Africa is the poorest continent in the world in terms of public infrastructure. In any country with functioning public infrastructure, roads form the backbone of transportation, responsible for the 80-90% of movements of people and goods. In Africa, however, only 20% or so of existing roads have been paved. The vast majority of existing railways was laid during the colonial era and is now obsolete, unable to function properly. Much of its port and airport facilities are similarly outdated becoming, in effect, major obstacles to the continent’s economic development. Particularly conspicuous as well is the absence of proper electricity infrastructure. Almost 800 million Africans live in the sub-Saharan region, but the aggregate power generation capacity of the region lags behind the capacity of Spain (with a population of 45 million). If South Africa is not counted in with Sub-Saharan Africa, the region’s power capacity is lowered to the level of Argentina. Nearly a quarter of the existing power facilities are out of order and obsolete. Thirty or so African countries, therefore, experience power outages on a daily basis, and serious economic losses as a consequence.
The increasing measure of political stability and signs of significant economic growth in Africa, coupled with activities in resource extraction market and the increasing influx of infrastructure development funds from the international community, have led to the explosive growth of the construction industry on the continent. The growth rate of the construction sector in numerous African countries hovers well above the average economic growth rate. This pattern is especially evident in such resource-rich countries as Angola, Sudan, Algeria, and the Democratic Republic of Congo. The public investment plans of these African states, notwithstanding differences in detail, mostly focus on expanding the social overhead capital (SOC), such as the infrastructure for transportation and electricity. Oil-producing countries now actively channel the wealth they have gained from the rise in international oil prices toward expanding their industrial infrastructure, fueling the growing demand for the development of various plants.
The explosive economic growth of Africa is expected to continue its trajectory for the time being with the concomitant rise in the demand for construction and real estate development. The Economist has speculated that Africa would soon outdo Asia in terms of economic growth. Seven of the ten countries that the magazine predicted to achieve the fastest rates of economic growth over the next five years (2011-2015) are African countries.
The rapid growth of demand for public infrastructure also stems from urbanization. The rate of urbanization in Africa is well ahead of those in other developing regions. By 2040, the continent is expected to boast at least 100 cities with a population of over one million. Another major source of the rising demand for infrastructure expansion is resource extraction. As the international competition over securing access to greater reservoirs of natural resources continues to ramp up, the resource extraction market in Africa is booming. With the continued influx of foreign capital, Africa may well grow to produce more than 30% of all petroleum in circulation worldwide by 2020. The activity of the resource extraction market has consequently led to growing demand for the expansion of transportation infrastructure, including roads, railways, and port facilities. It is also fueling the rising demand for the development of plants including power plants, oil refineries, oil pipelines, and offshore plants. The International Energy Agency projects that the public infrastructure development market in Africa, formed and sustained by the exploitation of petroleum and natural gas in the region, would grow to USD 2.1 trillion (or USD 83 billion annually) in total value between 2010 and 2035.
The most aggressive suitor in pursuit of Africa’s abundant natural resources is China, which has effectively come to dominate the African infrastructure development market by promising and delivering massive amounts of aid. European companies have mainly led construction in Africa in the past, but the power of Chinese capital is now rapidly replacing these traditional leaders. The aggregate revenue that Chinese investors earned from construction in Africa increased 21 times between 2002 and 2011, with their share of the region’s construction market exceeding 40% in 2011.
Notwithstanding the impressive accomplishments of China, France still continues to exert major influence over Africa, thanks to the political and economic connections that trace their origins to the French colonial rule over the region. Africa accounted for 13% of the total revenue that French construction companies earned in 2011. This means that Africa, aside from Europe, is the biggest market for French construction businesses. These French investors are actively expanding their share of the African market by launching consortia and advertising their sector-specific expertise. They have recently begun to diversify their portfolio, to include clients in such nontraditional markets as South Africa, Nigeria, Angola, and Kenya.
The United States, along with Europe, has traditionally played a leading role in the African infrastructure market. Its market share, however, fell from 15% to 5% between 2000 and 2011 due to the increasing vigor with which Chinese investors have been expanding their presence in Africa. The United States no longer claims leadership in the transportation infrastructure market. Instead, it has begun to focus increasingly on the petrochemical market in order to take better advantage of the comparative advantage it has over that area.
