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Rise of the Defense Industry in the 1970s :
Building the Foundation for Independent National Defense


1. Prologue

August 1945.
The deadliest war in human history came to an end with the victory for the Allied Forces led by the United States and the Soviet Union.
But the end of World War II gave rise to the Cold War, dividing the world into two opposing forces - the US-led Capitalist bloc and the USSR-led Communist bloc. The shadow of the Cold War was also cast over the liberated Korean Peninsula.
The U.S. and USSR each occupied South and North Korea after designating latitude 38 north as a temporary demarcation line immediately before the end of war.
The two superpowers agreed at the Moscow Conference to have four countries participate in a trusteeship over Korea, a decision that eventually resulted in Korea’s division.

So the Korean Peninsula was split between two countries run under two totally disparate systems.
In 1949, as the Communist Party took control of China and its sphere of influence spread throughout Northeast Asia, North Korea, supported by the Soviet Union and Communist China, started the Korean war.
The U.S. helped defend South Korea by forming UN forces comprised of 60 countries, prompting China and USSR to get involved in the war against the UN forces.
The Korean War wasn’t simply a conflict between South and North Korea.
It was a proxy war fought on the Korean Peninsula by the opposing sides of the Cold War.

The three-year war was concluded with a cease-fire agreement, but it left South and North Korea in the state of constant military confrontation at the forefront of the Cold War.
Then how did the Republic of Korea respond to ensure its national security?


2. The Development background of the Defense Industry: Hot War in the Détente.

The war was devastating, leaving behind ravaged land and despondent people. Both South and North Korea had to rise up from the ashes of war and move forward.
But the two Koreas responded differently to the ruinous effects of the worldwide Cold War and the Korean War.

North Korea’s post-war reconstruction strategy focused on rebuilding heavy industries. But the real objective was to beef up its military strength to put South Korean under Communist control.
In 1962 North Korea adopted four major military policies, which included arming of all people and fortification of all territory, and later in the decade North Korea even initiated armed provocations against South Korea.
Moreover, the military setbacks suffered by the U.S. in Vietnam emboldened Pyongyang.

PARK Jong-chul/ Senior Research Fellow, Korea Institute for National Unification
Q. Increase in North Korea’s military provocations against South Korea and the Vietnam War
As the U.S. got more mired in the Vietnam War, North Korea believed that if another war erupted on the Korean Peninsula, it would be hard for the U.S. to fight simultaneously in Vietnam and the Korean Peninsula, prompting the North to step up their armed provocations against the South at the end of 1960s

January 21st, 1968.
A quiet Sunday morning in Seoul was shattered when 31 armed North Korean commandos launched a frightful assault. Bullets flew and grenades blew up near Jahamun Gate in central Seoul.
Just two days later, on January 23rd, American intelligence ship USS Pueblo was captured by the North Korean Navy.
In November of the same year 120 North Korean armed spies infiltrated the Uljin and Samcheok areas with an aim to build a base for North Korean guerilla units there.
The number of North Korean provocations, which had stood at 468 in the 1950s, spiked to 1,338 in the 1960s. The fear of war was gripping the Korean Peninsula once again.

Then, how was the post-war situation in South Korea?
During the war Seoul was actually against a cease-fire. It wanted to keep fighting until the end in order to bring closure to the issue of division.
However, troubled by the possibility of a drawn-out war, the U.S. forged ahead with cease-fire talks. At the end South Korean government accepted the armistice agreement, but with a condition.
The condition was the conclusion of the Mutual Defense Treaty between South Korea and the United States, the minimum safety guarantee against another invasion by North Korean forces.
A short while later, the two countries agreed to have American forces stay in South Korea to work together in defending the country. The Korean military’s operational command authority, which was handed over to the UN command during the early months of the Korean War, remained with the U.N.
With such safety nets in place, South Korea poured all its efforts and resources into post-war restoration and economic development.
The Syngman Rhee government restored the war-ravaged industrial facilities with foreign aids and fostered the consumer goods industry to boost the supply of household necessities.
Following President Rhee was former general Park Chung-hee, who had seized power through a military coup on May 16th, 1961 and pledged to compete with North Korea on the economic front.
Starting with the first round of 5-year economic development plan in 1962, the Park government devised economic plans every five years to spur on economic development. As a result, the Korean economy grew at an amazing annual rate of nearly 10% in the 1960s.
Obviously, such stellar outcomes were made possible by military aids and security assistance from the United States.
But an incident occurred in 1969 that put a brake on Korea’s rapid growth.
Washington’s policy on Asia changed dramatically. The US urged through the Nixon Doctrine that each Asian nation should be responsible for its own security.

