Armaments
South Korea is an important manufacturer of armaments, both for domestic use and for export. During the 1960s, South Korea was largely dependent on the United States to supply its armed forces, but after the elaboration of President Richard M. Nixon's policy of Vietnamization in the early 1970s, South Korea began to manufacture many of its own weapons. These included M-16 rifles, artillery, ammunition, tanks, other military vehicles, and ships. Aircraft were assembled under coproduction arrangements with United States firms. Arms exports, including quartermaster goods, vehicles, and weaponry, reached nearly US$975 million in 1982 but declined during the rest of the decade, reaching only US$50 million in 1988. In 1989 Seoul announced that its fledgling aerospace industry was planning to produce an indigenously designed highperformance jetfighter for its air force within two decades. The South Korean aerospace industry also developed a Korean Fighters Program in cooperation with McDonnell Douglas of the United States, with the goal of "acquiring the capacity to design and manufacture supersonic jetfighters."
Construction
Construction has been an important South Korean export industry since the early 1960s and remains a critical source of foreign currency and "invisible" export earnings. By 1981 overseas construction projects, most of them in the Middle East, accounted for 60 percent of the work undertaken by South Korean construction companies. Contracts that year were valued at US$13.7 billion. In 1988, however, overseas construction contracts totaled only US$1.6 billion (orders from the Middle East were US$1.2 billion), a 1 percent increase over the previous year, while new orders for domestic construction projects totaled US$13.8 billion, an 8.8 percent increase over 1987. The result was that South Korean construction companies concentrated on the rapidly growing domestic market in the late 1980s. By 1989 there were signs of a revival of the overseas construction market--the Dong Ah Construction Company signed a US$5.3 billion contract with Libya for the second phase of Libya's Great Man-Made River Project, which, when all five phases were completed, was projected to cost US$27 billion. South Korean construction companies signed over US$7 billion of overseas contracts in 1989.