The presence of Japanese businesses can barely be felt in the African construction market. Nevertheless, since the Japanese government introduced a new policy in 2008 for increasing support for companies entering the African market, coupled with the sluggish domestic construction industry and effects of the recent major tsunami earthquake that hit Japan, Japanese construction firms are increasingly eyeing Africa as the next major base of their businesses. The number and volume of orders that Japanese companies have secured for the development of buildings and plants in Africa are noteworthy in their rate of growth, increasing by 2.3 times in just one year from 2010 to 2011 to USD 4.26 billion in total.
The construction market in Africa is still in a nascent stage and lags far behind the counterparts in other developing regions. Due to the absolute shortage of African companies capable of meeting increasing demand on their own, however, much of the rising demand in Africa now must be satisfied by foreign and international businesses. In 2010, Africa represented 16% of the international construction demand, well ahead of South-Central America (9%) and North America (12%). These indicate ample opportunities for success from the perspective of international construction companies. There are, nevertheless, still a number of risks complicating the prospects of success, including political instability, pervasive corruption, inconsistent policies of African governments, and the lack of mutual trust between investors and investment-seeking governments. In particular, the low sovereign credit ratings of most African countries also make it quite difficult for investors to secure the needed financial resources from the international financial market. Long-term financing is crucial, however, to the success of public infrastructure development projects, as these capital-intensive projects tend to require much investment and a long time before they begin to yield tangible returns. Africa still lacks the structural and systemic conditions to support the financing projects it requires. Many of these risks are more or less repeated in other developing countries. It would be unwise to be blinded by these risks and lose sight of the great potential for success that Africa has. While one must avoid overestimating Africa’s potential, one must also awaken to the waves of hope and expectations sweeping across the continent and that demand us to eschew our biases against the continent’s capability for development. Obstacles and risk factors persist, but the potential of emerging African construction market is real and warrants thoughtful appraisal.
In light of sizable opportunities that Africa presents, this study examines the potential that the incipient construction and plant development market in the region has. This study then identifies directions that Korean businesses, relative latecomers to the African boom, may take in order to ensure the success of their endeavors. The findings and conclusions of this study can be summarized as follows.
First, Korean investors may seek and find the financial resources they need from international financial institutions. With the exception of a few petroleum-producing countries, most African countries are suffering from extreme fiscal deprivation and are unable to fund development projects on their own. As most African countries have low sovereign credit ratings and present serious risks, it is not so easy to secure the financing they need in the international financial market, either. The chronic difficulty of securing financial means is the major reason that makes investors avoid infrastructure development projects in Africa in spite of the high returns they promise. The export credit agencies in Korea thus need to become more proactive, and enhance financial capacity of Korean companies by securing the required financial means in the forms of cofinancing projects with multilateral or bilateral development financial institutions (DFIs). Such financing partnerships are especially important because Korean financial institutions alone cannot handle the development projects of the size and scope that Africa needs. Increasing the network and cofinancing opportunities with these international DFIs will be also beneficial because it will allow Korean investors to make use of the abundant amounts of information, expertise, and experience that these institutions can offer with respect to Africa.
Second, strategic alliances will also be helpful for entering the African market. At present, the African construction market is in effect dominated by Chinese and European companies. Backed by massive amounts of financial and capital assistance from the central Chinese government, Chinese companies almost exclusively in their ability to meet the new demand across Africa for construction and development projects. Former European colonial states also continue to exert significant influence over the construction market in Africa by taking advantage of well-established political and economic “connecting” with these established leaders would indeed be an uphill battle. It is thus crucial to seek strategic alliances with European companies that boast extensive historical and financial presence in Africa by launching consortia or organizing other forms of partnership. Such strategic alliances would allow Korean investors effectively to overcome their relative lack of information, capital, and experience in the region, and significantly mitigate the risks facing new market entrants.
