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National Defense Budget Standing
Analysis of Modern Weapon Systems
Defense sharing of the American forces in Korea
Presentation of issues

The Korean economy was ecstatic with the admiring comment ‘the miracle of the Han River’ an excessive assessment of Korea by the leader of NICS as one of the ‘four dragons of Asia’. Therefore, having not established its own status and not being stable, it is painful that its economy hits a critical phase as the international economic environment is aggravated and its people devoted to their shares.  

To make matters worse, Korea can’t help but maintain the present military power of a minimum of 655 thousand as it should compete with North Korea’s one million strong army in as far as the high density of military power is concentrated on the cease-fire line. In 1990, the astronomical national defense budget of 6694.5 billion won was disbursed. It is 4.5% of GNP and over 29% of the national budget. However, though the national defense budget increased 11.3% in comparison with the past in 1991, the problem is that the increase was allotted to the management and maintenance costs. Therefore, the national defense authorities received criticism and advice that it should accelerate the new ongoing project of investment in towar power reinforcement so as to escalate the weapons system and at the same time to dispose of the subsequent conventional nature, and to control and fatten up the administration budget by breaking from the inflexibility of the budget system and introducing and establishing a result-principle budget system or ZBC.  

Consequently, at the current time, to solve the defense sharing problem with the U.S. and the withdrawal problem of American forces in Korea wisely the national security task is directly connected with strengthening the Korean economy and military power. The pending problem should be deducted and the countermeasure be grasped by approaching the defense sharing problem in respect of the economic, strategic, and technological value shared and role in the situation of value sharing, or international military division except for the simple cost sharing between both nations.

Concept of defense sharing

The defense sharing means the mutual allocated share among the nations involved foreign affairs, personnel, logistics, and economic costs of maintaining the military and security co-operations and allied relations. It may be analyzed within a limited range like the military costs, stationed forces budget support, and united defense costs. However, it is understood within the concept of the security assistance in the U.S. as various assistances for the protection of human rights, and the maintenance and development of a free democratic system.  

The defense sharing means sharing the responsibilities and roles that each nation’s organization was granted in regard to maintaining the mutual complementary security assistance and cooperation relations. The nation’s organizations distribute and share all the necessities equally in maintaining and managing the defense system of a group or bilateral alliance system. The factors deciding the level of defense sharing depends on the nature and operation of threat followed by the result of the capacity assessment, intention, and weakness of the invader (under the proposition to chastise the disturbance persons, commonly according to the group security concept in the basic spirit of the UN charter).  

The change of position and share that the U.S. occupied in international politics and world economy may be the variable of the defense sharing in the free world. The U.S. had maintained the position of the super powerful country to keep the just and great cause of Pax Americana, and lead the free world from the Korean War to the Vietnam War, but the American international prestige was injured by reducing and adjusting the world strategy from the 2.5 strategy to 1.5 strategy after going through the bitterness of the Vietnamese War.  

The U.S., whose economic occupancy was 50% after the war now occupies only 25%. Moreover, when the twin deficit is aggravated and it degrades the debited nation to the creditor nation, it is required to maintain a greater amount of the defense share. As a result, the defense sharing of the nation may be changed according to the recognition of the economic and political conditions and the proposed threat.

The defense sharing is based on the principle that no charge for security is permitted as the assurance of national security should be enjoyed together in respect of sharing the cost and sacrifice required for the common fate on the assumption of the common defense. However, it is not easy to assess the cost and benefit correctly. In particular, it is difficult to calculate the cost sharing and security benefit exactly in the cooperation relations among nations with intensely different national powers. Nonetheless, the mutual maximum satisfaction level should be pursued in deciding the shared responsibility considering the profit degree of the national security and economic sharing capacity.  

Therefore, the method to decide the amount shared on the basis of the prosperity index that NATO applies as the most basic sharing principle has been adopted. The prosperity index is considered along with total GNP of all allies and the GNP per person of involved countries.  

The nations with the GNP for the whole nation and GNP per person should accept greater defense sharing responsibility. However, in fact, the principle is not necessarily upheld in the political negotiation process and either the U.S. or the weak nations take charge more relatively.  

The defense sharing of NATO, Japan, and Korea is compared in <Table 2-3-1>.

Economic share

The station grounds of the American forces in Korea and legal grounds for the assignment of the Korean defense budget are based on SOFA under Article 4, of the Korea-America Mutual Defense Treaty. The Korea-America Mutual Defense Treaty was concluded on October 1, 1953. It was implemented on November 17, 1954 and it is presented that ‘Korea should permit the right to arrangethe American army, navy, and air force in Korean territory and the neighboring area and the U.S. should accept this according to the decision by the mutual agreement’ in Article 4, of the Korea-America Mutual Defense Treaty.

.

