Korea Institute for International Economic Policy (KIEP) has expanded its cooperative relations with the world since it took the role of the hub of regional studies in public research areas of Korea. As a part of our systematic efforts to foster international exchanges and build the knowledge based through interdisciplinary collaboration, The Center for Regional Economic Studies (CRES) initiated a researcher-exchange program called CRES Visiting Fellows Program in 2008. The program brings together influential professionals from academia and the public sector to advance individual, institutional and national understanding of regional economic matters and to improve international cooperation on related research. This volume is a part of our achievements through the program and we hope this proceeding would work as another channel to deepen the understanding of regional economies in Korea.

Executive Summary
1. Introduction
2. Data
3. Results
4. Closing Remarks
Appendix: additional graphs and results

Income inequality in many countries has risen recently. Using aggregate data of 22 countries, this paper provides a new evidence about the factor which might
contribute to the rise in income inequality. The main finding is that the lack of competition, which is measured as the rise in markup, tends to be positively associated
with the rise in inequality (higher inverted Pareto-Lorenz coefficient). The result is robust with other factors considered in the previous studies, e.g. openness
to trade, capital account openness, technology, etc. I also find that facing the lack of competition, top 1% individuals gain and individuals between top 10 and
5% income shares among population lose the most. One possible interpretation is that the extra profit caused by the lack of competition would be obtained disproportionately in favor of top 1% individuals and therefore income inequality would increase.

 

The purpose of this study is to promote systematic development of the Laotian education sector for improvement of current education development cooperation projects in Laos (2013-2015) and to provide implications for the establishment of the Country Partnership Strategy (CPS) in 2015.
 The direction of the education sector development cooperation and major cooperation programs are proposed in this report are based on the Laotian government’s 7th National Social Economic Development Plan 2011-2015, analysis of needs in education development, and actual analysis on assistance from international organizations and major donor countries. To this end, published data from international organizations such as the World Bank and Asian Development Bank (ADB), research data and previous research on education cooperation were analyzed. Also, field research (July 5th-12th , 2014) was performed to identify the needs related to cooperation in education sector development and to collect the latest data in Laos. During the field research, interviews were conducted with government officials from ODA-related departments, in addition to departments in education and vocational training.
In the First Chapter, the purpose of this study, its background, and research method are presented.
Chapter Two presents the result of the research on the development plan and education development needs in Laos. During 1990-2012, industrial diversification was in progress as the agricultural sector, which was the country’s main industry in the past, decreased in terms of its share of the economy. To ensure the momentum of change and pursue modernization, industralization, social and economic development in Laos by 2010, the Laotian government promoted the 7th National Social Economic Development Plan (2011-2015). In promoting the education development cooperation in Laos, it is necessary to actively support human resource development which is vital in raising the overall level of the various communities. And in order to develop the plan, the result of the research shows that development needs should focus on primary education and early secondary education. After that, potential development needs were identified in vocational training which remains very weak at the moment. Finally, it seems necessary that strategies that effectively responds to needs in higher education development along with economic growth in Laos have to be formulated.
The Third Chapter surveyed the current status of cooperation in education development as they relate to the international community in Laos and reviewed the development cooperation cases from major donors (Germany, Japan, Australia). Analysis showed that during 2008-2012, 13.3% (54.66 million US dollars) of total ODA went toward the support of the education sector .
Chapter 4 described the performance of Korea’s education sector development cooperation by agency (e.g. KOICA, EDCF, Ministry of Education). The results showed that, in a recent five-year period (2007-2011), Korean government provided 23.12 million US dollars in support of education, which was the second largest next to drinking water supply and sanitation (29.95 million US dollars).
Based on results from chapter 2-4, Chapter 5 proposes a plan for cooperation in education sector development in Laos which can be included in the Laos Country Partnership Strategy 2016-2020. The purpose of cooperation in the Lao education sector development is “Supporting Lao education development goals by gradually increasing assistance”, with strategies suggested as follows: 1) step by step project management, 2) minimization of assistance overlap, 3) maximizing the use of Korea’s development experience as a recipient. As for operating principles of education development cooperation projects, such strategies as 1) systematic needs analysis, 2) evidence-based project management, 3) strengthening partnership, 4) systematic performance management principles, were suggested. The major areas of assistance, including secondary education, vocational training, and higher education were identified
Finally, Chapter Six summarized the research results mentioned in previous chapters and suggested implications which will help improve the current direction and project management with respect to education sector development cooperation of Korea.
The implications of proposals made in this study for overall cooperation in education sector development are as follows:
First, to improve the efficiency of education development cooperation, harmonization between Korea and other donor institutions that have served recipient countries for a long time should be considered as a critical principle.
Second, education development cooperation projects should be pursued in concert with middle and long term Laotian education sector development cooperation.
Third, policy measures which would enable development cooperation agencies to follow the education sector plans of the CPS need to be prepared.
Fourth, stronger monitoring along with increased evaluation and follow-up training for education development cooperation projects is important.
Fifth, to increase the level of quality and efficiency of education development cooperation, training of ‘education ODA advisers’ is needed who can stay in recipient countries and help develop joint projects in consultation with the Ministry of Education officials.
Finally, ODA projects in education should favor gradual expansion over rapid quantitative expansion in order to improve the efficiency.

