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National Defense Budget Standing
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National Defense Budget Appropriation
Appropriation of national defense budget

The genuine security of a nation is achieved when it has social stability, substantial economy and a solid national defense. So these areas are to be developed supplementary to each other in a balanced manner. The policies of these areas can be fulfilled when the nation’s resources can support this at a reasonable level. National resources should be allotted to the social development costs for social stability and the peoples’ welfare, economic development costs for national economic scale expansion through continuous economic growth, income level increases and acceleration of employment, national systems, and the national defense budget for protection of the national system equitably.  

The matter is the setting up of a measurement standard to measure a reasonable level. For the paradigms in finding a reasonable level, the position of administration seeks efficiency of resource use but the mercenary’s position lays the stress on the retaliations possibilities when deterring or when deterrence fails. When we consider these two with the Korean security environment, it is possible that the opinions of radicals and conservatives can coexist when we seek a method to maximize the anti-North Korea deterrent effect within the national defense budget range or even to secure the minimum necessary national defense budget first of all for construction and maintenance of the deterrent power. However, it requires the extortion of different circumstantial recognition and the return to the question of optimization of the national defense

Firstly, we can acknowledge the attitude of the radicals. It is the view of the pacifist in the line with so called democratization, who consider the changed military conditions of the post-cold war age can applied to the Korean peninsular and underestimate the threat. It is easy to become involved in the aggressive strategy of North Korea receiving the concept of downsizing of armaments and reunification with simple ideal logic. Despite the downsizing competition of arms, unusual nuclear armaments curtailment and the trend of conversion of military cost into peace dividends between the U.S. and Russia, the possibilityof trust buildup is rare, as we could see in the default of the basic agreement between South and North Korea caused by the nuclear armament efforts of North Korea, and the falsehood of the nonproliferation joint declaration.  

Consequently, in resource allotment, Korea should not permit the risky attempt to prioritize and emphasize social welfare scarifying the national security. It shows that survival takes precedence overprosperity. South Korea, inferior in actual war power to North Korea, should seek the optimum level of military power in the case of a mercenary situation to secure self deterrence following withdrawal of American Forces in Korea. However, the procedure deciding the quality and quantity of given resources, should follow the direction in which structure and functions can maximize efficiency.

Secondly, we look at the view of conservatives. It is the claim of the people who insist the upon full expansion of defense costs for quantitative enlargement of the Korean army in an extension of cold war logic, keeping the military power balance between South and North Korea in mind. In particular, the high officials of military and realists persisting the view of overestimating the threat and comparing the war power just in quantity. Supporting the big holders prior curtailment logic sunders the premise of symmetrical quantitative curtailment and limits the space of the flexible downsizing of armaments strategy when considering the security environment of Korean Peninsular.  

Yet the cold war structure remains and survival is more in demand than prosperity, this conservative view seems to be safe. But, the possibility of sticking to a past dictatorship system, military priority and doctrine of efficiency remains, let these not harm the development of democracy. Consequently, we have to set again the optimum military power size as G.C.D. for Korean security, preconditioning the selfdeterrence with an inclination of asymmetrical reduction and balance, and have to cope with quantitative inferiority by qualities superiority.  

The optimization of the ‘national defense budget’ begins with the consumption estimation of military power. Consumption estimation is on the basis of the recognition of real potential threat. The recognition of threat is the result of judgment synthetically comparing, analyzing, and assessing the capacity, intention and weakness of both parties.  

It is difficult to accept the estimation proposed by the user, as the national resource is limited. So the requirements and usable resources must be compromised in the resource allotment. The position of the mercenary is to allot in equitably a national defense budget proper to strategic demands in the dimension of national security differently from other resource allotment. That goes with the view of the conservatives who lay first stress on necessity. Contrary tothis, the radicals who consider the budget as primarily shared their view with administration, stressing the efficiency increase, claim allotment of the national budget to social welfare first of all in a range of usable resources, then allot to the national defense budget in the principle of democracy. In fact, there is estrangement of value and fact, ideal and reality between the two, but they have their own legality and legitimacy.