Forming strategic alliances is also important to spreading out the multiple, complex risks Africa presents by virtue of its political and economic circumstances. Partnership with companies backed by the governments of states that hold significant diplomatic sway over African countries can help Korean investors to lessen their risks, especially associated with unexpected changes or cancellations of their projects. To this end, partnership with Chinese companies is also advised. While Korean investors will have to differentiate themselves from their Chinese counterparts in the long run, they cannot remain blind to the realistic necessity of forming partnerships with these rising leaders of the African construction market. An example of effective partnership would involve a consortium between Korean and Chinese companies in which different partners handle different aspects of the project, such as designing and engineering, technology, financing, and construction. Korean contractors of construction projects may also consider hiring Chinese subcontractors.
Other key candidates for strategic alliances in Africa include major players in resource extraction. Multiple petroleum companies have established their presence in oil-producing African countries. These corporations are in effect the main source of the rising demand for various construction and development projects. Cooperation with these international petroleum companies will allow Korean investors to take better advantage of the growing demand for the development of petrochemical plants and other components of the expanding petroleum infrastructure.
Also, Korean investors need to consider securing loans from multilateral development banks. Over the last 12 years, from 2000 through 2011, Africa was the second-largest regional recipient, after Central-South America, of World Bank loans, receiving USD 160 billion or 21% of all the loans provided during the period. In terms of the number of loans provided, Africa claimed triple the number of loans provided for South Asia or 30% of the total number of loans the World Bank provided. The World Bank provides financial means for various projects in social infrastructure building for eradicating poverty, funding development projects in the areas of energy, transportation, public sanitation, and so forth. Loans for energy development represent the biggest share (22.5%) of all loans provided, attesting to the poor status of electricity infrastructure in Africa. The World Bank will continue to provide increasing amounts of loans for Africa in the coming years, as part of the increasing official development assistance (ODA) the region will be attracting.
With the international society resolved to achieve the Millennium Development Goals by increasing, among others, the amount of ODA to 0.7% of the gross national income of each contributing state, the World Bank is expected to expand the scope and range of the loans it provides significantly. Loans from the African Development Bank (AfDB) may not be comparable to the loans from the World Bank in amount, but they provide intensive support for the development of core infrastructure, including power plants, waterworks, public sanitation, transportation, and communication. While the number of development projects in Africa backed by funding from multilateral development banks (MDBs) is steadily rising, Korean investors make almost no use of such increasing financial support. Ever since Korea began to provide ODA for Africa, it has so far secured only a single project supported by a World Bank loan for Africa. While Korean investors have secured six loans so far from the AfDB, the total amount of those loans amount is a relatively small USD 137 million. The procedures for securing MDB-backed projects tend to be quite complex and time-consuming, and the dearth of records of Korean investors working on such projects only adds to the difficulty of securing such projects. MDBs, however, are appealing sources of financing in that success in an MDB-backed project can more or less guarantee continued, secure relations with the given MDB for some time to come. MDB-backed projects are also attractive because they minimize the risks of corruption. In addition, MDBs guarantee payments for construction projects and carry no foreign exchange risks.
Therefore, in order for Korean investors to benefit from MDB loans, it is vital to establish a comprehensive and integrated service system that can systematically collect, analyze, and provide information on pertinent MDB projects for Korean investors. Furthermore, it may also be useful to form a pool of experts on MDBs to encourage Korean companies, investors, and participants in MDB projects to share their experience and information. In particular, an important precondition for effective access to MDB-backed infrastructure project market are: good grasp of MDB inner workings, policy, procedures, and project cycles. This means that Korean investors need to participate as consultants from the very beginning of each project they want to secure, including its preparation. Participation in the preparatory stage will enable these investors to contribute to the decision of the project’s purposes, characteristics and the related components, thereby allowing them to develop a workable blueprint regarding the requirements of the project, including the services and equipment it needs.
Equally important is the need to form a network of exchange and information with other countries. The MDB-backed projects involve the submission of development and project plans from each participating country, MDB approval, and bidding. Networking with MDBs and recipient countries from the first phase of this process will help Korean investors gain greater information, and thus strengthen their chances of winning the bids. The bidding information announced on the Internet is already too public and obsolete according to experts. A well-functioning network with the officials of MDBs and recipient countries will be crucial to collecting the information necessary to draft effective project proposals.
Another key factor that must not be overlooked is the need to build and maintain an effective network of human exchange. The African market entails high levels of uncertainty, unpredictability, and risks. Close working ties with officials of African governments and clients are therefore vital for securing development projects in the region. Most African countries remain unfamiliar markets for Korean investors. It is therefore strongly recommended that the Korean government facilitate these investors’ activities in the region by forming and fostering active exchange with representatives of local governments and clients.