 

The main objective of this study is to review the health sector of Myanmar and to develop and suggest future cooperation programs between Korea and Myanmar. In recent years, the importance of cooperation in the health sector became more visible. Three out of eight Millennium Development Goals (MDGs) are health-related. Many people in developing countries in Africa and Southeast Asia have lower health status and face significant risk of disease. Because of the shortage of health care workers and insufficient facilities and financing, people in those countries also have difficulty obtaining necessary health services.
 With a population of over 50 million, Myanmar is a country with very low economic status, not to mention having weak social security and health care systems. Since overall assistance to Myanmar have hitherto been very low, it is expected that many Western donors will actively try to provide assistance to Myanmar. Recently, Korea also has included Myanmar as a special target country for assistance. However, there appear to be no specific plans about ways to cooperate with the country in the near future. Therefore, this study assesses Myanmar’s health sector, reviews other donors’ experience in collaborating with the country, and evaluates Korea’s comparative advantages in terms of development assistance, to formulate how to work with the country.
In terms of the study methods, a review of the literature on the health sector of Myanmar and recent trends of assistance to the country by major donors was done. Also, in-depth interviews with key stakeholders in Myanmar, such as government officials and researchers, were conducted to identify major problems in the health sector in Myanmar and to suggest future collaboration programs.
The results of this study are as follows. In terms of overall health status, Myanmar needs to make significant improvements. Although Myanmar has seen a dramatic improvement in average life expectancy during the past 20 years, disability adjusted life expectancy(DALE) is still very low: 51.4 years for men and 51.9 years for women, respectively. Myanmar continues to have higher mortality from infectious diseases, such as tuberculosis and diarrheal diseases, and HIV/AIDS; there is also growing prevalence of and mortality from chronic, non-communicable diseases including malignant neoplasms, respiratory diseases, and cardiovascular diseases. At the same time, maternal and child health needs to be improved as well.
 Myanmar’s health expenditure per capita has increased steadily. Specifically, it went up from $2.43 in 2001 to $19.79 in 2012. However, total health expenditure as a percentage of the gross domestic product (GDP) increased only about 2.0%. This figure is the lowest among the countries of WHO’s Western Pacific and Southeast Asia region. In addition, the proportion of households falling into poverty due to health care utilization is very high because the percentage of out-of-pocket payment is almost 71.3%. This may be due to the Myanmar government’s overall low spending in health.
 The low level of investment in health is related to insufficient health care resources in Myanmar. Shortages of health care workers in Myanmar remains an important issue. Compared to the average number of physicians per 1,000 population in OECD countries (3.1) and 22 Asian countries (1.3), Myanmar has only 0.6. In addition, the OECD average of nurses per 1,000 population is 8.7, and the average for 22 Asian countries is 2.8, but the number in Myanmar is only 0.6. Insufficient health care facilities are also problematic. The average number of beds per 1,000 population among OECD countries is 4.9, and that of 22 Asian countries is 2.5, but, the number in Myanmar is only 0.6.
Most health care spending in Myanmar is financed by out-of-pocket payments by individuals, and the public financing system is still in the early stages of development. Governance structure for the health care system has so far remained centralized, but the necessity for decentralizing it to some extent has arisen recently, and thus, capacity building for local government officials in health planning should be needed.
Overall level of assistance to Myanmar by major donors has been very low compared to other developing countries in the neighborhood. However, since the new government began working together with major donor countries and resuming development cooperation, it is expected that cooperation with the Myanmar government continues to grow. Aid to the health sector in Myanmar by major donors has been focused on infectious disease control. Japan has been the leading country in assisting Myanmar in terms of developing the health sector. USA and other Western countries have primarily relied on developing 3 MDG funds to assist Myanmar. Although such a vertical approach has led to some success, the Myanmar government has also recognized the importance of using the horizontal approach, where strengthening the overall health system is pursued while also continuing project-based collaboration programs.
Based on the analysis of the current situation of the Myanmar health sector and the assessment of comparative advantage of Korea in terms of development assistance, a total of four specific areas for cooperation are suggested: 1) developing a system to improve the overall quality of health care service, such as by reforming the health care system and by developing a more efficient governance system of health care institutions, 2) strengthening the role of public health centers, particularly in areas of non-communicable disease management and health promotion, maternal and child health, and vaccinations, 3) enhancing the capacity of health care workforce by providing a variety of education and training programs tailored to policy makers, clinicians, and primary level health care personnels, and 4) assisting the government in building public health care financing system, such as introducing a pilot program for health insurance and launching a health information system.
Given that Myanmar has many underdeveloped areas, particularly in the health sector, Korea needs to formulate viable development programs to cooperate with the Myanmar government. During the process, however, it is essential to work together with multiple development partners and allowing them to participate when developing plans for assistance programs related to the health sector in Myanmar.

