Hong Sung-Gul Professor /Department of Public Administration

 In May 2010, Korea joined the DAC (Development Assistance Committee) of the°°OECD (Organization of Economic Cooperation and Development). It was not just another international organization to join because Korea was the first country ever to become a DAC member among the once recipient countries. Truly, Korea’s economic success is viewed as a best example for all developing countries. Because the international status of Korea has been upgraded due to its outstanding economic performance, it is logical for it to become a donor nation. Also, Korea is somewhat responsible for repaying the assistance that it received as a recipient country in the past.
There are two types of international aid; one is Official Development Assistance (ODA), which is provided free of charge; and the other is the Economic Development Cooperation Fund (EDCF), a loan which is supposed to be repaid in the future. The latter is usually long-term loans with very low interest rates (1% per year) to reduce the repayment burden of the recipient country. In Korea, all ODAs are taken care of by the Korea International Cooperation Agency (KOICA), and all EDCFs are taken care of by the Export-Import Bank of Korea. ODAs can also be classified as bilateral or multilateral assistance. Bilateral assistance is that which is provided between a donor and a recipient country. Multilateral assistance is aid provided by any international organization to recipient countries. As of 2009, about 70% of Korea’s ODA was bilateral.
Countries provide development assistance to poor and developing countries for a number of reasons. China, for instance, is not a member of OECD DAC, but it gives huge aid to countries in Africa and Latin America in order to acquire natural resources. On the other hand, ODAs are geared more toward helping poor countries without expecting anything in return. Officially, ODAs are provided to reduce absolute poverty and to encourage sustainable economic development in the recipient countries. The world population under the absolute poverty level is estimated to be about 1 billion, which means that one out of six people still lives for $1.25 a day.
Since its first ODA was introduced in 1991, KOICA has played a major role in implementing ODA projects, but in recent years, many ministries and local governments also provide their own ODAs through their own bilateral channels. This has created problems in efficiency and effectiveness in conducting national ODA policies. Realizing this problem, the Prime Minister’s Office created a Committee on International ODA in 2010, which is supposed to coordinate all ODA policies at the central and local government levels.
In 2009, the total amount of Korea’s ODA reached $0.82 billion, which was roughly equal to 0.1% of its GDP. Surely this is not a small amount, but the relative position of Korea among DAC members is near the bottom, 19th out of 25 countries. The United Nations recommends that advanced countries provide 0.7% of their GDP as ODAs, and the average ODA/GDP rate of DAC countries is 0.31%.
This indicates that Korea should increase its ODAs in the years to come. The government announced that it will increase the ODA/GNI ratio to 0.15% by 2012 and to 0.25% by 2015. If this is realized, Korea’s budget for ODA will increase from less than $1 billion to about $3 billion in just four years. This means that there will be lots of business opportunities in ODA areas, and job opportunities as well.

After all, I strongly suggest that university graduates and young people in general think seriously about this increase of ODA budgets for their personal career development. The world is in front of you, and it is your decision whether to reach for it or not.

sghong@kookmin.ac.kr