The purpose of this research is to explore and examine Korea’s future role and direction that Korea must take with regards to Official Development Assistance (ODA), at the global level. To search for Korea’s development cooperation plans, the research commences by clarifying international trend of ODA Policy; furthermore the policy and system of EU and experience of major EU donor countries are introduced and analyzed.
The amount of ODA for international development cooperation has gradually increased; the ratio of ODA/GNI in 2011 was 0.13%, in 2012 the ratio has increased to 0.15%, and the target is to reach 0.25% by 2015. Korea has achieved the development process in a short period and is presented as an emerging donor of ODA in international arena, though the absolute scale is small.
 Since Korea became a member of OECD DAC in 2010, Korea is planning to expand the scale of ODA as well as to improve ODA both qualitatively and quantitatively in order to advance the development policy. Hence constructing infrastructure and the strategy of development aid policy which are related to long-term vision of a nation’s development are presented as the basic task. Moreover Korea should search for improvements of ODA policy from two aspects: a) to establish ODA policy management system since Korea is still at the beginning stage as a donor country, and b) to arrange plans to actively cooperate with international community.
The recent international consensus agreed to increase the ratio of ODA/GNI by 0.7% however Korea’s current ODA scale does not even reach the average scale of OECD DAC which is 0.5%. Furthermore continuous increase of relatively early-planned ODA budget is essential. Thus at this point, the task establishing the basis of policy and ODA support system as well as enhancing its efficiency are immediately requested.
Case studies of advanced donor countries’ development cooperation have already been introduced and organized in many research papers however this research delves into each different characteristics of European countries, divided into several groups; moreover it examines the joint ODA policy of EU that is shared between European countries, to show how Korea should arrange international cooperation plans.
Since Europe has many experiences and knowledge gained from vast years of ODA enforcement, Europe’s ODA system analysis and policy management will be utilized as a guide for Korea to set up concrete directions of aid policy and improvements that are necessary. Unlike other continents, Europe had already constructed aid and support related network with recipient countries, tangible and intangible infrastructure since colonial period. Moreover through along history, Europe has gone through many trials and errors which led to continuous effort to make an improvement and thus built know-hows. As Korea is at a very beginning stage of ODA policy, Europe can provide many issues and answers from their experience; hence we expect to minimize trial and error.
Another urgent task for Korea is measures for cooperation with international aid community. As is generally known, Millennium Development Goal (UN MDG) –the Millennium Declaration- was adopted by the UN in 2000. The Declaration is based on the international consensus that rather than one-off or short-term aid project, a medium and long term master plan should be the basis that satisfies the actual needs of recipient countries. In order to achieve such goal, systematic and comprehensive aid support is asked for instead of independent aid at individual-level by donor countries; thus the importance of mutual assistance and cooperation with international development organizations are emphasized. Since Korea is now an emerging donor, establishing aid model and policy direction is greatly needed. In addition, when we consider that donor countries have been closely cooperating with each other through various forms for the past ten years, Korea should recognize that developing measures for cooperation with international society is vital and urgent.
This book is composed of 11 chapters: 10 chapters including introduction and implication for Korea as a conclusion. Chapter 1 briefly explains the background of research, followed by the scope and structure.
Chapter 2 covers the development process of ODA in international society, its’ current status and trend analysis as well as individual characteristics of donor countries. Aid-related issues that are discussed in international organizations and academic circles are further examined and alternatives are proposed, along with direction of ODA policy development in international society. Through such analysis, we aim to understand the position of ODA policy adopted by EU and European countries and implication for Korea regarding possible policy direction.
 To a certain extent, Chapter 3 and Chapter 4 are outlines of European countries’ general aid policy. As mentioned before, although EU is the main aid agent it also reflects the member countries’ opinion towards aid, which places EU in unique position. At the same time EU plays a leading role along with USA as it suggests ‘standard’ for development aid policy, since EU represents the standpoint of the member countries.
