Prospects for 10 tril. won arms purchase project (1)

New Defense Minister Kim Dong-Shin has ordered an interim review of the four major programs to beef up the combat capability of the South Korean armed forces. Code-named X project, they constitute the largest-scale project to be undertaken by the Korean military. Estimated to cost nearly 10 trillion won, they include a next-generation fighter program (FX), purchase program for big assault helicopters (AHX), and a next-generation destroyer program (KDX3). The review was seen as required to check up on intensifying lobbies by arms dealers tending to create a raft of favoritism and graft scandals. This series will discuss in three parts the progress of the X project, the reality of lobbying and its effect upon Korean-American relations and international politics around Korea. -- Ed.

``Of late I have been haunted by X-file dreams, breaking into a cold sweat every night``.

So grumbled a ranking Defense Ministry official responsible for arms buildup programs. To him the enormous job of carrying out the massive 10 trillion-won X-project, including the FX program, might come as a nightmare. The EX program of acquiring an early warning system at a cost of some 800 billion won also awaits him early next year.

Inter-service rivalry:

A number of big programs are set to crowd the weapons purchase schedule this year because the three branches of the military are going all out to claim their respective shares. Such a concentration of large programs in a short span of time seldom happened under most previous administrations. The original intermediate defense ministry plan called for only the FX and surface-to-air missiles (SAM-X) programs during the year. But the army and the navy pushed for advancing their AHX program and KDX3 programs, respectively, to this year. The two had been scheduled for next year.

These programs were planned and championed by the services for years but had to be delayed on account of the financial crisis of 1997. The landmark inter-Korean summit last June, which cleared the way for reconciliation between the S-N Koreas, once seemed to stave off the need to beef up Seoul`s arsenal.

Unnerved leaders of the army and the navy joined the internal effort to lobby for strengthening their stock of hardware and boosting readiness. Of course, those programs can hardly afford to be postponed indefinitely. They are necessary for the balanced development of the three services and to equip them for sophisticated future wars, thus providing for the security of the nation amid cross-pressures from surrounding powers even after Korea`s reunification.

Budgetary appropriations:

As each branch of the armed forces is determined to claim its individual say and share in the total defense buildup, an inter-service rivalry got underway in a way analysts criticize as reckless and without priorities.

The army`s AHX program is being contested by many. The army is responding with greater energy to promote the program, even creating a public relations task force for that purpose despite the fact it has no place in the army table of organization.

Over the coming 7-9 years, as much as 10 trillion won will be required for the proposed package. As things now stand, it is open to question whether than much money could be generated under mounting pressure for cutbacks in defense spending. Once contracts are made for the purchase, the vast sums of money to be paid would impose an even heavier burden on the state coffers.

Defense officials say they could make do with an annual increase of 6 percent in military outlays a year to keep pace with the growth of government finances. Progress in inter-Korean engagement and changing economic conditions might call for reduced arms spending in the years ahead, retarding the arms buildup project altogether.

Possible aftermath:

The Korean fighter program (KFX) of the past and similar weapons acquisition schemes have been beset with one scandal after another, most notably the one involving Linda Kim, a lobbyist residing in the United States. Widespread concerns are also expressed over the transparency and fairness of the arms sale deals this time around. Many government officials, company executives and agents of arms exporting countries are bracing for vigorous entry into the local market, giving rise to a lot of controversies and rumors.

Word is going around in the opposition camp that huge commissions have already been delivered to Korean politicians. Some go so far as to say that most of the contracts have already been covertly awarded. The instruction given by Defense Minister Kim for another review is apparently aimed at forestalling unsavory suspicions in the aftermath of the arms purchases. As a result of the review, some programs could be readjusted or rescheduled beyond the current year. Such procrastination and reexamination might boost the bargaining position of the Seoul government so as to lower prices and improve the terms of technology transfer. At the same time, some military leaders are worried about undesirable intervention in the process of ongoing negotiations, which could undercut the professionalism and integrity of the deals.

Lee Chol-Hi klimt@donga.com