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Development Overview

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Overview of Korea’s development experience

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Development Overview
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Economic Administration

Development cooperation

In the early 1990s, Korea received requests to fulfill its international responsibility to global development due to its increasing economic importance and rising international status. Korea’s establishment of the Economic Development Cooperation Fund (EDCF) in 1987 marked a new phase in economic cooperation. Since then, Korea has increased official development aid (ODA) to contribute to the development and well-being of developing economies. As a consequence, Korean ODA reached 700 million dollars in 2007, up from 180 million dollars in 1998, and its ODA/GNI ratio rose from 0.05 percent in 2006 to 0.08 percent in 2007 and 0.09 percent in 2008. However, this figure is short of the UN’s recommendation of 0.7 percent and the average of the OECD Development Assistance Committee (DAC) members of 0.3 percent.

Korea became the 24th member of the OECD DAC in November 2009, an unprecedented case of leapfrogging from recipient to donor in the 13 years since it joined the OECD. Joining the DAC has great significance in terms of enhancing Korea’s international status and bolstering the vision of ‘Global Korea’ prior to holding the G20 summit in Seoul in November 2010. In this regard, Korea has set a goal of raising the ratio of ODA/GNI to 0.15 percent by 2012 and 0.25 percent by 2015. This would require annual spending on ODA to be around 3 billion dollars, requiring fundamental changes in national policy priorities and consensus. Furthermore, another important task is to strengthen the principles and priorities of ODA to turn quantitative growth into qualitative development, and improve the integration of ODA policy objectives of the individual government agencies.

Korea, as a member of the DAC, is wholeheartedly committed to improving the quality and quantitative expansion of aid, with a focus on the consistency of development cooperation. Having certain comparative advantages, it is essential for Korea to tailor the contents of its development experience to the needs of recipient economies and support the Korean model of development cooperation. It is suggested that ODA projects should be governed by the proposed enactment of an “ODA Act,” which would create guidelines and a performance-based assessment system to ensure objectivity and transparency in ODA programs. Although Korea’s ODA policy gives much weight to the involvement of citizen volunteers and has earned broad public support and participation, it is still at an early stage of development. Based upon the extensive participation of the private sector, it is necessary to exchange views and best practices of ODA, allocate adequate budgets, and promote activities to fight poverty and support development cooperation. It is in need of a more intense and focused effort to seek solutions to such issues as health care, the environment and women’s rights, and nurturing efforts to improve the aid efficiency and the outcome of millennium development goals.

Source : SaKong, Il and Koh, Youngsun, 2010. The Korean Economy Six Decades of Growth and Development. Seoul: Korea Development Institute.
 

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