 Furthermore EU is responsible for adjustment of joint policy between member countries hence it is helpful to understand the general flow and direction of each different policy. EU is also consistently transforming according to the development of international aid policy and EU’s expanding authority due to deepening of economic integration. From this aspect we can say that EU’s ODA management system and policy direction will have important implications for Korea’s ODA policy establishment.
Chapter 4, EU’s Green ODA Policy is also another topic that is related to general European donors’ position. Sustainable development is the new paradigm in international arena and is recently stated as an important target in relation to ODA. When considering aid, EU and member countries are increasing their portion in environment, conservation of nature, actions against climate change and protection of living things, etc.
From the recipients’ point of view, although they agree to such principles it is difficult for them to play an active role as they have a fixed idea of trade-off between environment and growth; thus the recipients show reservations when it comes to actual operation of policy. Considering such aspect, Green Growth concept as a strategy in pursuit of growth proposed by the Korean government appears to be compelling.
 From Chapter 5 to Chapter 10, case study analysis of each country chosen by the research team is presented: Germany, France, UK, Sweden, Italy and Spain. European donors that are member countries of EU represent 55-60% of international development aid thus Europe is the most important donor area. The majority of European aid is conducted through seven main agents (EU and 6 member countries), which are the subject of this research. The common European acknowledgement is ‘diversity within a community’; it reflects common grounds of European countries but different views on history, foreign relations, understanding economy, culture and tradition. The characteristics of aid policy and its’ operation also differ thus analysis on individual country took place.
To conclude, after having analyzed each country’s aid policy, advantages and disadvantages of each aid system, Chapter 11 gives implications for Korea and possible policy proposals. As an emerging donor, Korea does not have enough experience or know-hows in aid; furthermore Korea still lacks concrete aid system and has somewhat abstruse policy direction therefore it is necessary to establish clear and systematic policy as soon as possible. Korea should utilize its’ position as a new-comer and adopt advanced donors’ advantages whilst complement their disadvantages so that it can be applied to Korea’s conditions.

The purpose of this study is to provide suggestions for the enhancement of economic cooperation between Korea and the resource-abundant Andean countries including Venezuela, Ecuador, and Bolivia. These three countries have been deemed risky due to political unstability and therefore have remained as a major challenge for Korean companies in terms of cooperation despite their great resource potential.
In this sense, this study offers practical ways to enhance comprehensive economic cooperation with these three countries that are not limited to resource development cooperation. These include creating a friendly environment for Korean companies to encourage their entry into the resource development sector of the region, and building a sustainable model for economic cooperation. Also additional emphasis is put on finding measures to minimize the risks of doing business locally.
This report details the objectives outlined above in 6 chapters. The first introductory chapter lays out the necessity and the purpose of this study, methodologies, literature review, and the future work.
In the second chapter, the importance of economic cooperation with the three countries is analyzed, along with political and economic aspects of the cooperation environment. Here the three 'values' that underlie the economic importance of these three countries are described: one as a rich repository of natural resources, another as a market, and the last as target countries for development cooperation.
Chapter three is an in-depth analysis of the mid/long-term national development plans of the three countries and their priority sectors which have great potential to promote and enhance cooperation. The analysis of the national development plan concentrates on “the Government Plan 2010-2015(Programa de Gobierno 2010-2015 in spanish)” for Bolivia, “the National Well-being Plan(PNDBV 2009-2013)” for Ecuador, and “the Simon Bolivar National Development Plan 2007-2013(PNDSB 2007-2013)” and “the Second Socialist Plan of the Nation 2013–2019” for Venezuela. As a result, it is found that there is high demand from the Bolivian government for support of plans for the development of its natural gasㆍrailroadㆍelectricity sectors, and the electricityㆍpetrochemical plants sector. The Ecuadorian government has made higher education, technology transfer, IT, and transportation infrastructure high priorities. Lastly, with the Venezuelan government, resource development, oil refiningㆍgasㆍelectricity plant, and common fund raising seem to be promising areas for cooperation.
