[Yang Nak-gyu's Defense Club] UAE Nuclear Power Plant Maintenance 'Half Contract' Replaced by 'Defense Industry Export'

On the 14th, the Middle Eastern version of the K-2 tank was exhibited at the 'Seoul International Aerospace and Defense Industry Exhibition 2019' held at Seoul Airport in Seongnam, Gyeonggi Province. / Seongnam - Photo by Kang Jin-hyung aymsdream@

[Asia Economy Yang Nak-gyu Reporter] If President Moon Jae-in's visit to the United Arab Emirates (UAE) next month is realized, it is expected to accelerate the export front of the domestic defense industry. Since the order amount for the maintenance project of the UAE Barakah Nuclear Power Plant was less than expected, the government intends to boost exports by expanding economic cooperation into the semiconductor and energy sectors, led by defense industry exports.

Originally, Korea Hydro & Nuclear Power formed a consortium (Team Korea) with Korea Plant Service & Engineering (KEPCO KPS), a power plant maintenance company, in June last year to negotiate for an exclusive contract for the Barakah nuclear power plant maintenance project. The result was unexpected. The contract period was limited to 5 years, shorter than the overall expected project duration of 10 to 15 years.

President Moon's visit to the UAE is expected to strengthen the domestic defense market's path to new markets. According to the Stockholm International Peace Research Institute (SIPRI) report "Trends in International Arms Transfers, 2018," published last year, the UAE accounted for 3.7% of global arms imports from 2014 to 2018, ranking within the top 10 worldwide.

At the International Defence Exhibition (IDEX) held in Abu Dhabi, UAE last year, the UAE proved to be a "major player" in defense procurement. At that time, the UAE signed a $1.55 billion (approximately 1.7 trillion KRW) missile launch system contract with the U.S. defense company Raytheon, and a $350 million (approximately 400 billion KRW) Patriot missile supply contract with Raytheon. Including these contracts, the UAE military signed weapon purchase agreements worth $3.3 billion (approximately 3.7 trillion KRW) over two days with domestic and international defense companies such as Austria's Sawi, Russia's JSC Precision, France's Thales Air, and Renault Trucks.

The government's efforts have also accelerated. The presidential special envoy team includes Seong-il, Director of International Cooperation at the Defense Acquisition Program Administration (DAPA) and an Army Brigadier General. The special envoy team plans to attend the 4th UAE Unmanned Systems Exhibition (UMEX 2020) held in Abu Dhabi from the 23rd to the 25th and sign a Memorandum of Understanding (MOU) on technology protection. This is considered a further advancement following the MOU signed with the UAE in 2010. At that time, the Korean government signed agreements with the UAE on the protection of military classified information, cooperation in information security, military education and training cooperation, and defense and military supply cooperation.

The reason the government is signing a technology protection MOU is also to maintain a close and exclusive relationship between the two countries. During the Roh Moo-hyun administration, efforts were made to export about 40 T-50 advanced trainer aircraft, but in February 2009, the UAE decided to introduce the Italian M-346 trainer, which was a bitter setback.

Besides defense exports, smart technology exports are also noteworthy. Following the 2018 summit between Korea and the UAE, they agreed to promote greenhouses incorporating smart technology. A representative example is the smart greenhouse system "Cooling House," developed by Korea to withstand the high temperatures typical of desert summers. It features advanced technology that supplies water and mist simultaneously to control temperature and humidity or adjusts sunlight temperature with aluminum curtains to perform effectively in desert areas.

The Rural Development Administration Director is considering a plan to install this system on a trial basis locally in the UAE soon. During a visit to the National Institute of Horticultural and Herbal Science in Wanju, Jeonbuk, last December, President Moon said, "I boasted to the Crown Prince (of the UAE) that we could build several times the size of a soccer field," expressing expectations that "a path could open for limitless exports to the Middle East using domestically produced materials (with the Cooling House)."