A Study on the Promotion of Defense Export by Expansion of Defense Export Financing

Korea’s defense exports have been increasing rapidly since 2022. This is because Korean defense companies are the only countries that can meet the needs of importing countries in terms of quality and delivery date as global defense exports, mainly Poland, increase through the Russia-Ukraine war specially. Defense goods must be supported by export finance for the actual export contract to be executed along with the quality of the product. However, compared to the export scale that increased in a short period of time, the export financing cannot keep up with it, so export contracts are delayed, and the fundamental export finance problem that can solve this problem is an important factor. To solve the problem of insufficient export financing limits, the government is considering measures such as syndicated loan by commercial banks, increased capital by state-run banks and guarantee institutions, and commercial banks’ purchase of Polish government bonds, but all are evaluated as measures that are not easy to operate in the market. Therefore, in addition to the short-term government countermeasures, this paper proposed the establishment of an agency dedicated to defense finance, the introduction of exceptions to national limits, and the introduction of defense matching funds and defense ETFs to solve the fundamental export financing problem. Through these, it is hoped that Korea can become one of the four major global defense export countries by utilizing global environmental changes.