 

ICT is considered one of the most crucial components for the development of developing countries and is included as one of the Millennium Development Goals. Since the early 2000s, South Korea has actively participated in various ODA programs in the field of ICT. However, there is still room for improvement in order to enhance the effectiveness of Korea’s ODA programs in ICT. Within this context, this study focuses on Korea’s ICT ODA programs in Vietnam implemented in response to the steady and growing demand from the government of Vietnam. In this study, the current status of Vietnam’s ICT ODA was examined, based on findings from literature analysis and site visits. Interviews were also conducted with policy makers from Vietnam’s Ministry of Information and Communications and Korean IT entrepreneurs based in Vietnam. Based on these findings, development strategy and measures for improving Korea’s ICT ODA programs in Vietnam are suggested.
Chapter 2 examines whether ICT could make real contributions to a developing country’s economic growth, social development and reform of the public sector. Requirements necessary for these developments to occur were also examined. Unlike other fields of development such as education or health, ICT serves more as a means to development rather than representing actual development. For instance, improvements in educational level and health improve the lives of people in developing countries. However, for ICT ODA to actually make an impact in improving the lives of people, it needs to go beyond simply providing the technology and equipments to the partner country but rather help create an environment where these tools can actually be used to improve the lives of people from developing countries. The authors suggested that in order to create an environment conducive for the successful outcome of ICT ODA, the role of public-private partnership, post-management, provision of appropriate technology, and usage should be emphasized.
Chapter 3 examines the current status of Vietnam’s ICT and related development strategies. The process of establishment and implementation of Vietnam’s ICT development strategies were also examined in relation to the government’s organizational features and possible obstacles in implementing these development strategies. Vietnam has already established a basic ICT infrastructure; and the demand for the advancement of ICT infrastructure and diffusion in various fields including the economy, society and public administration are growing. It is expected that the demand for the development of e-government will be particularly high in the future. The Vietnamese government listed ICT infrastructure as one of the ten key socio-economic infrastructures, while giving high priority to promoting the development and use of ICT. The current demands for ICT development in Vietnam can be categorized as follows: ➀ establishment of IT infrastructure, ➁ establishment of a national database, ➂ establishment of a national information system. The challenges in implementing these plans come from the absence of a control tower, a role which should be fulfilled by Vietnam’s Ministry of Information and Communications, as well as the lack of cooperation between the central and local governments.
Chapter 4 examines the status of various ODA activities in Vietnam from Japan, United States, and other major development banks including the World Bank and the Asian Development Bank. From 2002 to 2012, total of 315 million USD were spent on ICT ODA in Vietnam, 73% (and the most) of which were expended by Japan, followed by South Korea. It is expected that Japan and Korea will continue to be Vietnam’s major donors in ICT ODA. By examining how the ODA were spent by these two countries, it was found that Japan concentrated its efforts in the broadcasting sector while South Korea concentrated on the informatization of the public administration sector.
