Business Monitor International


South Korea Defence & Security Report

Published 12 August 2014

  • 92 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
South Korea Defence & Security Report

BMI View:   Continued tension with Pyongyang dominates the outlook for South Korean defence and security. The uncertainty caused by the bellicose regime to the north has driven substantial defence spending increases and will continue to keep Seoul on high alert. In addition to this headline volatility, we are increasingly interested in defence exports as growing South Korean expertise creates new opportunities to export globally. The Middle East and Sub-Saharan Africa will be key areas for this growth.

A significant portion of defence expenditure funds are expected to be used to upgrade South Korea's missile defence system. The Korea Air Missiles Defence system (KAMD), or so called 'kill chain project' will see Seoul move from its German-made PAC-2 missile system to the PAC-3 system produced by American contractor Lockheed Martin. This project is expected to cost the Ministry of National Defence (MND) approximately USD26.4bn by 2019.

In another windfall for Lockheed Martin, the MND has agreed a deal for 40 F-35 Lightning fighter jets. The deal was signed in early 2014 and is worth USD6.8bn; procurement is set to begin in 2018. In a revised arrangement with the United States, Seoul will pay USD866mn in 2014 to maintain an enhanced US military presence in South Korea, with US forces in Korea boosted to 29,300 personnel with the addition of 800 troops in February 2014. The cost has risen by 5.4% from 2013 and has been agreed for at least five years. This is a key part of President Obama's 'pivot' strategy and bolsters Seoul's security against both North Korea and a more assertive China.

Beijing's announcement in Q413 of an Air Defence Identification Zone (ADIZ) covering disputed areas of the East China Sea has increased tensions in the region. The ADIZ requires foreign aircraft to submit their flight plan to the authorities before entering the designated area. China's ADIZ encompasses the disputed Ieodo rock (also known as Suyan Rock), claimed by both...

Table of Contents

BMI Industry View
7
SWOT
9
South Korea Security SWOT
9
South Korea Defence & Security SWOT
12
Political
14
Economic
15
Business Environment
16
Industry Forecast
17
Defence Expenditure
17
Table: Defence Expenditure (South Korea 2011-2018)
19
Armed Forces
20
Table: Armed Forces Personnel (South Korea 2004-2011)
20
Table: Manpower Available For Military Service (South Korea 2011-2018)
21
Macroeconomic Forecast
22
Economic Analysis
22
Developed Markets, Investment Spending To Support Growth
23
Outlook Not All Rosy
24
Table: Economic Activity (South Korea 2009-2018)
24
Industry Risk Reward Ratings
25
Asia Security Risk Ratings
25
Table: Asia Security Risk Ratings
25
Table: Asia State Vulnerability To Terrorism Index
26
South Korea Security Risk Ratings
27
Market Overview
29
South Korea Defence Market Overview
29
Recent Developments
29
Armed Forces
30
Domestic Industries
31
Table: Key Companies in South Korean Defence Industry
33
Imports
35
Exports
36
South Korea Security Overview
42
Domestic Threats
42
Regional Threats
43
International Threats
55
Company Profile
64
Daewoo Shipbuilding & Marine Engineering (DSME)
64
Doosan Heavy Industries & Construction
66
Korea Aerospace Industries (KAI)
68
Samsung Thales
70
Regional Overview
71
North East Asia Security Overview
71
Global Industry Overview
82
Political Risk Analysis
82
Methodology
87
Industry Forecast Methodology
87
Sector-Specific Methodology
88
Sources
89
Security Risk Ratings Methodology
89
Table: Indicators And Weighting
90

The South Korea Defence & Security Report features Business Monitor International (BMI)'s independent forecasts for national and international security, the defence industry, military expenditure, employment in arms production, and arms imports and exports, as well as examining industry trends and prospects, national and multinational arms producers and the regulatory environment.

BMI's South Korea Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Korean defence and security industry.

Key Benefits

  • Benchmark BMI's independent defence and security industry forecasts on South Korea to test other views - a key input for successful budgetary and strategic business planning in the Korean defence and security market.
  • Target business opportunities and risks in the Asia defence and security sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Asia.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).

Coverage

Global and Regional Political Outlooks

A strategic overview of the world's major political risks, identifying countries facing leadership successions and nations at risk of upheaval, inter-state conflict or separatism and insurgencies, plus a summary of the world's 'wild card' low-probability high-impact risks.

SWOT Analysis

Snapshot evaluation of the major issues affecting the defence and security sectors, economy and politics, with issues subdivided into 'Strengths', 'Weaknesses', 'Opportunities' and 'Threats'.

Political Risk Assessment

Drawing on BMI's heritage of more than 25 years of Country Risk analysis, this comprehensively evaluates the key risks to domestic politics and foreign relations, focusing on issues most likely to affect either domestic security or the defence sector.

Security Risk Analysis

BMI's proprietary Security Risk Rankings provide a reliable - and country comparable - guide to conflict, terrorism and criminal risk, backed up by our analyst's latest assessment of each component. Furthermore, drawing on our country risk expertise, we assess the state's vulnerability to a serious - or prolonged - terrorist campaign.

Armed Forces Spending/Expenditure

The reports contain a detailed breakdown of areas of expenditure by the armed forces, these include spending on international deployments, WMDs and missile defence systems as well as individual breakdowns of the cost-per-soldier.

Domestic Security Overview

The domestic security overview lists the various potential internal security threats facing a country, ranging from internal security issues such as terrorism, cyber terrorism, crime and drugs, to external security issues including general defence procedures and potential threats from specific countries.

BMI Industry Forecast Scenario

Historic data series and forecasts to end-2018 for key industry indicators supported by explicit assumptions, plus analysis of key downside risks to the main forecast.

Budgets & Expenditure: Defence expenditure (local currency and US$bn); defence expenditure (% of total budget); defence expenditure (% of GDP); defence expenditure per capita, US$; defence budget (local currency and US$bn).

Employment: Employment in arms production (`000s); employment in arms production (% of labour force).

Macroeconomic: BMI's forecasts and analysis of all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Domestic Security Overview

The reports also provide a regional overview which details specific issues and flashpoints affecting , along with potential risks in the coming year.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc