Fast Market Research recommends "South Korea Defence & Security Report Q1 2014" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 12/24/2013 -- The spectre of a nuclear North Korea and continuing provocations from Pyongyang have prompted Seoul to invest in various new defence programmes aimed at strengthening its ability to defend itself against its aggressive neighbour. BMI predicts that defence expenditure will reach US$46bn, an 11.2% increase year-on-year. This enlarged defence budget will go towards improving South Korea's missile defence system, developing cyber capabilities and investing in a new generation of fighter jets.
After a slight thawing in relations between North and South Korea in mid-2013, resulting in a renewal of dialogue and the reopening of the joint Kaesong industrial zone; relations in the latter half of 2013 worsened. Following the common cycle of provocation then concession, North Korea has once again reneged on its international nuclear commitments.
In October 2013 it was reported that Pyongyang had restarted a reactor at its main nuclear complex in Yongbbyon. At the same time a Washington-based research institute noted increased activity at North Korea's main underground nuclear test site, indicating preparations for another nuclear test. North Korea has also publicly reaffirmed its commitment to continue expanding its nuclear arsenal, while threatening South Korea with 'annihilation' in light of its recent military exercises with the United States.
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In light of North Korea's missile and nuclear ambitions, there have been repeated warnings that Seoul must strengthen its missile defence system. In October 2013, Joint Chief of Staff Chairman, Admiral Choi Yun-hee, made upgrading South Korea's existing missile defence system, in the form of the Korea Air and Missile Defense (KAMD) system, or 'Kill Chain Project' as it has become known, a priority. Over the next five years the Ministry of National Defence (MND) plans to spend US$26.4bn on its missile defence system. This project is good news for US defence company Lockheed Martin, which looks likely to receive orders for its PAC-3 missiles, amid Seoul's concerns that its existing PAC-2 system may not have the capacity to shoot down North Korean missiles.
In a development on Q4 2013 news, Seoul no longer looks likely to procure the Boeing F-15 fighter jet. Instead, after 15 former air force chiefs submitted a petition urging the government not to acquire the F-15, Seoul has stated that it is looking to acquire more advanced planes that can better meet the latest trend of aerospace technology developments as well as the continued provocations from North Korea. While this decision is a considerable blow to Boeing, it is once again encouraging news for Lockheed Martin as their F-35 Joint Strike Fighter (JSF) is now the frontrunner to win the contract.
Korean companies have continued to enjoy success in the international market. In October 2013 the Indian Defence Ministry awarded a US$1.2bn contract to Kangnam Corp. for eight mine-countermeasure vessels.
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