Will a Lee Jae-myung presidency save Korea's defense industry?

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Will a Lee Jae-myung presidency save Korea's defense industry?

Published: 04 Jun. 2025, 09:00 Updated: 05 Jun. 2025, 16:31

CHO YONG-JUN
[email protected]

Audio report: written by reporters, read by AI

President Lee Jae-myung visits the Agency for Defense Development headquarters in Daejeon on April 17. [JOINT PRESS CORPS]

Lee Jae-myung, a candidate who placed arms exports at the heart of his campaign pledges, has become Korea's president. Now, the global defense industry is carefully watching for whether he'll follow through on his many promises.

Korean arms exports have hit highs in recent years, with major players exporting K9 self-propelled howitzers, FA-50 fighters, K2 tanks and the Chunmoo rocket artillery system to countries such as Poland, the United Arab Emirates, Finland and India.

But the record-breaking $17.3 billion export of Korean arms in 2022 soon declined to $13.5 billion in 2023 and $9.5 billion last year, making Lee's presidency and efforts to aid the industry even more crucial to the continued profit of domestic players like Hanwha Aerospace, Hyundai Rotem and the state-run Korea Aerospace Industries who produce such weapons.

“The President’s role in the defense industry is immense — the industry mainly revolves around government demand, and defense exports are also considered to be country-to-country deals,” said Prof. Jang Won-joon of Jeonbuk National University's defense industry convergence program. “The president and his administration’s policy account for 90 percent — or even more — in shaping the industry.”

In his platform, Lee vowed to regularly preside over defense export promotion and strategy meetings, which usually include Army officials from the Office of National Security, and set an ambitious goal of making Korea the world's fourth-largest arms exporter.

Lee has also pledged to relocate the position of defense industry director, currently under the Office of National Security, to the Office of the Senior Secretary to the President for Economic Affairs, with the aim of streamlining defense dealmaking abroad. His conservative opponent, Kim Moon-soo, had proposed establishing a new “secretary of defense industry” role under the presidential office with similar duties but a higher rank.

“Lee’s plan of relocating the defense industry director is weaker than Kim’s pledge,” Sangji University Prof. Choi Gi-il, who specializes in military and defense and worked in the Office of National Security under former President Moon Jae-in, told the Korea JoongAng Daily.

“Lee would have to find a capable director who can administer the changes,” he said, highlighting that Moon established a defense industry director position but failed to name a capable person.

President Lee Jae-myung visits the Agency for Defense Development headquarters in Daejeon on April 17. [JOINT PRESS CORPS]

Lee has also shown interest in naval cooperation. The president pledged to form a team to help domestic shipbuilders gain maintenance, repair and overhaul (MRO) contracts with the U.S. Navy.

The U.S. Navy's MRO market, which Business Research Insights valued at approximately $13 billion, presents an important opportunity for shipbuilding firms. Hanwha Ocean and HD Hyundai Heavy Industries have both signed Master Ship Repair Agreements with the U.S. Naval Supply Systems Command, allowing them to bid on U.S. MRO projects. Hanwha Ocean won two in 2024.

In the field of aerospace, Lee has pledged to domestically source aircraft parts used in maintenance and supporting R&D. He also vowed to increase investment into software research and development (R&D), specifically for AI and automation.

Choi said governmental support for software development should increase and continue long-term, because Korea has a lot to “catch up” to do.

“R&D should be done as a long-term project; they can't just support it for two or three years and expect it to be done,” Jang agreed. “Pledging to be the fourth-largest exporter of arms is all good, but you have to invest in the field long-term to foster the ecosystem.”

BY CHO YONG-JUN [[email protected]]