PARK Jong-chul/ Senior Research Fellow, Korea Institute for National Unification
Q. Background of the Nixon Doctrine, changes in America’s global strategy and the international security environment in the late 1960s since the announcement of the Nixon Doctrine.
When Nixon was elected president the biggest issue for the U.S. was how to end the Vietnam War. The war was tearing the country apart and putting a great fiscal burden on the U.S. So Nixon’s campaign pledge was to withdraw troops from Vietnam.

President Nixon’s historic visit to Communist China in 1972 led to the improvement of diplomatic ties between the two countries. It was followed by a strategic arms reduction treaty between the US and USSR in May of that year. The world, especially Northeast Asia, was transitioning from the Cold War era to the era of détente.
But the situation was different on the Korean Peninsula. North and South Korea were locked in a fierce ideological conflict and tension was rising in the region caused by North Korea’s provocations against South Korea, putting regional security at risk.
Then the US, in accordance with the Nixon Doctrine, officially notified in July 1970 of its intention to withdraw one of its two Army divisions stationed in Korea.
The unilateral withdrawal of U.S. forces dealt a huge shock to Korea, because South Korea had relied mostly on the American forces stationed in Korea for its national security. The combat capability of the South Korean military at the time was negligible.
First established as the South Korean Constabulary of Police Reserve under the U.S. Military Government in Korea in 1946, the Republic of Korea armed forces came into being at the same time as the founding of the Republic of Korea. South Korea’s military force increased greatly during the Korean War, but most of the military supplies, except for food, were subsidized by the U.S. military. This continued until the early 1970s.
But that doesn’t mean that South Korea made no attempts to establish an independent defense system.
To brace against North Korea’s guerilla wars and rear infiltrations, the South Korean government proclaimed the Establishment Act on Regional Reserve Forces on December 27th, 1961 and formed the Joint Chiefs of Staff following the revision of the Armed Forces Organization Act in 1963.
Although South Korea attempted to modernize its military equipment with American assistance as the country entered the Vietnam War, South Korea was still incapable of manufacturing weapons and military equipment on its own.
Sharply increasing North Korean provocations, changes in the global security environment, and the withdrawal of U.S. armed forces in Korea.
Faced with the greatest national security crisis, the South Korean government realized the need for independent defense capability. The time has come for South Korea to address its security concerns as well as its economic ones.


3. Establishment of Foundation for the Defense Industry: mastered the technology of making weapons

South Korea founded local reserve forces to counter North Korean provocations and started stressing the buildup of independent defense capacity.
However, a self-reliant defense system seemed a far-fetched dream since there was hardly enough weapons to arm local reserve forces and it was practically impossible to modernize military equipment without American help.
Today the concept of “autonomous defense” contains multiple meanings, including the return of operational command authority, but in the late 1960s the idea meant locally producing as many weapons as we possibly could to arm our military.
Therefore, independent defense was identical in concept with the construction of weapons manufacturing plants and ultimately the building of the defense industry.

The goals of autonomous national defense is to first supply basic firearms to regional reserve forces and then manufacture and supply weapons and ammunitions for regular forces.
The plan to build four key manufacturing plants established in July 1970 was the government’s first attempt to nurture the country’s defense industry.
South Korea intended to import foreign capital and technology to build the foundation for its defense sector.
Meanwhile, the government founded the Agency for Defense Development in August 1970 to work on weapons manufacturing technology. The ADD was commissioned to “carry out the tasks associated with research, and test of weapons, equipment, and other supplies essential to executing military duties.”
However, a lack of technology, manpower, and capital to produce weapons locally and the failure to import foreign investment and technology forced the government to scrap the factory construction plan and limited ADD activities.

