World Bank Support for educational development

World Bank Support for Educational Development
 
Between 1969 and 1999, Korea continued to take out public loans for educational development purposes. In fact, not a single educational development project took place in Korea during this period without it being attached to some kind of public loan (Attachment 1). Though a single loan project typically required five to seven years to complete, the Korean government continued to take out one loan after another, with the cumulative number of educational loans multiplying explosively in the early 1980s and the early 1990s, and several educational loan projects taking place simultaneously each year.

Such loans, though they were many, were appropriated by the Korean government in a rather selective manner, particularly with respect to the objectives, sources, and target beneficiaries of the loans.
 
<Figure 3> Number of Loan Projects and Amounts of Loans Executed and Spent Each Year
 
First, Korea took out educational loans for a specified range of purposes and objectives. The 12 educational loans that Korea secured from the World Bank can be divided into two groups according to their purposes. The first group includes the four loans, provided from 1969 to 1977, for vocational education and training in secondary schools, aimed at producing skilled workforces. The second group concerns the eight loans, secured between 1980 and 1994, for providing advanced science and technology education to foster future generations of science and technology experts (Attachment 1). The first group constitutes the first phase of Korea’s educational loan history, and the second group, the second phase. Such educational projects were executed without much interruption, given the simplicity of the objectives involved. Further, they were rather single-handedly overseen by either the Ministry of Education or the Ministry of Labor, thereby avoiding the complications and delays that commonly arise in developing countries when multiple organizations and departments attempt to handle projects in an atmosphere lacking efficient administrative institutions or systems. These loan projects, moreover, were neither subject to much political or social controversy nor did they require the creation of additional institutions for their execution. The projects could be completed successfully within specific time periods because they simply involved the purchase of necessary equipment and the training of teachers.

Second, though Korea did secure some educational loans from multiple sources, especially from 1979 to 1982, and from 1986 to 1988, throughout the three decades from 1969 to 1999, the dominant source of such loans was the World Bank. This policy of sticking with one source of development aid enabled that source to accumulate knowledge on the details and history of educational projects in Korea; helped to minimize trial and error costs; and ensured more effective project monitoring.

Third, over 90 percent of all Korea’s educational loans went toward purchasing equipment and materials from abroad—since most were unavailable in Korea at the time—with less than 10 percent earmarked for teacher training and inviting foreign experts. These educational loans therefore helped to alleviate the burden of foreign reserve shortages, a common problem plaguing developing countries. Moreover, insofar as the efficiency of the purchase procedure was ensured, these loan projects could be executed and completed efficiently as well.

In sum, the Korean government continued to borrow relatively small sums of money, for simple objectives, from the same single source, repeatedly. This helped to minimize the risks of failure and to maximize the learning effect for both the donor and the recipient.
 
 
Attachment 1. Education Loans for Korea (1969 to 1999)
 

Source: Lee, Kye Woo and  Min, Yujuana. 2010. The Korean aid policy for the educational sector: Future direction. International and regioonal research 19(1). Seoul National University.