Chapter 5 examines South Korea’s various ICT ODA projects and programs in Vietnam and its trends. Looking at ICT ODA made by different governmental agencies from South Korea so far, more than 70% came from concessional loans (EDCF), while 20% came from grants (KOICA), followed by ODA activities by other agencies. South Korea’s ICT ODA tended to be concentrated in public administration and education, as evidenced by the establishment of the Korea-Vietnam Friendship IT college and on-going construction of the Government Integrated Data Center. Based on the critical review of the ICT ODA in general and assessment of some of the major ICT ODA projects from this study, the following issues should be addressed in order to improve the quality of South Korea’s ICT ODA programs in Vietnam. First, the biggest challenge comes from the lack of coherent and unified development strategy which creates room for mutual cooperation and efficient division of labor among related agencies. Second, South Korea’s ICT ODA programs are being conducted without sufficient review and in-depth analysis of Vietnam’s political structure, economic conditions and culture. Such lack of prior understanding of Vietnam could pose difficulties in implementing the ODA programs including delays in implementation and the result not being applicable at the local level due to lack of localization. Given these circumstances, implementing a successful ICT ODA program requires combining South Korea’s ICT expertise with considerations for Vietnam’s local context.
Based on the discussions above, chapter 6 suggests a few areas in ICT ODA programs which South Korea can conduct in Vietnam where it would have the advantage, with recommendations on how to address the existing challenges. Suggestions on procedural improvements to conduct and enhance cooperation with Vietnam in the ICT area were also made. Lastly, the need for enhanced public-private partnerships and programs focusing on the ICT application were emphasized as important issues for the future of ICT ODA in Vietnam.
The optimal area for South Korea to conduct ICT ODA in Vietnam is informatization projects for public administration, namely the establishment of the e-government. Vietnam is already equipped with basic ICT infrastructure and the demand for ICT ODA continues to grow as its government has already identified the establishment of e-government as its national project and a necessity for administrative reform. When it comes to the establishment of e-government, South Korea has advantages over other donors of ICT ODA since its governmental agencies have already accumulated the expertise and know-how needed in the informatization of public administration, in addition to the fact that  South Korea is an ICT powerhouse.
However, in order for South Korea’s ICT ODA projects to be implemented successfully and yield favorable results, ODA programs should be conducted more systematically, based on the understanding of Vietnam’s ICT policy and governance. To cite an example of local context in ICT policy governance in Vietnam, it usually takes a long time to reach consensus among government organizations and it is not easy to collect data on the demand for ICT ODA programs due to lack of mandates for the Ministry of Information and Communications to coordinate different ICT related policies. In order to address these issues, there is a need to appoint an institution with the task of consolidating an up-to-date database of the current status and types of ICT ODA projects conducted in Vietnam so far. Due to the fast evolving nature of ICT itself, it poses another challenge for the successful implementation of ICT ODA programs, as it needs to be timely and applicable. If the assessment of demands and program implementation takes too much time, the results may not be useful as the technology has already become obsolete. To overcome this issue, it will be helpful to arrange regular meetings with Korean IT companies in Vietnam and provide opportunities for them to contribute in creating new and relevant businesses opportunities. In particular, efforts must be made to recognize successful pilot projects in ICT ODA and continue these projects as large-scale projects, be it a grant or concessional loan. It should be noted that Vietnam has taken a large amount of concessional loans from the World Bank for its ICT sector. In this context, South Korea’s ICT ODA program can also be used to create a foundation to aid its companies in entering the Vietnamese business market. In order for this to happen, it is imperative to improve operational system for ICT ODA’s and to increase the amount of ODA. Finally, the demand for the ICT application in other fields including education and health is expected to increase in the future. It will be desirable to create linkage for ICT with various other fields and find ways to improve in terms of providing proper systematic support, post-management and maintenance.

 

Aiming at strategic and effective aid delivery, the Korean government has established and implemented its first Country Partnership Strategy (CPS) for each of the 26 priority partner countries. As most of the first Country Partnership Strategies are set to expire by 2015, it is essential to conduct a comprehensive evaluation and draw lessons on the CPS framework and operations before formulating the next CPS. The current CPS system, however, lacks to some extent a tool for result-based management or an evaluation framework, which makes it difficult to fulfill comprehensive assessments of CPS for all 26 partner countries within the next one or two years. In order to assure the effectiveness of Korea’s aid delivery through CPS, it is necessary to examine the achievement of current CPS and identify areas for improvement.
Against this backdrop, this study is based on timely recommendations that seek to elicit policy implications to improve the CPS framework and ultimately to enhance aid effectiveness, by examining the CPS and its implementation status with Bolivia as a case example. Bolivia is one of the poorest countries in Latin America with severe poverty gaps and inequalities in income distribution. Chapter 2 discusses the development environment and needs in Bolivia; and the prospects of and challenges facing the national development plan the Bolivian government has implemented. Chapter 3 presents case studies of major donors in Bolivia, analyzing their cooperation strategy documents and practices with particular focus on the purposes of CPS, as well as its usefulness and limitations. In Chapter 4, after a detailed review of the contents of Korea’s CPS for Bolivia and its implementation status, the study identifies the assessment criteria based on the implications drawn from earlier analyses, and examines whether the CPS fulfills the criteria, namely the purposes for which the Korean government establishes and operates the CPS. Chapter 5 discusses ways to improve aid effectiveness in Bolivia with emphasis on enhancing strategies for formulation of CPS and developing new modalities of ODA implementation.
The major donors analyzed in the study include five bilateral donors, i.e. Japan, Spain, Switzerland, Denmark and Canada, and four multilateral organizations, i.e. Inter-American Development Bank (IDB), the World Bank, UN agencies and EU. The analysis suggests that the core function of CPS is to confirm the legitimacy of development activities with CPS as an official cooperation framework mutually agreed by both donor and recipient government. To provide useful guidelines in policy consultation with the recipient government, CPS should stipulate clear goals and implementation strategy for each priority sector. Another important function of CPS is the coordination of roles and activities among various actors of the donor country; therefore, CPS is required to include all relevant domestic stakeholders in order to coordinate and monitor overall development activities in the recipient country.
Korea’s CPS for Bolivia lacks clear goals or concrete implementation strategies. Although the CPS specifies three priority sectors, namely transportation infrastructure, health and agriculture, it is not very clear on what ground the three sectors were selected as priority sectors or which indicators can be used to measure achievements. It includes EDCF and KOICA as main agencies for implementing the CPS but does not mention other ministries or agencies that are carrying out development projects in Bolivia, so it is difficult to expect coordination or overall monitoring of development activities being implemented by Korean actors. In addition, it is difficult to claim that the CPS for Bolivia gives full consideration to the unique characteristics of Bolivia, as its action plans or implementation strategies are virtually same with CPS for other countries. The CPS document itself has limitations in fulfilling the purposes of CPS which the Korean government claims to pursue through CPS, such as strengthening integrated strategy, coordinated implementation and strong result-based management system.
In practice, Korea is developing and implementing a number of projects according to the priority sectors specified in the CPS. Although the assessment of achievements would be limited until the ongoing projects that were initiated recently are completed in a few years, it should be appreciated that Korea has developed a close relationship not only with the Bolivian government but also with many other development agencies in such a short period since its establishment of a local office in 2010. In particular, Korea has been appointed as co-chair of the GruS (Group of Partners for the Development of Bolivia) starting in 2016, which shows the well-respected status of Korea in the field of development cooperation in Bolivia.
Based on the analyses of major donors’ and Korea’s CPS operation in Bolivia, the study draws the following implications for Korea’s current CPS system.
First, Korea’s CPS lacks a feedback mechanism which enables the results from the country strategy evaluation to be reflected in the next strategy. In order to improve aid effectiveness by implementing the CPS, it is required to that lessons be drawn through an evaluation and identify areas for modification in the strategy, which would provide the foundation for formulating the next CPS. For this, it is essential to specify measurable goals with verifiable indicators in each priority sector and concrete implementation strategies to realize the goals.
Second, implementation strategies in CPS should be devised with a full consideration of unique characteristics and risk factors of the recipient country, so that the stakeholders concerned can refer to the CPS as a useful guideline for their aid activities in the country. For example, an implementation strategy in the current CPS such as ‘to review the possibility of utilizing the Bolivian governmental system’ should be further elaborated to address what the Bolivian governmental system is like, how this system can be utilized in implementing a project, and so on. As for ‘promotion of the Public-Private Partnership (PPP)’, the strategy should be more concrete and practical, providing information on the PPP environment in Bolivia and the current status and prospects of Korean private sector’s involvement in the country.
Third, CPS should encompass all relevant ministries and other agencies, in addition to the two major agencies, EDCF and KOICA, to coordinate activities among different actors involved in development cooperation. Furthermore, it is desirable to clarify roles and responsibilities of each ministry or agency in implementation strategies. For instance, specification of implementation strategies and tasks at government-wide, headquarter or local office level should be made so that respective ministries/agencies can establish their own operation plans based on the implementation strategies in CPS and carry out the plan with a sense of responsibility. This will in turn enhance the overall effectiveness of CPS implementation while contributing to alleviation of the fragmentation problems.
Finally, the study suggests ways to improve the CPS formulation and management at government-wide, headquarter and local level. It especially proposes that the Prime Minister’s Office play a central role in devising enhanced ‘formulation guidelines for CPS’ as well as collecting, updating and monitoring operation plans which the relevant ministries/agencies establish in line with CPS. The study also emphasizes the importance of strengthening the foundations of development activities at the local level and capacity building of human resources in the local office by accumulating field-based knowledge and experiences.

