|Title||G20 Development Agenda and its Implication for Korea’s ODA Policy|
|Author||Jongil Kim,Won-Gyu Hwang,Mikyung Yun,and Nak Nyun Kim|
|Series||ODA Policy Analyses 11-01|
G20 Seoul summit recognized the importance of development of poor countries to achieve sustainable and balanced growth of world economy and agreed on Seoul Development Consensus for Shared Growth. The G20 development consensus declared core principles for development cooperation and issued the action plans to deliver the development cooperation. As a country which played a key role in making Seoul Development Consensus, Korea needs to provide a leadership in carrying out the commitment of G20 countries to concrete outcomes. This study selects the four important topics in order to contribute to Korea's ODA policy reform. The topics consist of independent issues that have been rarely covered by previous studies. Although this study comprises independent topics, the topics are complementing each other and previous studies on ODA policy reform and suggest the policy recommendations for Korea to make contributions to the fulfillment of G20 development agenda.
First, this study tries to find the direction of Korea's ODA policy reform by looking into the basic philosophy of the G20 development consensus. From the six core principles on which the action plans of the consensus are based, this study characterizes G20 development agenda as growth-oriented and market-based development cooperation, high priority to local capability-building, market-friendly development strategy, recognition of no one-size-fits-all development, and policy ownership of developing countries. Among these characteristics, the growth-orientation differentiates the G20 development consensus from existing development agendas. In this respect, Korea as an exemplary country that reduced the poverty through growth has ample opportunities to contribute to the fulfillment of G20 development agenda. In this regard, this study suggests the direction of Korea's ODA policy reform as follows. First, Korea's ODA should focus more on what Korea can do best such as aid for trade, education, and industrial upgrading. Second, Korea should build the ODA framework which allows strategic and consistent implementation. Third, Korea's ODA should be closely associated with activities of private sectors. Fourth, Korea should pay more attention to the policy coherence. Fifth, Korea should enhance its status in multilateral ODA by finding its proper role. Sixth, Korea should try harder to share the development knowledge based on the right understanding of Korea's experience.
Second, this study reviews the international development cooperation in Africa and provides the suggestions for Korea to improve ODA in Africa. Although many African countries received an enormous amount of foreign aid since the 1960s, they did achieve long-lasting economic development to reduce the poverty and enhance the quality of living. However, the recent decade showed that Africa too can grow fast to erase the image of poverty and disease. It implies that growth-oriented ODA emphasized by G20 development consensus could be applied to African countries and be expected to bring a considerable change in development. In this perspective, this study provides the brief history of development aid in Africa by exploring the patterns and effects of aid and attitude of Africa toward the aid. After introducing the on-going change in African economy with paying attention to China's aid, this study provides the overview of Korea's ODA in Africa. Finally, this study points out contributions and problems of Korea's ODA in Africa and suggests directions and tasks for Korea's ODA in assisting development in Africa
Third, this study investigates the issue of policy coherence for development(PCD) in Korea. PCD is needed to minimize the negative effects on development of policies of developed countries that may not be directly related with ODA but may indirectly affect the poverty reduction and sustainable development of developing countries. Korea has not paid much attention to this issue and many government agents do not recognize the issue itself. This study introduces the current discussion in OECD/DAC and benchmarks the EU's practice to induce the basic tasks Korea should undertake for PCD. First, Korea should introduce the obligation of PCD through enactment of domestic law and issue the policy documents for PCD covering all government agents. Second, Korea should establish a government organization responsible for PCD which evaluates the various effects of policies on development. Third, PCD should be evaluated in trade and investment agreement with developing countries. The agreement should be made with explicit statement on PCD.
Fourth, this study reviews the role of foreign aid in the economic development of Korea, particularly in the 1950s. It analyzes the basic statistics which show the size and composition of foreign aid to Korea and evaluated the effects of aid in terms of both microeconoimc and macroecnomic perspectives. This historical review of Korea's experience as an aid recipient provides interesting implications for international development cooperation. First, Korean experience show the composition of aid changed over time as Korea was relieved from the severe shortage due to the Korean War. In the early periods after the war, Korea received ready-made consumer goods. Afterwards, Korea tried to receive raw materials or half-finished goods and then facilities and equipments for production. It shows the growth-oriented ODA should enforce the value-addition activity of local industries by providing input materials or half-finished goods. Second, the effect of aid on local industry should be evaluated carefully by considering the effect of competition from aided goods on locally produced goods. Third, Korean government tried to create the economic rents through allocation of goods received by aid. The economic rents were used as incentives to private sectors to achieve the policy goals. The success of this kind of policy depends on the government's ability in allocating the rents based on proper criteria consistent with economic development. Fourth, Korea's experience indicates that the aid could become a catalyst for policy and institutional
reforms in recipient countries, which could bring about more significant consequences in economic development.