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South Korea DEFENSE SPENDING AND MILITARY PRODUCTION
From the end of the Korean War to 1990, South Korea had
evolved from a country dependent on other nations for its
national security to a strong and growing nation, increasingly
capable of meeting its own defense needs. Civilian industries
maintained military assembly lines as a separate, and generally
small, part of their corporate activities.
Defense Spending
Unavailable
Figure 16. Comparison of Defense Expenditures, South Korea
and North Korea, 1978-88
Source: Based on information from United States, Arms Control
and Disarmament Agency, World Military Expenditures and Arms
Transfers, 1989, Washington, 1989, 53.
Seoul's defense budget increased in proportion to the growth
of the national economy throughout the 1970s and 1980,
demonstrating how strongly national leaders felt about improving
the armed forces
(see
fig. 16). Between 1971 and 1975, defense
spending increased from US$411 million to US$719 million. Defense
expenditures averaged about 4.5 percent of the country's gross
national product
(GNP--see Glossary).
In 1976, the first year
that the government included proceeds from the defense tax in
published figures for military expenditures, the budget for the
armed forces and defense industries increased 100 percent over
the 1975 figure to US$1.5 billion. The costs involved in
initiating weapons production and the loss of military grant aid
from the United States were the major reasons for the gradual
increase of defense spending from 5.2 percent of GNP in 1979 to
6.2 percent of GNP in 1982. By 1990 defense spending had
increased to almost US$10 billion a year, but because of the
dramatic growth in the country's economy, this figure was below
30 percent of the government's budget and less than 5 percent of
GNP for the first time since 1975.
Annual defense budgets were proposed by the Ministry of
National Defense and approved by the president following
consultations with the National Assembly. Beginning in fiscal
year
(FY--see Glossary)
1979, the Ministry of National Defense
adopted a budget management system based on the United States
Department of Defense project planning budget system. The South
Korean system focused on force modernization and the maintenance
of military organizations in peacetime at 70 percent of their
wartime strength. The government's mobilization and resource
management plans for support of the military were designed to
bring the armed forces up to full strength quickly and to
maintain the country's capability to supply the military during
wartime. Under the 1987 Constitution, the National Assembly was
accorded more responsibility to review the defense budget and to
recommend appropriate levels of spending. In 1990, however, the
president continued to have the final say on budget matters.
Approximately 40 percent of the defense budget was devoted to
weapons and equipment modernization in 1990. Defense planners
established a number of long-range goals: to establish an
independent reconnaissance system with intelligence satellites
and early warning aircraft; to improve the quality of firepower
and the accuracy of domestically produced weapons; to deploy
indigenously produced surface-to-air and tactical surface-to-
surface missiles; and to replace outdated fighter aircraft and
naval vessels with technologically advanced models that would
neutralize the threat of North Korea's modern weapon systems.
The operational costs of the three armed services constituted
approximately 35 percent of the defense budget. Improvements in
training, logistical support to combat units, and pay and
benefits provided to military personnel were a part of the
increased cost of supporting the armed forces. The acquisition of
sophisticated new types of weapons, although contributing to
national security, also increased operational costs.
The remaining 25 percent of the defense budget was mostly
allocated among the armed forces reserves; South Korea's share of
the United States-Republic of Korea combined defense improvement
program; research into new defense technologies; and construction
and maintenance of military installations.
Data as of June 1990
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