This Year as a Turning Point for Defense Industry - (7) The First Defense Materials Exhibition Since the Founding of the Nation

The 4th Defense Industry Promotion Expansion Meeting held at the Blue House on May 8, 1979

[Kim Min-wook, Editor-in-Chief of Monthly Defense and Technology] In 1980, emphasis was placed on establishing an export base, and as part of the long-term export plan, efforts were focused on promoting the export of defense materials, extending export financing periods, producing and distributing catalogs by material, and collecting and disseminating overseas technical information to support overseas business activities. Additionally, to pioneer overseas markets, visits were made to exhibitions such as the British Army Equipment Exhibition and the U.S. Army Association Equipment Exhibition, and efforts were made to develop markets by inviting influential figures to explore export possibilities.

In 1981, to expand overseas market development, the latest information was regularly provided to defense companies, and cooperation with influential overseas organizations was pursued through participation in the British Ground Equipment Components Exhibition and the U.S. Army Association Annual Meeting. Efforts included inviting prominent foreign defense buyers, producing and distributing comprehensive catalogs, publishing and distributing overseas market information booklets, and disseminating information on foreign defense-related events. The first defense exhibition since the founding of the Republic of Korea, the Korea Defense Equipment Exhibition (KODEX '81), was held from September 25 to October 5, 1981, at the Korea International Exhibition Center, hosted by the Ministry of National Defense and organized by the Defense Industry Association. This exhibition promoted the development of Korea’s self-reliant defense to domestic and international audiences, contributed to creating consultation opportunities and promoting arms exports, and achieved improvements in international status in terms of security, economy, and diplomacy.

▲ The 2nd Yulgok Project and Development of Korean-Type Weapon Systems= The 2nd Yulgok Project was implemented over five years from 1982 to 1986. The goal of enhancing military strength in the 2nd Yulgok Project focused on supplementing the northern defense capabilities that were not fully addressed in the 1st Yulgok Project, setting the objective as "supplementing defense power and improving the quality of forces." To achieve this, efforts were made to establish an early warning system, expand war-sustaining capabilities, and build an autonomous military force through balanced development of tangible and intangible military power. This aimed not only to establish a foundation for advanced defense science technology and the defense industry early on through domestic production of key weapons but also to improve the force structure into a technology-intensive one and maximize integrated combat power through balanced development of each service and battlefield function.

During this period, the Army improved tank quality by upgrading the M47 and M48 tanks, developing the K1 tank, developing the K200 armored vehicle, introducing the TOW anti-tank missile, domestically producing the K55 155mm self-propelled howitzer, and operationalizing the K136A1 multiple rocket launcher. The Navy significantly strengthened maritime operational capabilities by constructing Korean-type destroyers (Ulsan-class), 1,200-ton patrol combat corvettes (PCC), and developing mine-hunting vessels. The Air Force mainly focused on foreign procurement projects such as production and deployment of the KF-5E/F, additional acquisition of F-4D/E Phantom aircraft, introduction of F-16 fighters, and acquisition of RF-4C reconnaissance aircraft.

▲ Implementation of the Offset Trade System= As military weapon systems and materials became more advanced, the issue of importing large quantities of expensive equipment arose. To prevent damage to domestic industries caused by excessive foreign purchases and to promote economic rationality, the Military Offset Trade System was implemented in July 1982. This system requires contractors to provide certain countermeasures such as technology transfer, parts production, and re-export when acquiring military equipment, materials, and services from overseas. It greatly helped in acquiring advanced technologies from developed countries and improving the management status of defense companies.

▲ Introduction of Specialization and Affiliation Systems= The specialization and affiliation systems were formalized by Ministry of National Defense guidelines in June 1983. In the 1980s, as domestic industrial technology levels improved and defense demand increased, excessive competition among defense companies began to appear. To prevent excessive competition and redundant investment and to enhance the professionalism of technology development, the Ministry of National Defense introduced specialization and affiliation systems centered on defense materials and related defense companies. Designated companies were given priority rights to participate in research, development, and production of specific weapon systems to prevent national redundant investment and promote technology development. Specialized companies refer to those producing complete weapon systems, while affiliated companies develop and produce components and parts.

The specialization and affiliation systems underwent slight changes in basic policies and concepts over time, but with the enactment of the Defense Acquisition Program Act on December 31, 2005, and the abolition of the Defense Industry Special Measures Act, these systems were also abolished. After a three-year grace period, they were completely abolished on December 31, 2008, leading the defense industry into a more intense free competition system.