A Defense Industry Leader with Humility Is Needed

The 2010 film "Confucius: The Spring and Autumn Period" features Confucius (551?479 BC), who was born in the State of Lu in China. King Duke Ding of Lu, seeking to restore his crumbling royal authority, appoints Confucius, the era's most brilliant strategist. In the film, Confucius is portrayed not as a philosopher, but as a tactician akin to Zhuge Liang. The scene where he regains territory lost to the State of Qi with just a few words showcases the pinnacle of diplomatic negotiation.

His tactics are also remarkable. He devises a strategy to defeat 500 chariots with just 100 wagons. The term "Chijung" (輜重) appears here. Chijung refers to wagons carrying military provisions on the battlefield. However, it also signifies "maintaining a state of humility and calm so as not to attract attention," by masking oneself. Chapter 26 of the Tao Te Ching interprets Chijung as an essential quality that a nation's leader should possess.

As we enter the era of Trump’s second term and face turbulent times, we urgently need leaders with such virtues. Seok Jonggun, who took office as the head of the Defense Acquisition Program Administration in February last year, is a leader in the K-Defense policy sector. In his inaugural address, Commissioner Seok stated, "We will strive to become one of the world's top four defense industry powerhouses and expand financial support for defense exports."

What does his first-year report card look like? After peaking at $17.3 billion in 2022, defense exports fell to $13.5 billion in 2023 and dropped below $10 billion in 2024. This marks three consecutive years of decline. The promised $20 billion in defense exports has not even reached half that amount.

Nevertheless, Commissioner Seok visited Saudi Arabia and Norway this month, once again promising that this year's defense exports would achieve a record high and reiterating the goal of becoming one of the top four defense exporters. The reason is as follows: export projects worth approximately $9.4 billion, which had been delayed due to extended negotiations, are expected to bear fruit this year.

But is this promise feasible? According to the Stockholm International Peace Research Institute (SIPRI) "International Arms Transfers 2023" report, from 2019 to 2023, South Korea ranked 10th in the global defense export market with a 2.0% share. This is actually lower than the 2.4% share and 9th place held in the previous five-year period. To reach the top four global defense exporters as Commissioner Seok has promised, the market share must increase. South Korea must surpass China, which currently holds fourth place with a 5.8% share. Annual defense exports would need to exceed $50 billion. However, there is no concrete export blueprint.

What defense industry leaders should be emphasizing is not the target export amount, but policy. Commissioner Seok must first address the financial policy tasks he has already promised. In the National Assembly, some amendments to the Act on the Development and Support of the Defense Industry are still pending. As the impeachment crisis drags on, it is impossible to guarantee when the bill will be processed.

There are also calls to expand financial support for defense export assistance. Last year, the Export-Import Bank Act was amended, raising the statutory capital limit of the Export-Import Bank from 15 trillion won to 25 trillion won. However, actual capital injection amounted to only 2 trillion won. The plan is to increase the limit to 25 trillion won by adding 2 trillion won every five years, but no one can guarantee this will happen. Regulations prohibiting loans exceeding 40% (10 trillion won) of the bank's equity capital (25 trillion won) to any single borrower could also hinder export expansion.

Let us recall the phrase from Chapter 26 of the Tao Te Ching once again. The Tao Te Ching says, "If you treat yourself lightly before the world, you will lose your foundation; if you act with impatience, you will lose your position as ruler." Leaders in the defense industry must take these virtues to heart.