Report: Force reduction and self-reliance to influence South Korean defence spending


The annual defence expenditure of South Korea is expected to reach $43.3bn by 2022, witnessing at a compound annual growth rate of 4.84%, according to a report by Strategic Defence Intelligence (SDI).

Titled ‘Future of the South Korean Defence Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2022’, the report offers insights into South Korea’s defence spending patterns.

The nation’s defence spending is anticipated to be driven by military force reduction, acquisition of new equipment and systems to replace obsolete military equipment, as well as enhancement of self-reliance through the development of indigenous defence manufacturing capabilities.

"The allocation for revenue expenditure is anticipated to average at 69.5% of the total budget during 2018-2022."

The allocation for revenue expenditure is anticipated to average at 69.5% of the total budget during 2018-2022, whereas the capital allocation is expected to come down from an average of 30.8% during 2013-2017 to 30.5% over the forecast period, due to the nation’s strategy to reduce acquisition costs by procuring next-generation military equipment and weapon systems from domestic suppliers.

The allocation for research and development (R&D), which constituted 6.6% of the total defence budget in 2016, is anticipated to grow to 9.2% by 2021. The domestic defence R&D activity is anticipated to provide the nation new capabilities in the fields of laser weapons, unmanned ground vehicles (UGVs), and unmanned surveillance vehicles.

The South Korean Ministry of Defence is anticipated to procure fighters and multi-role aircraft, patrol craft, missiles, surveillance systems, hi-tech sensors and radar systems, and counter-insurgency systems over the forecast period.