KOO Sang-hoi/ Former VP of ADD
Q. Why ADD activities were limited prior to the Lightning Project
There was no building, no research facility, nothing at ADD. And there was no weapons development expert in Korea.

Nonetheless, the government’s resolve to gain independent defense capability was firm. Another plan was needed to build the foundation of the defense industry.
An alternative came from then-Assistant Deputy Minister of Commerce and Industry Oh Won-chol on November 10th, 1971.

All weapons are made of parts and Korea can make parts. Existing civilian factories can make parts by boosting the degree of precision and the ADD can test them.

Instead of spending a huge amount of money to setting up a specialized defense company from grounds up, existing civilian factories can be commissioned to make parts and the ADD can produce prototypes. That proposal was accepted immediately.
The Office of Senior Secretary to the President for Economic Policy II in charge of the defense industry was newly established and Oh Won-chol was named to head it on November 11th.
On that same day the ADD was ordered by the President to immediately start developing weapons, such as carbine rifles and M1 Garands, and bring the first batch of prototypes before the year’s end. It was a project that had to be done practically overnight. That was the start of the so-called “Lightning Project.”
About 10 of the brightest Korean scientists, including Shin Eung-kyun, Yun Eung-ryeol, Han Pil-soon, and Kim Sung-jin, were chosen to supervise each part.
The deadline for the first batch of prototypes was the end of December and the budget was 9.7 million won. But nobody had any knowledge about weapons development and even the United States refused to provide technological assistance.

SEO Jeong-uk/ Former President of ADD (In charge of communication device development)
Q. What did the Lightning Project members thought about the mission?
Why were we ordered to do something that seemed impossible? We were nearly in despair at first. Older members said this was not something that can be done just by trying, but we answered, “No, if we keep trying, we can achieve at least something. Although we wouldn’t succeed in every project, we might as well start something.”

The project started by taking apart old American weapons to measure and copy each component and then work backward to draw an assembly blueprint. With the reverse blueprint in hand, the scientists worked around the clock to develop weapons.
As a result of their hard work, the prototypes were completed earlier than planned, on December 16th. But the urgently produced prototypes made without sufficient materials or machinery had their flaws.

KOO Sang-hoi/ Former VP of ADD (In charge of the Lightning Project)
The prototypes were put to the test. The bazooka, ammunitions, and anti-tank mine passed without a problem, but the barrels of the rifles, automatic rifles, and light machine guns exploded when fired. That’s because they were not made with standard military materials and their processing or precision quality was extremely poor. They were weapons in appearance only.

Despite the setbacks, the scientists refused to give up. While rectifying the mistakes, they added more items to the development list and launched the second and third phases of the Lightning Project.
Over the three phases of the Lightning Project the list was expanded to include not only basic arms, but also communication devices and personal firearms. Korea finally became capable of making the prototypes of major weapons and military equipment. Also, weapons were customized for Korean soldiers, who had in general smaller body frames than Americans.
Spurred on by the government’s unwavering determination and scientists’ tenacity and tireless efforts, the seemingly impossible weapons development program at last paved the way for the development and production of weapons made in Korea.

Meanwhile, encouraged by the successful production of local prototypes, the government upgraded the goals of its weapons development program.
In April 1972, when the third phase of the Lightning Project was about to start, a secret order arrived at the ADD - “Develope 200-km range ground-to-ground missiles by 1975.” That was the start of the so-called “Polar Bear Project.”
Guided missiles, an encapsulation of all advanced technology, was a weapon that changed the nature of war itself. Only the US, USSR, Germany and three other nations in the world succeeded in developing ballistic missiles. Korea, of course, didn’t have a ballistic missile expert, research lab or production facility.
The US was strongly opposed to South Korea’s missile development itself, concerned over a shrinking sphere of American influence and another war with North Korea. Even within South Korea, the plan was met with opposition as people complained about the plan causing conflict with the U.S.
So the government’s guided missile development program was carried out in secret.
Engineers and scientists got together at a secret place to study everything associated with missiles. It took them more than two years just to identify the cost and technological requirements for missile development and plan out a development program.
Fortunately, they were given a chance to visit the U.S. Army missile research center and a missile development plan was at last approved on May 14, 1974.
Guided missile lab and test site were built in Daejeon and Anheung. Young scientists worked day and night to make the advanced American missile technology their own.
The Polar Bear missile’s first test was carried out in April of 1978, four years after the development program began. Everyone was holding their breath as they stared into the screen showing the projectile.