 

The government of Korea selected 26 countries as major development partners and formulated Country Partnership Strategies (CPS) for these countries. To improve the implementation performances of the CPS, it is necessary to evaluate the results. However, the only performance evaluation framework for a mid-term review has been made in 2013. This research aims to derive the comprehensive and systematic ways to improve the implementation performances of CPS for Sri Lanka. Since the first CPS for Sri Lanka covers the period from 2012 to 2016, it is difficult to evaluate the implementation performances rigorously. However, it is necessary to prepare the 2nd CPS for Sri Lanka by reviewing the development demands of Sri Lanka and finding effective ways for implementation.
Chapter 2 examines the development demands of Sri Lanka based on the national development plan (Mahinda Chintana) and governance structure. Chapter 3 analyzes the CPS of major donor groups and elicits important implications. Chapter 4 summarizes the key contents of Korea's CPS for Sri Lanka and analyzes the implementation performances by using the evaluation framework. The analysis mainly focuses on relevance, efficiency and effectiveness. Chapter 5 suggests main areas of Korea's aid for Sri Lanka. The main results of the research are summarized as follows.
According to Mahinda Chintana, the government of Sri Lanka formulated specific development plans including the following key areas; ① expansion of national infrastructure, ② development of rural areas and productivity improvements in the agricultural sector, ③ productivity improvement in both the public and private sectors, and ④ education and health sectors. Korea selected ① economic and social infrastructure (improvement of road, development of hydro resources and renewable energy), ② human resources development (TVET and secondary education), ③ improvement of governance (improvement of administration system and capacity building of the government sector) as 3 major areas of development assistance for Sri Lanka. These 3 areas are consistent with the development demands of Sri Lanka. However, it needs to be aligned with previous areas in Sri Lanka's development demands within a more specific context. In order to improve the effectiveness of ODA, the particularities of Sri Lanka should be considered when Korea selects the ODA projects/programs.
First of all, in terms of social and economic development it should be considered that Sri Lanka is still recovering from the aftermath of its long civil war. Reconstruction of infrastructure is still in progress and there remain pockets of poverty (especially, in the northeastern areas). Even though rural area development is not a major area in Korea's CPS, it is necessary to expand assistance for rural area development. However, such assistance needs to be comprehensive programs, not independent projects.
Second, development demands, commonly identified with middle-income countries, are increasing in Sri Lanka. Since Sri Lanka is expected to become a middle-income country sooner or later, demands for social safety nets, capacity building for science and technology, and improved public services will increase. As the Sri Lankan government aims to construct a knowledge-based society, Korea needs to increase the IT related projects/programs.
Third, Korea needs to provide more policy consultations. Korea's development experiences would be very helpful because the Sri Lankan government is very keen on expanding the manufacturing sectors for sustainable development. However, the experiences of Korea cannot be applied to Sri Lanka directly. It is necessary to localize (or modify) these experiences by allowing for the specific circumstances of Sri Lanka.
Fourth, it is necessary to cooperate more actively with the development partners for harmonization. Since there are leading development partners for each major areas and the ownership of Sri Lankan government is strong, the information sharing and prior consultations with the development partners would increase the effectiveness of ODA. Even though the activities of the Development Partners Forum (DPF) are not satisfactory at this moment, KOICA and EDCF need to participate more actively in this forum.
Fifth, it is necessary to prepare an exit strategy. The relations with Sri Lanka will likely change from a recipient-donor to economic cooperation partner. In order to strengthen the basis for cooperation, it is necessary to expand private sector development and invitation training programs.
CPS of major donor groups also provides meaningful implications for Korea. For example, CPS of Japan has rolling plans and emphasizes economic cooperation through aid. Australia emphasizes aid harmonization and actively uses local experts from the private sector. On the other hand, MBDs (such as ADB and World Bank) are clearly focusing on the demands of Sri Lanka and their implementation process is systematic. ADB recently adopted Multitranche Financing Facilities (MFF) as aid modality, which emphasizes the sustainability of large size long term project/program, participation of recipient country and co-financing of other donor groups. World Bank is actively communicating with the stakeholders and regards consultation process as an important step. Risk management and flexibility are also emphasized by the World Bank. UNDP recognizes the importance of exit strategy for sustainability. These characteristics of other donors' CPS need to be reflected in Korea's CPS and its implementation.
To improve the implementation performances of CPS, Korea needs to ① select proper major assisting areas, ② strengthen the linkages with the private sector including PPP, ③ strengthen the linkages between grants and loans, ④ improve the predictability of aid by expanding rolling plans, and ⑤ improve aid harmonization.