National

Sharing index in proportion to GNP

Sharing index in proportion to prosperity index

Present off- shore population occupancy (%)

NATO civil budget (%)

NATO military cost occupancy (%)

U. S. A.

1. 47

1. 16

1. 28

23. 2

30. 1

Former West Germany

0. 68

0. 85

1. 00

15. 5

11. 4

France

0. 86

1. 19

1. 16

16. 5

 

England

1. 10

0. 75

1. 38

18. 8

21. 9

Italy

0. 58

1. 16

0. 94

5. 7

7. 3

Spain

0. 61

1. 77

1. 23

1. 6

 

Canada

0. 47

0. 44

0. 44

5. 6

6. 9

Netherlands

0. 66

0. 97

0. 82

2. 7

3. 5

Belgium

0. 65

1. 03

1. 05

2. 7

 

Denmark

0. 46

0. 51

0. 69

1. 6

2. 1

Norway

0. 70

0. 66

1. 03

1. 1

1. 4

Turkey

0. 95

12. 4

1. 58

3. 5

1. 9

Greece

1. 52

6. 1

2. 15

0. 3

0. 5

Portugal

0. 67

4. 3

1. 03

0. 6

0. 7

Luxembourg

0. 23

0. 33

0. 35

0. 1

0. 1

Japan

0. 21

0. 24

0. 20

 

 

Korea

1. 14

7. 0

1. 4

 

 

 <Table 2-3-1> Major nation’s defense sharing index (Source: Ministry of Defense, defense budget sharing, 1988)

The goal of SOFA concluded between both nations on July 9, 1966 is to guarantee the social rank and standing of the American forces in Korea, military civilian officers, and their families and prescribe the application range of Korean laws. The main areas of the agreement include the management of departure and entrance, all the legal matters presented during that period, their (the American forces in Korea, military civilian officers, and their families) departure after entrance, return costs, maintenance of the facility and area, stopover of ships and planes, taxation and taxation immunity, labor support, and claims for compensation.  

The American forces in Korea that have stationed the division or troops over division level up until now since 1945 (excluding the blank period of one year just before the Korean War) took charge of the necessary budget for themselve sand Korea provided the facility, land, and services until 1974.  

However, the U.S. started to press for shared costs for the common defense, with partial withdrawal of the American forces in Korea at the same time to stop the economic assistance and reduce the grant-type aid in the mid 1970s. In other words, the U.S. presented this matter on not only storage and management of WRSA, but also the storage of the ammunition for the U.S. army, and required common investment for the united defense facilities through the Combined Defense projects from 1974.  

Therefore, Korea began to take charge of the operations budget of the combined military support group (JUSMAG- K) from 1976 and took charge of the partial operation costs of CFC from 1983. Then the U.S. stopped the foreign military sales (FMS) loan for Korea and requested the securing of cost sharing. This meant it required the conclusion of the agreement for the maintenance costs of CFA, support and maintenance costs of the united telecommunications, and war stationary nation support (WHNS) in the late 1980s.  

Korea began to genuinely bear the defense budget in 1974. For the following 5 years until 1978, Korea contributed to the supporting facility to the amount of 15 million dollars for the American navy and air force through the common investment project, in the name of the combined defensive power reinforcement of Korea and the U.S. on the basis of SOFA.

Then Korea contributed 354 million dollars for 11 projects including the defense system automation for 3 years from 1979 to 1982 and 178 million dollars for a further 14 projects including an attack chopper battalion and lenses artillery unit since 1983.

Cost resource

Lists

Indirect tax

Direct tax

Real property assistance

Land, facility provided

1,190

172

Type of personnel

KATUSA

Labor division, warning support, personnel

350. 3

2. 4

Application maintenance cost

Assistance

U.S. military assistance division budget (united budget, CFA support, training space, etc.)

 

3. 2

CDIP project

Navy, air force facility, etc 14 projects execution

Lance battery facility, etc 14 projects execution

 

34. 2

Munitions assistance

Ammunition storage management and oil assistance service cost

212. 0

65. 4

Korean army

Facility provided

Training space, rifle range and aircraft customs tax assistance

16. 1

-

Exemption

Customs tax, toll tax, postal and public levies discount

174. 2

-

Sub total

1,942. 6

277. 2

Total

22,195

<Table 2-3-2> American Forces in Korea assistance standing (1988) (Unit: 1000 dollars) (Source: National defense white paper in 1989)

However, it is described that Korea had shared about 22,110 million dollars annually as per <Table 2- 3- 2> in the American viewpoint. However, the U.S. insists that the actual paid amount is only 270 million dollars excluding the indirect support including the supply of land, facilities, KATUSA, and workers, and the tax favors and that its half of the amount is restored to the Korean economy as the on-the-spot logistics service procurement cost.

Nation

U. S. A. Military power

(Soldier)

Size of assistance

(1 million dollars)

Assistance per soldier of U. S. Army

(Dollar)

Military cost in proportion to GNP

Korea

41,000

1,906

45,170

4. 7%

Japan

45,700

2,117

43,030

1%

Former West Germany

250,000

5,000-6,000

20,000-24,000

3%

<Table 2-3-3> Major stationing countries’ assistance to U. S. Army (Source: O. K. C: Some thought on ROK. U. S. Alliance and sharing in 1987)

However, Korea has too greater charge for the support of the American forces in Korea considering the economic power of the advanced nations like the former West Germany and Japan. Moreover, the U. S. asserts that Korea has double the population and seven times GNP of North Korea and that the Korean trade surplus toward the U.S. reached about 10 billion dollars in 1988, and consequently, Korea increases the defense sharing by disbursing the national defense budget over 6% of the GNP equivalent to the same level as the U.S.  

In fact, Korea had taken charge of the enormous national defense budget equivalent to 5.1% of the GNP and an average of 32.3% of the national budget over the 15 years from 1975 to 1989, and it is this amount that can’t bear comparison with the national defense budget of NATO nations that corresponds to an average of 3.3% of the GNP and 1% for Japan.