A South Korean warship sank in the Yellow Sea following an explosion Friday. North Korean involvement is widely suspected, but Seoul says no conclusions have yet been reached.

The incident, irrespective of the details, should remind officials in Seoul that the Korean peninsula remains extraordinarily unstable. Pyongyang has long used brinkmanship as a negotiating technique. The North employed its usual array of rhetorical bombs in response to recently concluded joint maneuvers between U.S. and South Korean forces. And ships of both nations exchanged fire last November around the ill-defined sea boundary between the two countries.

Nevertheless Pyongyang has generally eschewed violence in recent years. Tensions on the peninsula thankfully have receded substantially. Two South Korean presidents have ventured north for summits with Kim Jong Il. The Republic of Korea spent roughly 10 years subsidizing the so-called Democratic People’s Republic of Korea as part of the “Sunshine Policy.”

However, lack of reciprocity from the DPRK led President Lee Myung-bak, elected in 2007, to stop providing unconditional aid and investment. The North responded angrily, but little changed in terms of the military situation. North Korea’s armed forces are large but decrepit. Pyongyang could wreak enormous havoc while losing any war. The South has a more modern, better-trained force, including navy. Even so, the ROK remains heavily dependent on the U.S. for its defense.

Instead of focusing on national defense, Seoul has been expanding its ambitions. President Lee now talks about “Global Korea.” His government’s latest Defense White Paper spoke of “enhancing competence and status internationally.” Seoul has begun regularly contributing to international peace-keeping missions.

Washington has promoted this perspective, enlisting the ROK military in Afghanistan and Iraq, for instance. A new study from the Center for a New American Security argues that “the value of the alliance goes far beyond security in the Korean peninsula.” Participants urged the South to create a capability “to provide assistance in more global contingencies.”

It obviously is up to Seoul to decide what it wants to do in the world. But its first responsibility is to defend itself. As long as 27,000 American personnel remain on station in the ROK, the South is not doing enough militarily. Moreover the U.S. maintains the 3rd Marine Expeditionary Force in Okinawa, Japan, as back-up for Korean contingencies, and would be expected to intervene with other large-scale forces in the event of war.

Yet the South is capable of defending itself. Over the last 60 years it has been transformed from an authoritarian wreck into a prosperous democratic leader internationally. The ROK’s economy ranks 13th in the world. South Korea’s GDP is roughly 40 times that of the North. Should it desire to do so, Seoul could spend more than the entire North Korean GDP on defense alone.

The international environment also has changed. Both China and Russia recognize South Korea; neither would back aggression by Pyongyang. The ROK could count on support from throughout East Asia and around the world.

Rather than accept a military position of quantitative inferiority, Seoul could use the threat of an arms build-up to encourage a more accommodating attitude in the North. Pyongyang can only squeeze its people so much to wring out more resources for the military. In any case, the ROK should spend as much as it takes to defend itself without subsidy from Washington.

It also is in America’s interest to shift responsibility for the South’s defense back where it belongs. The U.S. spends almost as much as the rest of the world on the military, yet America’s armed forces have been badly stretched by lengthy occupation duties in Iraq and continuing combat in Afghanistan. Washington should focus on potential threats from major powers, not more peripheral dangers that can be handled by allied and friendly states.

The Korean War ended in 1953, but the potential for conflict never fully disappeared, as evident from the latest events in the Yellow Sea. Before the government in Seoul attempts to save the world, it needs to protect the people of South Korea.