There are still budget issues to be decided by the parliament, but the defense ministry has approved going forward on the KF-X fighter program:

South Korea’s proposed KF-X indigenous fighter program is now closer to being launched than at any time since it was proposed in the late 1990s, following conditional approval for full-scale development from the defense ministry.

The aircraft, which has been pushed by the ministry’s Agency for Defense Development (ADD) and would probably be built by Korea Aerospace Industries (KAI), must still overcome opposition from the finance ministry and some members of parliament.

If the KF-X survives while production of older European and U.S. aircraft winds down, then next decade it may be the only alternative to the Lockheed Martin F-35 Lightning as a fighter engineered for compatibility with Western weapons and communications. The South Korean program also offers the most immediate sales prospects for Western manufacturers of fighter engines and equipment.

The ministry’s Defense Program Execution Committee, chaired by Defense Minister Han Minkoo, on Sept. 24 approved the basic plan for full-scale development of the KF-X starting in 2015. The committee required that the ministry’s Defense Acquisition Program Agency (DAPA) and the finance ministry agree on the total program cost. DAPA may not issue a request for proposals until it and the finance ministry have that agreement. The agency “cannot be optimistic about the result,” says the Yonhap news agency. The finance ministry habitually opposes costly defense programs or at least seeks delays.

Even if DAPA and the finance ministry agree, full-scale development cannot begin next year without funding authorized by parliament in the government budget due to be settled in December. Members of parliament often take a skeptical view of the defense ministry’s largest ambitions.

DAPA is trying to persuade the finance ministry that the KF-X can be developed for the 8.5 trillion won ($8.1 billion) estimated by an influential think tank, the Korea Institute of Defense Analysis. But the Naeil newspaper reports 8.5 trillion won would pay for an aircraft with only air-to-air capability. Air-to-ground capability would take a further 600 billion won and 4.5 years.

There is also the problem that 20% of the development cost is supposed to be borne by industry, including Lockheed Martin. The U.S. company agreed to support the KF-X technically in return for South Korea last year choosing the F-35A in the F-X Phase 3 fighter competition, but there is no sign that it will invest cash in it—nor should there be, since Lockheed Martin hardly wants to back a future competitor. Indonesia paid 20% of the KF-X pre-development costs and is expected to take the same share of full-scale development.

I think that one of the things that is driving this is that Korea has real doubts as to the affordability and effectiveness of the F-35, and wants to hedge their bets.

I’m also thinking that they are expecting to see a market for a less expensive aircraft built to western standards.