In chapter four, specific cases of major countries such as China, Spain, India, Brazil, Canada and the US are analyzed in order to find some implications for Korea. Firstly, in the area of development cooperation, an introduction is made regarding Spain’s support for national development plans, Canada’s “Think Tank Initiatives,” Brazil’s economic development experience sharing. Secondly in industrial technology cooperation, China’s communication satellite development, and also China’s information and communication sector cooperation are described in detail. Thirdly, in resource development cooperation, India-based JSB’s worst practices in the mining sector in Bolivia and US-based Chevron’s case of successful CSR (Corporate Social Responsibility) activities in Venezuela are introduced. Lastly in financial cooperation, Brazil, China and Italy’s electricity generation business, China’s entry to the natural resource development sector, and Korea’s oil refinery construction are presented as good examples.
Chapter five examines the current state of economic cooperation between Korea and the three Andean countries particularly in trade, investment, resource development, plant construction, development cooperation, and institutional cooperation. Based on this analysis, this study proposes some agendas for economic cooperation that Korea should be looking at. In particular, SWOT analysis is conducted in order to review those three countries’ environments for the economic cooperation.
Finally in chapter six, based on analyses in the previous chapters, several suggestions are made for economic cooperation with the three countries. At the government level, △ building and strengthening the cooperative network, △ promotion of partnership for industrialization strategy, △ risk management system construction, △ reinforcement of cooperation with CAF (Development Bank of Latin America), △ development of the triangular cooperation model, △ public awareness or the image improvement efforts related to Korea are suggested. At the corporate level, △ utilization of government/public channels, △ establishment of strategic partnerships with Chinese companies, △ enhancement of CSR activities, △ Hub&Spoke strategy, and △ diversification of financial methods are proposed.

Like many migrant-receiving countries, South Korea has pursued the dual policy goals of restricting the inflow of low-skilled workers while trying to attract and retain highly-skilled workers. Yet after twenty years of labor immigration, the foreign labor force in Korea is largely made up of low-skilled workers whereas the number of highly-skilled, professional foreign workers remains decisively small. Such challenges are compounded by the existence of a large number of undocumented migrant workers, which has persisted due to complex economic and political reasons.
This study approaches such challenges faced by Korean immigration policy makers from origin-country perspectives with a focus on Southeast Asia. Southeast Asia is a major region of origin for labor migrants in Korea. Understanding the “supply side”— the structural forces and policy factors that contribute to labor emigration—will certainly improve bilateral labor cooperation between Korea and origin countries in the region. By doing so, this study also addresses the scarcity of research on labor migration from the origin-country perspective in Korea’s policy and academic circles.
A survey of several structural factors of major Southeast Asian economies; including their wage gaps with Korea, levels of economic development, sectoral composition, and labor market conditions; suggest that these countries have strong, although varied, incentives to promote labor emigration such as reducing unemployment and securing overseas remittances. Reflecting the importance of overseas employment and remittances to their economies, some countries in Southeast Asia have developed policies and institutions to promote labor migration and protect their workers abroad. The priorities of labor migration in their external economic policy as well as government capacity to promote labor migration in bilateral cooperation with Korea vary from country to country, but some countries have come to see Korea as a highly important destination of their labor migration and to actively pursue the labor mobility agenda with Korea.
In view of Korea’s policy challenges in controlling the influx of low-skilled migrant workers and to increase high-skilled worker migration, this study of Southeast Asian origin countries suggest a number of policy recommendations. First, while Korea needs to strengthen its efforts to reduce the entry of low-skilled workers and the number of undocumented workers across the board, it can better achieve such goals by concentrating on countries with largest potential impact. Bilateral labor flows into Korea are highly uneven in their distribution among countries, so improvement with major labor cooperation partners can have disproportionate effects on overall foreign labor outcomes. In addition, this will also help diversify the labor flows from the origin countries, which is another important recommendation this study makes. The reliance on a limited number of origin countries can lead to an inflexible policy environment with adverse implications for bilateral labor cooperation. Second, Korea needs to pay more attention to high-skilled workers from Southeast Asia. Considering fierce global competition for talent, Korea is most likely to secure highly-skilled migrant workers in the form of foreign students. The close relationship between Korea and Southeast Asia should work as an advantage, and Korea could design scholarship and employment programs for Southeast Asian graduate students based on a brain return platform where after a period of employment in Korea they should return home to contribute to the development of human resources in origin countries. Attracting foreign talent and graduate students from Southeast Asia needs to focus on countries with relatively good math and science education, such as Thailand, the Philippines and Vietnam.