Weak currency threatens delay in defense acquisition: lawmaker

By Byun Duk-kun
SEOUL, Oct. 10 (Yonhap) -- South Korea may be forced to postpone some of its
major defense procurement projects due to recent drops in the local currency, a
legislator said Friday.

The falls in the value of won are already expected to incur at least 226 billion
won (US$161 million) in added purchase cost this year.
Rep. Kim Ok-lee of the ruling Grand National Party said the country would have to
pay an additional 226 billion won this year for weapons purchased overseas if the
South Korean won drops to 1,300 against the U.S. dollar.
The won was trading at 1,440 as of 9 a.m. Friday. The local currency fell as low
as 1,485.55 during Thursday's session, the weakest in over 10 years.
"Such a problem is not limited only to overseas procurement projects by the
Defense Acquisition Program Administration. If the won drops any further, I
believe there will be no choice but to consider putting off the timing of
introducing new weapons systems," Kim, a member of the National Assembly Defense
Committee, said in a statement.
The parliamentary committee has been conducting an annual inspection of the
Defense Ministry and its related offices, which include the office of the Joint
Chiefs and the headquarters of all three armed services, as well as the defense
procurement office. The inspection began Monday and will end Oct. 23.
South Korea has already spent over 90 percent of some 1.54 trillion won earmarked
for overseas weapons purchases this year as of the end of September, according to
Kim.
Ongoing or additional projects require the country to spend at least 600 billion
won more during the remainder of the year if the South Korean won remains at
1,300 to the U.S. greenback, she said.