 

In the 2000s, there have been noticeable changes in world economy, international financial market and international specialization system. The importance of the US is declining in world economy and trade. The reorganization of international monetary system has been discussed based on the US dollar decline phase, increasing importance of other countries except the US in international financial transactions and trade, and limits of currency system focused on US dollar. These changes insist that analyzing impacts of US dollar exchange rate only on the trade be insufficient. Also, with the progress in the international specialization, interrelations among countries are emphasized. Therefore, the necessity of new analyzation on the relationship between exchange rate volatility and Korea’s trade.
This study discusses evaluation of influence of the exchange rate of Korean won to yuan, yen and euro on competitiveness in exports of Korea and policy implications. The main works and results of this study are as follows. Chapter II describes changes in economic and political environment that make Korea’s current exchange rate policy based on dollar insufficient. Chapter III analyzes the impact of exchange rate on Korea’s trade and trade balance by each major currency and industry. Chapter IV provides the transition of exchange rate system of Korea and indicates that exchange rate determined by the current system has fundamental limits to recover the balance of foreign transactions. In chapter Ⅴ, we suggests summary of the findings and some policy implications.
To be specific, US dollar decline phase due to global imbalances happened. The importance of the US is overwhelmed by China in the trade environment of Korea and various currencies except US dollar, such as yuan, euro and yen are emerging as settlement currencies. The necessity of analyzing international trade conditions based on Global Value Chain is increasing. Therefore, it is required that evaluation of influence of the exchange rate of Korean won to various currencies on competitiveness in exports of Korea.
In Chapter III, we analyze the influence of exchange rates of major currencies on total, industrial and regional trade balance of Korea. For exchange rate data, won-euro, won-yuan and won-yen exchange rate as well as won-dollar exchange rate are used and we analyze the impacts of each exchange rate on balance of trade. VAR model is employed and the results can be summarized as below. First, won-dollar, won-yuan, and won-yen exchange rate has greate influence and won-euro exchange rate is following them. In the previous studies won-dollar exchange rate was suggested as the most important factor, however recently won-yen and won-yuan exchange rate are considered as important as won-dollar exchange rate . Second, the one standard deviation shocks of won-yen and won-dollar exchange rate on trade balance of Korea are found to be similar. Since 2013, the range or revaluation of won-yen exchange rate has been larger than that of won-dollar exchange rate and the revaluation of won-yen exchange rate exerts negative influence on trade balance of Korea. Lastly, according to variance decomposition, not only the Won/Dollar but also Yen/Dollar exchange rates have significant impact on the Korean economy.
In Chapter IV, since the Won-Dollar exchange rate is the most stable, it makes sense that the current exchange rate system is reasonable. According to cross-correlation between each exchange rate and current account balance (trade balance), the change in each exchange rate has limits to recover the balance of foreign transactions. Also, a comovement-analyzation using DCC-GARCH, Korea Won-Dollar exchange rate is affected more by volatility of Dollar’s value in the international financial market than trade balance (or, current account balance) of Korea. This implies that rebalancing ability of the current exchange rate system is insufficient. We suggest improvement plans for above mentioned problems as globalization of Korean Won, regional monetary cooperation and diversifying the vehicle currencies.
In Chapter V, we suggest improvement directions considering the above results. First, won should be globalized. Globalization of won helps to determine exchange rate more favorable to market. Also, supply and demand of won besides that of foreign currencies can affect exchange rate and it helps to improve the political influence on stabilization of exchange rate. Second, financial infrastructure, such as cross-currency market, regional monetary system, is needed to respond the increasing importance of major currencies. Third, systemic approach for effective management of current account is required. Policy means, such as improvement of overseas investment, cooperation with the central bank, regional monetary cooperation, can be recommended and building up a system for effective utilization of them.  

 

