KOREA the Emerging Donor

Chong-Ae Yu

Institute for Development and Human Security Ewha Womans University Logo (E-mail: [email protected])

From “Korea, Inc” to “Korea Global”: Strategy, Perspective and Challenges

IDHS/Ewha Womans University

CONTENTS



A BRIEF REVIEW OF KOREA’S ODA



PERSPECTIVE



STRATEGY



CHALLENGES



WHAT’S AHEAD

FROM A RECIPIENT TO A DONOR

Recipient (1950s 1980s) Donor (1990s) DAC member (2010) Total ODA received: $13 billion GNP/GNI from $156 (1960) to $19,115 (2008) 1989: Economic Development & Cooperation Fund 1991: Korea International Cooperation Agency (KOICA) Target ODA/GNI ratio by 2015: 0.25% (approx. $3 billion based on 2010 GNI) Shifting from “tied aid” to “untied aid” (a road map to untie 75% of its ODA by 2015)

PERSPECTIVE:

Why become a DAC member?

 From “Korea, Inc.” to “Korea Global” – Korea seeks to play a larger role in resolving global issues and secure its standing as a Global Korea in the int’l community – Korea seeks to participate in global development agenda setting – Korea can serve as a bridge between the developing and developed countries through its experience and expertise

PERSPECTIVE:

“Korean Development Cooperation Model”

 Design a DC model based on: – Korea’s experience as an example of an ODA supported poverty eradication case – Korea’s development experience – Korea’s comparative advantages – Needs of partner countries

Trend in Korea’s ODA Volume, 1989-2008

900 800 From $34M (1989) to $807M (2008); Total Disbursed: $5.7 billion 752,32 700 696,11 802,34 600 500 455,25 423,32 400 365,9 317,49 300 264,65 278,78 200 111,56 140,22 115,99 159,15 185,61 182,7 100 61,16 57,48 76,8 33,8 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

YEAR

Source: EXIM Bank data, C.A. Yu 2010 212,07 2000 2001 2002 2003 2004 2005 2006 2007 2008

TYPES: Bilateral vs. Multilateral, 1989-2008

100% 90% 80% 70% 45 41 46 57 38 22 40 32 59 38 35 26 33 23 38 17 30 33 60% 85 80 50% 40% 30% 20% 55 59 54 43 62 77 60 68 41 62 65 74 67 77 62 83 70 67 10% 15 20 0% 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 YEAR Source: EXIM bank data, C.A. Yu 2010 Multilateral Bilateral

2008

TYPES: Bilateral, 1989-2008 Loans (%) Grants (%)

32% 68% 1999 70% 1989 35% 30% 65% Source: EXIM Bank data, C.A. Yu 2010

2006

TYPES: By Sector, 2002-2006

Social SOC Humanitarian aid Economic SOC Admin costs Production Support to NGOs 59.7% 25.3% 5 3,6 3,7 2005 2004 2003 2002 60.5% 53.6% 43.2% 63% 34.4% 21% 30.6% 28.1% 7,6 5,6 2,9 1,6 5,2 3,7 5 12,1 0,9 4,1 2,1 3,1 2,8 3,5 0,8

40

TYPES: Grants & Loans by Sector,

45

1991-2006

39,3 35 30 25 20 15 15,2 10 5 7,7 21,4 19,5 14,3 0 Edcuation Health Source: EXIM bank data, C.A. Yu 2010 19,6 20,5 3,6 5,7 3,2 9,4 8,2 5,1 7,3 0 Disaster Relief Government Rural Developemnt Info & Communication Grants Industrial Energy Loans Environment & undefined

Bilateral ODA by Region, 2002-2006

80 70 60 50 10 0 40 30 20 Asia Africa Middle East Latin America Europe Oceania Others 2002 2003 2004 2005 2006

Geographical Distribution of Korea’s ODA, 2008 Oceania 0.5% ($3M) Middle East 5% ($31M) Unspecified 13% ($76M) Africa 18.5% ($107M) Europe 3% ($15M) Latin America 12% ($70M) South & Central Asia 13% ($75M) East Asia 35% ($201M)

Source: OECD/DAC Online; Stallings 2010

All bilateral total: $579 Million; Asia Total: 48%

Geographical Distribution of Korea’s ODA in East Asia, 2008 Thailand 1% Vietnam 29% Philippines 13% Mongolia 9% Cambodia 17% Laos 6% China 9% Indonesia 11% Myanmar 4%

Source: OECD/DAC online, Stallings 2010

Malaysia 1%

CHALLENGES…name a few

 Small amount, too spread wide (160 countries)  Regional bias  Trade interest  High in “tied aid”  High in loans  Lack of development “infrastructure”, i.e., professionals, capacity, etc.

Challenges (con’t)

 Much talk of the “Korean Model”, but…  Low-level of public support in increasing ODA  Weak connection between development NGOs/humanitarian agencies with CSOs,  Need greater partnership with recipient country partners,  Need greater partnership with other donors

FUTURE STRATEGY

 Increase ODA volume to 0.25% of GNI by 2015 (int’l community target is 0.7%),  Improve the quality of ODA by: – Increasing ‘untied aid’ – Increasing grants from loans – Synchronize grants with DAC guidelines  Harmonization & Concentration of aid allocation,  Synchronize with MDG goals

Future Strategy (con’t)

 Strengthen ODA infrastructure: – Legal framework, i.e. laws and guidelines – Develop human resources & increase capacity  Promote public participation (in Korea)

KOREA’s Strategic Positioning: between Emerging & Traditional donors

 Focus on economic sectors  Integrated aid package: combines policy advice & infrastructure building & human resource development  Offer relatively high-quality technology with cost & time efficiency  Build a bridge between DAC & non-DAC countries