The Republic of Korea (ROK) is a rising arms exporter with a unique position in the Indo-Pacific. As a country that has technically remained at war with North Korea, the ROK needs to manoeuvre between the US, its largest security and second biggest trading partner, and China, its largest trading partner and critical partner in the non-proliferation effort in the Korean Peninsula. On the other hand, the ROK is increasingly seen as a regional security partner for Southeast Asian countries. Recently, South Korea finally agreed to Indonesia’s request to scale down participation in KF-21 fighter collaboration. The agreement put an end to many episodes of renegotiation that had put the bilateral defence industry cooperation in jeopardy. This article will discuss South Korea in the eyes of Southeast Asian countries, the challenges to expanding its global arms export, and the strategic value of Indonesia for South Korea.
How Powerful is South Korea in the Indo-Pacific?
According to the Lowy Institute, the ROK is ranked 7th out of 26 countries in the Asia Power Index. The ROK falls under the category of middle power, together with Japan and Russia. In several categories, Seoul’s influence exceeds resources. In defence networks and diplomatic influence, for example, the ROK recorded high marks due to its strong alignment with the United States, defence cooperation with all members of ASEAN, and China and India. South Korea also punches above its weight in soft power. The ROK's creative economy exports bolster its influence in the region, although domestic security considerations remain a priority for the country. For example, members of the popular idol group BTS are not exempted from military service despite contributing greatly to the ROK's economy and diplomatic profile during the COVID-19 pandemic.
Unfortunately, when compared with other middle powers, the ROK is not yet seen as a major strategic partner in the region. According to a 2023 survey by ISEAS, among the six middle powers, namely Australia, the European Union, India, Japan, and the United Kingdom, the ROK is the last choice of partner to hedge against the uncertainty of the US-China strategic rivalry. The ROK is also ranked fifth, just a tad better than India, in displaying leadership in maintaining rules-based order and upholding international law. The ROK's low score seems to be influenced by the perception of the elite in ASEAN member countries that the country does not yet have strategic autonomy in its relations with the United States and the ROK's reluctance to engage further in security cooperation with ASEAN. Seoul has only started paying more attention to Southeast Asia since 2017 via the New Southern Policy, which then continued with the New Southern Policy Plus and Outlook on the Indo-Pacific. It committed support to the centrality of ASEAN, which was strengthened by the institutionalisation of the ASEAN and Southeast Asian Affairs Bureau in its foreign ministry and the expansion of the mission to ASEAN.
Arms Exports: South Korea’s Dilemmatic Achievements
A bigger role awaits the ROK. There is an expectation that the ROK can play a more significant role in helping Southeast Asia navigate the impact of US-China rivalry, especially after the issuance of the ROK’s Outlook on Indo-Pacific. Southeast Asia could use the ROK’s support in several areas. First, to uphold the ASEAN centrality within the strategic rivalry. Second, to improve the capacity of Southeast Asian countries, especially around maritime security, disaster management, and cyber security as well as peacekeeping.
Another area where the ROK can help Southeast Asia, especially Indonesia, is the transfer of military technology. Following the break of war in Europe and the Middle East as well as heightened tension in the Taiwan Straits and the South China Sea, demand for weapons increased across the globe. ROK is currently the world’s ninth-biggest arms supplier. From 2017 to 2024, South Korea’s top 10 arms importers include the Philippines, Indonesia, Thailand, and Vietnam. The Philippines is among two Southeast Asian countries (the other is Thailand) to boost military modernisation in the last five years, as a response to the heightening insecurity vis-à-vis China in the South China Sea.
South Korea increasingly emerged as a viable alternative partner for the supply of military hardware not just for Southeast Asia, but also to Europe, South America and the Middle East. Seoul scored an extraordinary sale valued at USD 22 billion to Poland- the largest arms sales deal in its history. The deal broke the record achieved earlier with UAE at USD 3.5 billion. The country reaped the fruits of its strong sales by placing four companies in SIPRI’s top 100 defence companies, namely Hanwha Aerospace, LIG Nex1, Korea Aerospace Industries, Hyundai Rotem. This means South Korean defence industry sales are higher than Israel, India or Italy.
Tabel 1. Top 10 Arms Importers of ROK’s Weapons (2017 - 2023)
Source: SIPRI, 2024
Indonesia Remains Vital for ROK
Despite its impressive track record in recent years, ROK’s arms exports face several challenges. First, as its arms export profile becomes global it inevitably touches conflict areas. While the ROK aims to avoid exporting weapons directly to conflict areas, it may do so through a third party. Nevertheless, the indirect arms transfer to conflict areas such as Ukraine could risk flaring up conflict back home. There are allegations that Russia entered cooperation with North Korea to exchange ammunition with the support of spy satellites and missile programs. The future direction of Korean arms exports might put a strain on its relationships with the US (if refuses to arm countries close to the West), Russia (if continues to arm Ukraine) as well as China (by arming the Philippines). Seoul needs to devise an arms export strategy that represents a middle power value rather than an economic driver.
Second, the ROK start to hit a technological gap in executing defence partnerships -whether through joint development or offset of military technology as in the case with Indonesia. Jakarta's discontent had been articulated through the cancellation of the procurement of the second batch of submarines from DSME and a delay in payment of the cost share in the KF-21 due in 2026. DSME reportedly suffered financial losses because it had already ordered components in 2019 before the contract was effective. Many feared that Jakarta would also back off from the commitment to purchase 48 fighter jets.
Failure to resolve the issue with Indonesia could impact financial losses, relations with the [Southeast Asian] region, and the credibility of the Korean aviation industry. Hence, the ROK’s decision to approve Indonesia’s request to reduce the cost share of fighter jet development from around 2 bn USD to 440mn USD needs to be applauded. Such acceptance would enable the ROK to move on and plan strategically to secure the first export market for KF-21 to Indonesia. The case should be a valuable lesson for both ROK and Indonesia on the challenges in defence industrial partnership.
Part of Foreign Policy and Public Diplomacy Division
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