Defense

Poland, South Korea wrangle over big-ticket weapons financing

WARSAW, Poland — As Poland’s new government weighs whether to continue acquisitions of South Korean weapons initiated by the

Poland, South Korea wrangle over big-ticket weapons financing



WARSAW, Poland — As Poland’s new government weighs whether to continue acquisitions of South Korean weapons initiated by the previous Cabinet, Polish Deputy Prime Minister and Defense Minister Władysław Kosiniak-Kamysz criticized Seoul’s financial terms for further deliveries as unfavorable to Warsaw.

“The offer that was, in part, presented by the [South] Koreans for co-financing or crediting [weapon purchases by Poland] is unacceptable,” Kosiniak-Kamysz told local broadcaster Radio Zet in an interview. “It is simply too weak, it is impossible to be implemented,” he said, adding that talks with the Asian country’s government were ongoing.

The latest meeting took place on Feb. 7 between a South Korean delegation and Deputy Defence Minister Paweł Bejda.

“There is a share of executive contracts, which are ongoing, and a share of framework contracts, which will be subject to further negotiations,” Kosiniak-Kamysz explained.

Poland’s previous government of the right-wing Law and Justice party had inked a number of deals to buy South Korean weapons worth billions of dollars. The orders included  FA-50 light attack aircraft, K9 howitzers, K2 Black Panther tanks, and K239 Chunmoo multi-barreled missile launchers.

Deliveries began last year, but the majority of the units covered by framework deals are subject to a second loan to be provided to Poland by South Korea’s financial institutions.

Upon taking office in December, Polish Prime Minister Donald Tusk quickly declared there was a “problem” with the loan Seoul was expected to provide to Warsaw, as officials began to scrutinize the preceding Cabinet’s defense acquisitions.

Meanwhile, decision-makers in Seoul are readying for the April 10 parliamentary election, and the campaign is delaying legislative work required to pave the way for the provision of a second loan to Poland, local observers say.

The state-run Export–Import Bank of Korea, which is the country’s official export credit agency, has almost reached its lending cap as a result of last year’s string of major arms deals with Warsaw. For the bank to be able to provide another loan to Poland that could cover pending purchases, South Korean lawmakers need to amend relevant legislation before the National Assembly’s term concludes.

Ju Hyung Kim, a researcher at the Seoul-based Security Management Institute, told Defense News that South Korean lawmakers seem to share an understanding that the legislation requires a revision to prevent defense contracts awarded by Poland from getting canceled by its government.

“However, within the National Assembly, there are voices suggesting that this law overly concentrates on a particular country, Poland, and a specific industry, defense,” he said.

A victory of South Korea’s conservative, ruling People Power Party could push legislative work necessary for the provision of a second loan, but it will not eliminate all the challenges that could hamper the two countries’ cooperation, according to the researcher.

“While the outcome of the general election could potentially increase the likelihood of the law being passed, assuming the conservative party prevails in the April election, there are no guarantees that it will be easily approved even after the election. Part of the challenge lies in the credibility issues stemming from the change in the Polish government last year which has impacted decision-makers in South Korea,” said Kim.

The South Korean Ministry of Foreign Affairs and the country’s embassy in Warsaw did not reply to a request for comment.

Leilani Chavez contributed to this report from Manila, Philippines.

Jaroslaw Adamowski is the Poland correspondent for Defense News.



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