PARK Jun-bok/ Former project leader at ADD (In charge of the Polar Bear Project)
The missile followed the projected path exactly, but then around 2/3 of the way the signal suddenly disappeared from the screen. The missile had just vanished. We couldn’t track the signal any longer, because there was none.

The second test ended in failure as well. Then in the third test held on June 3rd the guided missile hit the mark.
The success was priceless as it came after repeated failures. Three months later, on September 26th, 1978, the Korean-made guided missile Polar Bear was finally unveiled to the public.
It was the beginning of the era of missiles in Korea.

KOO Sang-hoi/ Former VP of ADD (In charge of the Lightning Project)
Q. The significance of the successful Polar Bear missile development
The key to modern weaponry is guided missiles. The success of the Polar Bear Project is meaningful in that we succeeded in developing missiles and building research and production facilities on our own and building the foundation of the defense system capable of making precision weapons. Through the accumulation of technology, we became capable of providing whatever fighting power demanded by the military and building a framework for genuinely independent national defense.

High-precision technology gained by the ADD in the 1970s was transferred to private companies and research centers, greatly contributing to the growth of Korea’s industrial technology.


4. The Development of the Defense Industry in Korea

So Korea succeeded in developing locally made weapons, but making prototypes by studying weapons manufacturing technology and actually building a defense industry were two totally different problems.
In order to build a defense industry, a country needed factories capable of mass-producing weapons, manpower and money to operate them, and a steady demand for weapons.
At the time when Korea had to simultaneously strive for both economic growth and national security, so the nation had to use its limited human and capital resources effectively. The government, therefore, decided to recruit civilian companies like in the first phase of the Lightning Project.
On February 21st, 1972 the basic guidelines for arms production were announced at the 1st Defense Industry Promotion Meeting.
The guidelines included that arms production be promoted in tandem with peacetime industries, specialized civilian manufacturers should be designated as defense contractors so that parts production can be taken up by defense contractors and assembly by the military engineering corps.
A series of successes in weapons development resulted in a set of utilization plans for civilian factories. Now the government began to expand the scope of weapons development.
In April 1972, immediately after the successful 2nd Lightning Project preview, the government ordered the development of weapons needed to arm troops in active service.
But this wasn’t an issue that could be solved simply by designating a civilian factory as a defense company.
It was possible only if a sufficient and stable arms production system was in place.
In order to promote the defense industry, the heavy chemical sector needed to be expanded first.

Economic reasons also drove the promotion of the heavy chemical sector. Opting to put priority on economic growth, the government again designed 5-year economic development plans in the 1970s to boost the nation’s economic growth rate and improve people’s standards of living.
However, worker wages climbed up sharply since the late 1960s and the thawing U.S.-Sino relationship steered Communist China into the global market.
Korea needed a new breakthrough to maintain steady growth under these circumstances.
The breakthrough needed to reach the goals of 10 billion dollars in export and 1,000 dollars in per capita income by the early 1980s was found in the promotion of heavy chemical industry.
Actually, the plan to foster the heavy chemical sector was already in the pipeline since early 1972.
But it was only in 1973 that the plan was made public and the government declared its intention to foster the heavy chemical industry.
A steering committee was established in May 1973 and a heavy chemical industry promotion plan involving six areas was announced.
It was killing two birds with one stone as the promotion of heavy chemicals achieved both economic growth and defense industry development, giving rise to a unique defense industry structure found only in Korea.

