Rep. Kim Byung-joo of the Democratic Party of Korea and Rep. Yu Yong-won of the People Power Party agreed on the need to establish a dedicated fund for defense exports, saying that securing "financing competitiveness" is essential to expanding K-defense exports. They share the view that the existing export financing system has clear limitations amid a continuing stream of large-scale orders.
"For K-defense to keep growing, financing competitiveness must follow alongside weapons competitiveness," Kim stressed. He pointed out that "in 2022, Korea signed major first-round contracts with Poland for K2 tanks, K9 self-propelled howitzers, FA-50 light attack aircraft and Chunmoo multiple rocket launchers, but during the follow-up contract process, export financing limits acted as a stumbling block." His explanation is that the Export-Import Bank of Korea's lending caps for a single borrower and a single country affected the pace of second-round contracts.
Kim proposed that, given the defense industry's characteristic of large-scale contracts, a separate export-dedicated fund should be created. "Mega-contracts that the Export-Import Bank and the Korea Trade Insurance Corporation alone cannot handle could increase further going forward," he said. "Creating a public-private partnership fund or a special fund to provide support could resolve these problems."
Yu also concurred on the need to create an export-dedicated fund. He assessed that "the 2024 revision of the Export-Import Bank of Korea Act raised the statutory capital ceiling to 25 trillion won, but it was a stopgap measure that only put out the immediate fire." He added, "The Canadian submarine project reaches 60 trillion won in scale when maintenance, repair and overhaul (MRO) costs are included, and projects worth more than 10 trillion won are also waiting in the Middle East." He emphasized that "since the existing revision alone is difficult to handle, institutional supplementary measures are needed."
He also expressed an intention to work toward the passage of related bills already proposed in the National Assembly. "Public hearings and other procedures are also under way," Yu said. "We will actively cooperate and provide support."