Soon after Vladimir Putin secured his third term as Russian president, the Russian government established for the first time the Ministry for the Development of the Russian Far East in May 2012. In addition, a national program called the ‘Socio-Economic Development of the Far East and the Baikal Region’ was adopted in March 2013. Then the program was completely revised and transformed in 2014. From this one can witness Russia’s unprecedented interests in developing the Far East and the Baikal region. This study systematically analyzes the development of the Far East and the Baikal region and presents detailed policy responses while taking into account the geopolitical and geoeconomic significance of the region.
The security situation in the Russian Far East and the Baikal region remains fragile due to their close proximity to Northeast Asia which exhibits a degree of strategic instability. In addition, these regions represent links that connect Russia to Northeast Asia geopolitically. From a geo-economic perspective, the Far East and Baikal region are viewed as underdeveloped areas located close to rapidly growing Northeast Asia and the Asia-Pacific area, in addition to being resource-abundant regions. The development of the Far East and the Baikal Region has several geopolitical and geoeconomic significance as follows. First, from the Russian perspective, it can strengthen the role of Russia as a Eurasian superpower and become a new growth engine for the sustainable economic future of Russia. Second, from Korea’s standpoint, the region is important in that it can be a medium for enhancing opportunities to engage in geopolitical cooperation with Russia and build a new growth base outside the national territory. 
Russia’s development policy can be divided into two aspects: the ‘plan(program)’ and ‘institutional mechanism’. First, the ‘plan(program)’ is essentially based on the ‘Strategy for the Socio-economic Development of the Far East and the Baikal region until 2005’ which is in accordance with the government program that was adopted in March 2013, and revised in April 2014 called ‘Socio-Economic Development of the Far East and the Baikal region’. Regarding this ‘plan(program)’, three sub-programs which include two existing federal target programs are currently being implemented. Second, ‘institutional mechanism’ is identified with implementation of preferential law and institution. The details are as follows: 1) the establishment of the Ministry of the Far East Development and expansion of its authority, 2) in addition to the already-existing ‘OJSC Far East and Baikal Region Development Fund’, formation of ‘Dalny Vostok’, ‘Agency for Investment Attraction and Export Support in the Russian Far East’, and ‘Agency for Human Resource Development’ followed to promote expansion in the Far East related institutions, and 3) enactment of preferential tariff law, establishment of 14 ‘zone of advanced socio-economic development’, extension of the time period for Special Economic Zone in Magadan Oblast, and the formation of Vladivostok ‘Industrial-production’ Special Economic zone.
The Far East and Baikal region development policy is regarded as a paradigm shift from conventional policy for the following reasons. First, the notion is based on ‘a leading role in development strategy’ instead of previous ‘catch up development strategy’ for the Far East and Baikal region, focused on aligning industries with an efficient market, and it aims to develop export oriented industries in the Asia-Pacific region. It is also directed towards the promotion and growth of economic relations with regional countries. Second, innovative methods for federal governance was developed in order to strengthen the institutional aspects of the development plan, including introduction of new laws and institutions to improve investment attractiveness. Third, regarding the finances; a feasible and appropriate federal funding plan was prepared. Fourth, in terms of political commitment, local development through cooperation with the Asia-Pacific countries were publicly declared several times by President Putin. Finally, above all, the institutional mechanisms for the development of the Far East and Baikal region is now guaranteed by federal law and not just by federal government decree as in the past. Previously, the Far East and Baikal development program by federal government decree did not include a systematic institutional mechanism nor did it guarantee legal stability. But Putin’s third term government established institutional mechanisms needed to implement the ‘plan(program)’, and through the federal law, policy measures for preferential tariff, leading development area, public-private partnerships were ensured.  
After reviewing and assessing the cooperation among Korea-Russia and the major economies concerning the development of the Far East and the Baikal region, there are measures Korea can and should take with respect to regional development: first, the region should be made a part of new international division of labor involving production of semi-finished products or components of goods at major socio-economic development zones where a wide rage of preferential treatment is provided, and export of those products back to Korea or a third country for processing into finished products. This is consistent with the Russian government’s policies which aim to foster export-oriented industries and incorporate the Far East into the Asia-Pacific value chain. Second, given the competitiveness of Korea, cooperation in expansion of oil/gas processing and plant construction sectors hold much promise. In particular, since the Russian government is emphasizing the importance of fostering ‘deep processing’ industries in the energy sector, the possibility of cooperation in this area is large. Third, in addition to oil and gas production, cooperation in large-scale infrastructure projects which are the driving force of the Russian economy is feasible. Especially, in the case of port infrastructure, Korean firms have a competitive edge in terms of both technology and experience, which means Korean-Russian cooperation is likely to lead to success. Fourth, there is cooperation linked to tri-lateral economic cooperation between the two Koreas and Russia. If the Najin-Hasan project generates a commercially successful outcome, it can become a platform for other projects such as gas pipeline through South Korea, North Korea, and Russia; efforts toward power grid connection and agricultural cooperation will also gain momentum.
To support the cooperation in these sectors, we would like to suggest several measures as follows: holding regular prime ministers’ meetings between the two countries, establishing a partner organization for Far East development and PPP projects, providing support measures for paticipation in leading socio-economic development zones, increasing access to capital through fund platform, offshore banking, and private financing; innovation in methods of providing information while taking into account the needs of information recipients, taking additional step towards multilateral cooperation; and proposals for the trilateral Korea-China-Russia joint research project to interconnect Russia’s ‘Look East Policy’, China’s ‘New Silk Road Initiative’, and Korea’s ‘Eurasia Initiative’.