Korea took its first step toward independent national defense by building an unprecedented defense industry. But the country first had to tackle the problem of calculating what kind of weapons and how many of them were needed.
The current status of military strength and future reorganization method needed to be identified first. That is, the Korean military needed to set up military strategies.
On April 19th, 1973 the President received a report on the command chain and military strategy written by then-Director of Joint Chiefs of Staff Lee Byeong-hyeong.
When Korea had no independent military strategy to speak of, Lee’s report described where the Korean military strength stood and how to reorganize the military in phases. It marked a major turning point in Korean national defense history.

LIM Dong-won/ Former Minister of Unification, then-chief of Strategy Planning Bureau
Q. Background of “Command Chain and Military Strategy”
General Lee Byeong-hyeong was an exceptional military strategist equipped with a clear insight and vision and the right judgment. Other men had no interest in strategies at the time, but he believed that the Korean military would have no future for without a long-term plan and a system for independent national defense, which prompted him to write a report for the president.

The government immediately ordered to design independent military strategies and a plan to build up combat capability.
The Joint Chiefs of Staff led the effort to set up basic military strategies and issued guidelines for the military equipment modernization plans to each branch of the military. The plans devised by each military branch were collected by the Joint Chiefs of Staff and the 8-year national defense program was completed.
This plan was put to a vote at the Joint Chiefs of Staff in January 1974 and was finally approved on February 25th. The so-called Yulgok Plan was at last launched to boost Korea’s military might, carrying on the vision of Yulgok Yi I’s combat readiness.
The Yulgok Plan involved all the weapons and equipment capable of being produced in Korea as well as those that must be imported from abroad.
The weapons that could be made locally were manufactured and supplied by the Korean defense companies.
In July 1975 Korea started imposing a new defense tax to purchase the weapons made in Korea.
Weapons development by Korean defense companies was propelled to the next level.
On June 23rd, 1977 the largest Korean-made artillery demonstration in Korean military history was held at an army base in the central front line. An array of locally made weapons, from rifles, the Vulcan cannon, and 155-millimeter artillery to tanks and 500MD helicopters, was proudly displayed.
It was the actualization of the Koreans’ determination to make their own weapons.
A new era of independent national defense was opening up.
However, side effects occurred from the policies favoring the heavy chemical and defense sectors.
As government subsidies went mostly toward large conglomerates, concerns mounted over excessive investment and resources were wasted when giant corporations made redundant or unnecessary investments.


5. Epilogue

The Korean Peninsula, a strategic point that links the sea and the continent.
This geopolitical location again put the Korean Peninsula at the forefront of the Cold War.
In the late 1960s and the 1970s, while the global security environment was shifting toward reconciliation, North Korea instead intensified its provocations, putting South Korea’s security at peril. A self-reliant defense system and the buildup of the defense industry was the best way to protect South Korea and its people.
But it was nearly impossible to actually put those plans into action, as South Korea could not give up on economic growth and had no resources to make its own weapons.
Under the government’s unwavering determination and leadership, however, South Korea learned how to make weapons and foster its heavy chemical and defense industries. At last South Korea succeeded in developing and manufacturing weapons on its own.

LIM Dong-won/ Former Minister of Unification, then-chief of Strategy Planning Bureau
Key fire power and mobility for ground forces were ensured from this point in time. By the late 1980s most of the military equipment were produced in Korea.

SEO Jeong-uk/ Former ADD President
Although we were dedicated to national security, our actions resulted in raising the living standards of Koreans. Development of quality military supplies led to more jobs, more exports, and greater international reputation for Korea.

PARK Jong-chul/ Senior Research Fellow, Korea Institute for National Unification
There were positive aspects, but the speedy, state-led projects resulted in the collusion between politicians and businessmen and putting heavy burden on the country with excessive and redundant investments.

The Korean defense industry started out by disassembling American weapons and putting them back together. Nonetheless, South Korea, determined to defend the nation unaided, was able to build the foundation for self-reliant national defense by the late 1970s.