Underlining its “firm resolution to prepare for increased North Korean threats”, the government of South Korea has set the 2017 defence budget at 40.7 trillion won (€33bn) — a 3.7% increase from the previous year and the first time that defence expenditure has exceeded 40 trillion won. The news follows Japan’s recent announcement (link) that it is likewise increasing defence spending to record levels.
One of Seoul’s top defence priorities is the Korea Air and Missile Defence (KAMD) system, designed to defend against North Korean missile threats. Next year’s defence budget will include 533.1 billion won for the KAMD project, a 40.5% increase from this year. The KAMD is designed to intercept North Korean ballistic missiles in their terminal stage. Its core weapons system consists of medium- and long-range surface-to-air missiles (M-SAM, L-SAM), Patriot missiles, and an early warning radar. The KAMD project is scheduled for completion by the mid-2020s.
In parallel, the U.S. and South Korean governments announced in July an agreement to deploy a Terminal High Altitude Area Defense (THAAD) missile system on the Korean peninsula.
The 2017 budget also includes 303 billion won for the KF-X fighter project, which is likewise due to be completed in the mid-2020s. This represents a four-fold increase from 2016 and suggests that development work is set to accelerate. Designed to replace the country’s ageing F-4D/E Phantom II and F-5E/F Tiger II fleets, the multi-role KF-X will be designed and built by Korea Aerospace Industries Ltd (KAI) in partnership with Lockheed Martin.