South Korea Defence and Security Report 2015
BMI View: We expect South Korea's defence budget to continue increasing in absolute terms in the nextfive years. This will be driven by South Korea's need to maintain well-prepared and well-equipped armedforces to deter, or defend from, an attack from North Korea. Moreover, the 2014 Defence White Paper putssignificant emphasis on the government's desire to continue expanding the domestic defence market,providing additional support to private companies seeking to participate and increasing exports worldwide.
This will contribute to opening up development opportunities for both international and national companiesoperating in the defence sector.
The conflict that has been characterising South Korea's relationship with North Korea in the past sixty yearsremains to date the country's main driver for defence spending. Indeed, despite many attempts from Seoul toconvince Pyongyang to establish a dialogue and resolve the situation peacefully, the latter has continued tocarry out nuclear tests and regularly threatens to attack the former. As such, South Korea is constantlyworking to maintain and upgrading the equipment and capabilities of its armed forces in order to beprepared for an eventual attack or even as a simple deterrent. Significantly supported by the US, which has29,300 troops on the territory and supplies a significant share of the country's equipment, South Koreamaintains its advantage over its northern neighbour, but a new strategy is necessary if the situation does notdrastically change in the near future - that is, if North Korea does not collapses.
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