It is not easy to determine the optimum level of investment, as the national defense budget has to prepare against not only the present danger to security but also that of the future. Because the adjustment about whether the present war power is enough to deter the imminent threat or not, and the clear assessment of the nature of the potential threat and war power it needs are the points of dispute.  

The reasons why the people’s interest in the national defense budget is increased are that the change of the security environment of the post-cold war age and that the budget is the biggest portion of the government budget as a sole item. There is a tendency to perceive the effects the national defense budget gives to the national economy negatively rather than positively. However, we need to perceive the national defense budget as the expansion reproduction costs that contribute to national economics and society development directly or indirectly.  

About 90 % of our national defense flows back to the national economy in the forms of logistics application, facility construction, and wages of soldiers. In addition, as technology development investment costs in logistics application costs through the defense industry has been expanded, the contribution of the national defense budget to the nation’s economics is now increasing. The Korean military produce more than 80,000 functioning personnel and 40,000 technology personnel annually.  

The reasonable size of the national defense budget is decided for the purpose of military power construction to react to the threat outside and the national defense budget demands for that. In wartime or quasi-wartime, every budget required to react to the opponent’s threat becomes the optimal size of the national defense budget. However, in the time when setting up the level of the defense budget to the potential threat, we should establish the level the national defense budget within alimit that does not hinder the economic growth of the nation by stage. Consequently, it is best to maintain the military power that can solely deter the will of North Korea to invade South Korea without the help of the American Forces in Korea although we must realize the welfare demand of people gradually while we continue to maximize economic growth, the most important resource of national power. The following are the summary of necessary factors that the Korean army must handle to accomplish its task.  

Firstly, the national defense budget that will secure defense sufficiency is needed. Despite the trend of downsizing of armaments and peaceful coexistence, North Korea adheres to armaments reinforcement and provocation despite its worsening economic condition. We presumed that North Korea uses 25% of the GNP as the military budget. When comparing the national defense budget of South and North Korea, we spent 2 times the total national defense budget amount, 1.25 times more in investment costs than North Korea in pertinent years, but the total sum of investment costs was presumed to be 82.3% of that of North Korea.








National defense budget


24. 6

38. 4

58. 1

67. 8

86. 3

111. 9

North Korea

28. 8

33. 2

40. 4

45. 5

46. 9

55. 4

Investment cost



11. 6

17. 2

19. 7

33. 0

36. 9

North Korea

15. 4

16. 1

19. 7

22. 1

22. 8

29. 4

Investment cost

Total sum



15. 7

77. 7

149. 7

262. 7

407. 9

North Korea

118. 2

150. 8

217. 2

300. 4

390. 4

495. 0

<Table 2-4-1> South and North Korean military cost comparison (Unit: 100 million dollars, 1990, absolute price)

In addition to that, North Korea maintains a superior military power to us as it can construct military power at a low cost. Because we have to guarantee the reasonable proficiency of the defense industry and purchase expensive weapons considering stability, precision and survival capacity, while North Korea can produce and apply a large amount arms with low investment cost for free land use and labor, favorable prices and technology transfer among past communist nations. For example, the Korean K-1 tank costs 2300 million won while North Korean T-62tank costs 1.500 million won, and the price of Korean F-16 reaches up to 4.3 million dollars while that of North Korean MIG-29 is 2,2 million dollars. In addition, we must furnish the middle-low altitude air defense network against rear line invasion by North Korean AN-2, and an enormous budget is required to react to the North Korean aggressive strategy cost.  

If North Korea abandons nuclear weapons development and South and North Korea agree to a down sizing balance to have military power in the same rate to 1% of their population (0.7 million÷2=0.35 million persons), Korea can reduce dramatically the current national defense budget, which comes up to 8,400 billion won, 3.7% of the GNP, 25.3% of the national budget.

