assistance size of 1976, the year in which the 3rd economic development plan ended was appropriated as 50 million dollars, but the possibility of its termination was high whether Korea commenced the defense industry or not. In addition, the U. S. fought hard for recognition and Vietnam collapsed gradually.

 

North Korea, which produced individual firearms, constructed a base for self-support and raised its armament cost to a wartime level of 24% of the GNP, began to produce highly advanced strategy weapons after it completed the production system of ground army firearms and developed an underground production base for the major munitions industry as the tension between South and North Korea grew higher in 1970s.

 

Korea had started the defense industry in full scale by the beginning of the 1970s. It installed a munitions industry supported by the Office of the Official in Charge in the Ministry of Defense munitions administration and organized the National Defense Science Research Institute under the supervision of the Minister of Defense by Presidential Decree in August 6 of the year after.

 

It had composed the Korean Economic Industrialization Committee at ministerial level by June 6 of the same year.

 

Then on December 31, the National Assembly proclaimed the Act on the National Defense Science Research Institute to construct a Canadian NRC type institute.

 

The institute was organized as a total research institute to operate efficient research and development on weapons, equipment and logistics by integrating the research and development function that was performed respectively by the army, navy and airforce, and support the defense industry technically.

 

Forming national defense science by organic and effective relationships between the military science field and domestic research and development engines. Its management team was composed of high military profiles and persons from science fields.

 

The defense industry development stages

 

The Korean national defense industry has passed through 3 development stages since the early 1970s in which it promoted the motto of national self-defense.

 

In the 1st stage (1970-1976), the government led the localization of basic weapons, imitative development of defense industry goods, raw materials

 

introduction and reverse design capacity cultivation for the purpose of generation of the defense industry base.

 

The defense industry support policies made in this stage lists the establishment of the National Defense Science Research Institute and the Defense Industry Administration of the Ministry of Defense and enactment of the Special Measures Related to the Defense Industry Act.

 

The objective of the 2nd stage (1977-1981) was the completion of the local production base for basic weapons, the mass-production of traditional

 

weapons and the attempt to make precision weapons. For this objective, the Korean government transferred the production technology to the

 

civil area and prompted imitative development of precision weapons, improvement of the function of basic weapons, the development of

substitute materials and cultivation of the basic design capacity, and financed the defense industry support fund.

 

The major tasks of the 3rd stage (1982-1986) were the generation of the foundation for basic research, localization of raw materials and

 

rearrangement of the weapons system for the purpose of the formation of a base for highly advanced precision weapons. In recent days, we are carrying out the policies for planned production, arrangement of the related areas of the systems of defense industry and localization rate intensification to solve many problems of the defense industry In addition, we plan to build a small elite group of production and Assembly enterprises of major weapons while supporting professional small and medium-sized enterprises for component and material providers.

 

An overview of the Korean defense industry development is shown in below <Table 3-2-3>.

 

 

Period

Object

Policy lists

Stage 1

70-76

- Fostering base of defense industry

- Localizing primary weapon

- Creating national defense science research institute

- Launching primary weapon research and development

- (American engineer cost introduction)

- Cultivating reverse-system capacity

- Establishing the Ministry of Defense Industry Administration

- Establishing Special Measures Related to the Defense Industry Act

- Assisting defense industry business and defense industry logistics

Stage 2

77-81

- Completing base of primary weapon

- Manufacturing precision weapon

- Fostering the defense industry supporting fund

- Establishing primary weapon production system

- Launching highly advanced precision weapon research and development

Stage 3

82-86

- Fostering base of highly advanced precision weapon

- Re-establishing weapon system application management operation

- Localizing raw materials

- Cultivating system design capacity

Stage 4

87-91

- Building up defense industry logistics production system

- Enabling defense industry to product as planned

- Establishing specific system for defense industry businesses

- Reconsidering localization rate

 

<Table 3-2-3> The defense industry development stage