South Korea’s defense procurement agency, Defense Acquisition Program Administration (DAPA), announced last week that an unknown number of Indonesian engineers are under investigation for allegedly attempting to steal technologies related to the KF-21 fighter jet. This incident raises critical concerns about the security of South Korea’s military technologies, as well as the stability of its diplomatic relations with Indonesia, a key defense and trade partner.

The KF-21 Boramae project is central to South Korea’s strategy to upgrade its air force capabilities, aiming to replace its aging F-4 and F-5 jets with advanced, domestically-produced 4.5-generation fighters.

The program, a joint venture with Indonesia, is pivotal due to its military significance and is a symbol of international defense cooperation. However, the recent security breach and ensuing investigation have introduced uncertainties in this bilateral partnership, with implications that extend beyond immediate project concerns.

Korea Aerospace Industries rolls out the KF-21 Boramae at its manufacturing facility in Sacheon, South Gyeongsang Province, April 21, 2021 | Image: Korea Aerospace Industries

LOOSE LIPS SINK SHIPS

South Korea’s defense sector faces growing concerns over information security. The allegations of technology theft around the KF-21 fighter jet project have raised serious questions about the country’s ability to maintain the integrity of sensitive military information.

This incident, which saw the suspected transfer of classified data onto USB devices, is not an isolated case but a part of a worrying pattern of intelligence leaks within South Korea’s defense sector.

In 2020, dozens of former employees of South Korea’s Agency for Defense Development (ADD) — the South Korean national agency for research and development in defense technology — allegedly leaked tens of thousands of documents on unmanned systems such as drones, future warfare technologies, artificial intelligence-related source codes and design secrets onto large-capacity portable storage devices.

Two of those former ADD researchers reportedly fled to the United Arab Emirates.

More recently, South Korean police charged two South Korean nationals in January for industrial espionage work for marine consultancy firm SI Innotec, which was fined by a Korean court last year for exporting military-grade submarine equipment to CSBC Corporation — a Taiwanese state-owned shipbuilder — without DAPA’s approval.

Days later, a South Korean appeals court threw out the conviction, stating that there was insufficient evidence to consider the equipment to be military goods that required export approval from the government.

These precedents raise concerns about systemic issues in South Korea’s handling of classified information and the effectiveness of existing security measures. Each leak represents a direct threat to specific defense projects and erodes confidence in Seoul’s ability to safeguard sensitive technologies.

The broader implications of these leaks for South Korea’s defense security are significant. Information security is fundamental to the success of current and future defense projects, including the KF-21 program.

The potential impact of these leaks extends beyond immediate operational setbacks — they could jeopardize international partnerships, undermine South Korea’s standing in the global arms market and, crucially, impact the strategic balance in the region.

Then-South Korean defense minister Lee Jong-sup inspects the ROK Army’s latest weapons, Aug. 17, 2022 | Image: ROK Ministry of National Defense via Facebook

ASPIRATIONS MEET REALITY

Seoul’s hope is to export the KF-21, which is set to go into mass production this year, representing a critical leap in South Korea’s military capabilities. However, the path to realizing this vision has been fraught with obstacles, primarily stemming from financial and collaborative challenges with Indonesia.

With all six prototypes having successfully completed their test flights last year, the South Korean government agreed to shoulder 60% of the development costs. Korea Aerospace Industries — the manufacturer — and Indonesia agreed to each pay 20% of the remaining expenses.

This collaboration was not just a financial arrangement but a symbol of deepening defense ties between the two nations. However, the partnership faced challenges due to Indonesia’s repeated failures to meet its $1.3 billion financial commitment. These payment failures have exerted considerable pressure on South Korea’s mass production goals, which are crucial for achieving economies of scale and reducing per-unit costs.

The Indonesian defense ministry’s decision to purchase 42 French Rafale fighter jets in Feb. 2022 and Mirage 2000-5 jets from Qatar in June 2023, having still failed to pay its portion of the KF-21 project costs to Seoul, raised eyebrows in the ROK. The French fighter jet deal is estimated to cost up to $8.1 billion.

Although Indonesia has repeatedly assured South Korea that it remains committed to the KF-21 program, the move signals Indonesia’s divergence from its commitments to the KF-21 project. 

Indonesia’s acquisition of tried and tested fighter jets like the Rafale and Mirage 2000-5 must be viewed within the broader context of regional security dynamics. With a modernizing and assertive Chinese navy on one side and Australia’s decision to acquire U.S. nuclear-powered submarines on the other, Indonesia needs to bolster its defense posture.

In this light, Indonesia’s pivot toward immediately available, well-tested military hardware, unlike the KF-21, which is still undergoing tests, appears to be a strategic move to address its pressing security concerns. However, this decision also has the potential to jeopardize South Korea’s strategy to establish a foothold in the global defense industry.

Then-South Korean defense minister Lee Jong-sup meets with Indonesian defense minister Prabowo Subianto during the ASEAN-Korea Forum, Nov. 24, 2022 | Image: ROK Ministry of National Defense via Facebook

SUBIANTO RISES

The financial impasse between South Korea and Indonesia over the KF-21 fighter jet project is further complicated by Indonesia’s upcoming presidential election, scheduled for Feb. 14. With Indonesia’s defense minister, Prabowo Subianto, leading the polls, observers anticipate he will likely be the country’s next president.

Subianto’s likely win has profound implications for the nation’s defense policies and international partnerships, particularly given his role in overseeing Indonesia’s decision to purchase the Rafale fighter jets.

However, Subianto’s potential presidency could severely impact the KF-21 project. Given his procurement choices as defense minister, his administration will likely continue to prioritize immediate and proven defense capabilities.

Further, South Korea’s investigation of the Indonesian engineers for allegedly attempting to steal technologies related to the KF-21 fighter jet could stir public sentiment in Jakarta. Although the Indonesian government has assured that its engineers will “fully cooperate” in the investigation, it could influence Subianto’s defense and foreign policy considerations should he ascend to the presidency.

The resolution of this incident and its reception within Indonesia could either consolidate the nation’s participation in the KF-21 project or trigger the new administration to formally distance itself from the program.

MORE THAN MONEY

Significant investments and joint ventures mark the economic relationship between South Korea and Indonesia. South Korea is one of Indonesia’s major foreign investors, with engagements in various sectors that support the country’s development agenda.

This economic interdependence creates a conducive environment for both countries to find common ground, encouraging a diplomatic approach to resolving issues surrounding the KF-21 project.

However, the alleged attempt to steal military technology from South Korea casts a shadow over trust issues. Once eroded, trust is challenging to rebuild, and the implications of this incident could extend far beyond the immediate concerns of the KF-21 project.

The potential long-term impact on mutual trust may influence future military collaborations between South Korea and Indonesia and Seoul’s approach to international defense partnerships more broadly, including its burgeoning relationship with Poland.

The trust issues arising from the recent incident will require careful management to salvage the KF-21 project and ensure the resilience of future military and economic collaborations.

Edited by Alannah Hill