Secondly, the estimation of replacement war power is required due to the roll change of American Forces in Korea. In Korean security, the U. S. Army changed its roll from the main body to the assistant. The definite war power replacement lists intelligence, telecommunication, up-to-date guided weapons and warfare stock capacity for which Korea is dependent upon the American Forces in Korea. To secure the replacement war power, the huge amount of 25.9 billion dollars including annual investment costs of 3.2 billion dollars and maintenance costs of 2 billion dollars is required. However, the budget requirement will be nearly doubled considering that the deflator of the Ministry was 10. 4% while the GNP deflator increase rate of the 1985-1990 period was an average 5.6% per annum. Although such a large budget is required, the demand for self-national defense induces investment in stages.



Major equipment

General equipment and logistics


Early warning

Maintenance cost








<Table 2-4-2> Required substituted war power fund for American Forces in Korea (Unit: 100 million dollars fixed price in 1988)

Thirdly, it needs to secure financial resources to fortify the independence base of the defense industry, the core of the national defense. The huge expense is required for expansion of the research and development capacity, retention of cutting edge military science and technology that is a reliable security asset and supporting for the defense industry. Now the local procurement cost of the weapons system is more expensive than the introduction cost, but the additional national defense budget investment is necessary to guarantee in-house weapons development and application capacity. The advanced countries are also increasing the research and development costs while they execute partial downsizing of armaments. Japan is also trying to develop the weapons independently even though the production unit price is high since it could not reach the economic scale, establishing ‘the embargo on the weapons’.

Fourthly, the finance resource demand for technology-intensive military structure is to occur. If the current trend of the advancement of military science and technology is to be continued, the imaginable aspects of the future war will be competition among advanced science weapons. Consequently, with only the traditional weapons system and force intensive military power, we cannot respond against the future war properly.  

It is also a huge expense to meet the cost of major weapons systems, the price for troops creation and maintenance for transfer into the technology-intensive military structure by forces. As it is difficult to allot great military cost now considering the present national defense budget level, we should keep the current military power-intensive military structure for some time and seek a way to change this steadily.

In consideration of the real condition of our military, it is needed to devote continuous national defense budget investment for quite a long time. The reasonable level of the national defense budget size to meet the present North Korean threat and prepare against a future warfare environment is presumed to be 3.5% of GNP.


Military warehouse equipment

Maintenance cost

Major weapon system price


Mechanized army division:

1 trillion 56o billion won

86.3 billion won

Korean tank:

2.3 billion won

Vehicle infantry army division:

730 billion won

45 billion won

Self-propelled howitzer:

0.96 billion won


1 submarine division:

915 billion won

12.7 billion won

Korean destroyer:

215 billion won


145 billion won


F-16 1 combat flight division:

2 trillion 150 billion won

Flight division: 71.4 billion won

Battalion: 6.1 billion won

F-16: 33.4 billion won

Middle-sized transport aircraft: 11.8 billion won

<Table 2-4-3> Troops creation cost and major weapon system price

In the time when the Korean army introduces a major updated weapons system, it simultaneously seeks the technology introduction for localization. These newly introduced technologies lead development of updated technology fields like aircraft, fleet, electronics as well as contributing to the national economy by supporting substitute industry.  

In addition to the above said factors, Korean military should exercise various functions including technology and job training for its members and the cultivation of national spirit and mind of democratic citizens, national protection and civil assistance in emergencies as only one group having crisis management capacity. And it also bears that as such; everything is backed by the national defense budget.

Consequently, we should decide on the size of a reasonable military cost by non- regulative decision making with the principle that seeks distribution of the national defense economy and national economy in the logics of cannon and butter or interaction of all variables and offset the effect on the base of compromise of mercenary operations. It is hoped to draw agreement from the understandings and acceptance of people, the taxpayer as well as policy decision maker.