[K Origin Tracker] Ambiguous Korean Origin, Unclear Priorities Between National Interest and Humanitarianism

ODA Status Analysis [K Wonjo Tracker ⑨]
Support Scale and Direction Both Ambiguous
Low GNI Ratio and Scale
Need to Establish a Consistent Aid Model Unique to Korea

Source: ODA Levels in 2022 - preliminary data - Detailed summary note. (Published on April 12, 2023)

2.78 billion dollars

0.17%

This represents South Korea's aid volume and the ratio of ODA to Gross National Income (GNI). Although the aid budget has steadily increased, compared to the 32 advanced donor countries club, both the total volume and the ratio to GNI remain at a mediocre level.

On the 31st, based on OECD statistics, this newspaper visualized the total aid amount and ODA/GNI (%) of DAC member countries in a scatter plot, resulting in this graph. South Korea shows relatively low figures in both total aid amount and ODA/GNI ratio. The ODA/GNI ratio ranks third from the bottom, and the total aid amount is also on the lower side.

The ODA/GNI ratio is one of the important indicators when discussing the "role of advanced countries in the international community." It serves as a standard to see "how much a country helps others in proportion to its GNI size." The United Nations has set the ODA target at 0.7% of GNI. Only five countries meet this target: Luxembourg, Sweden, Norway, Germany, and Denmark. Because of this, the major Nordic countries are regarded as exemplary "advanced donor countries" in the international community and have significant influence within the OECD.

A notable data point is the United States. Its scale in total aid amount is overwhelming, totaling 55.277 billion dollars, far exceeding the average of member countries. However, in terms of ODA/GNI ratio, it is only 0.22%, below the donor group average of 0.3%. The U.S. also does not increase its total aid amount proportionally to its economic size due to a strong trend of "nationalism" and "bloc formation." Japan holds a middle position in both ODA/GNI and total aid amount. Its ODA/GNI is 0.39, and the aid volume is 17.475 billion dollars. In terms of total amount, it pours in eight times the amount of South Korea (2.78 billion dollars). Although it falls short of the UN target of 0.7%, it meets the DAC average.

Low ratio and small scale... ambiguous South Korea

Experts point out that countries like Sweden, Norway, and Denmark have total aid amounts similar in scale to South Korea. Although the amount itself is small, their qualitative indicators are high, and their aid is 100% grant-based. They appeal an image of "fulfilling the role as advanced countries in the international community" with firm goals such as poverty eradication and sustainable growth of developing countries. An international development expert who requested anonymity said, "The direction pursued by Nordic countries in aid is quite similar to the 'global pivotal state' that the Yoon Suk-yeol administration talks about."

Japan, by contrast, is a different case. Its proportion of tied aid approaches half. There is also a lot of tied aid (conditions requiring contracts with donor country companies). While it does not engage in "bad aid" like China, which uses aid as a tool for the Belt and Road Initiative to impose debt on Africa and others, it thoroughly pursues a "commercial and national interest" model. A clear example appears in aid to India. India is a country capable of raising capital through national bonds, yet it provided aid amounting to 27 billion dollars (as of 2019). There are also criticisms that Japan uses ODA as a foothold for its core diplomatic policy, the Indo-Pacific strategy. Because of this, the international development academic community divides ODA into two major branches: the Nordic "humanitarian model" and Japan's "commercial model."

Both policy and execution need separate improvement

The problem with South Korea is that it does not belong to either of these two models. It lacks an independent direction. It practices a "department store-style aid" where all ministries jump into aid policy, execution, and sectors. It cannot be said that it actively adopts the humanitarian model pursued by the Nordic model because the proportion of grant aid is not high. Nor can it be said that it has the economic-commercial model Japan aims for because the total aid volume is small.

This is because the Ministry of Foreign Affairs and the Ministry of Economy and Finance are split, each pursuing fragmented humanitarian and national interest-centered aid models according to different directions and goals. The Ministry of Economy and Finance oversees tied aid, while the Ministry of Foreign Affairs manages grant aid. At the execution stage, grant aid is handled by the Korea International Cooperation Agency (KOICA), and tied aid by the Economic Development Cooperation Fund (EDCF) under the Export-Import Bank of Korea. Policy and execution are separated. The Ministry of Economy and Finance, which prioritizes export promotion and expansion of Korean companies' exchanges through overseas aid, and the Ministry of Foreign Affairs, which prioritizes humanitarian support and national prestige, have different orientations in aid direction. Moreover, 44 ministries participate in grant aid under the Ministry of Foreign Affairs. Including implementing agencies, there are over 100 ODA actors. This structure makes it impossible to strategically set policy priorities and focus selection and concentration.

Experts point out that since South Korea joined the DAC in 2011, to uphold the international development joint goals presented at the Busan High-Level Forum on Aid Effectiveness ? ① ownership by developing countries, ② results orientation, ③ development partnerships, and ④ transparency and accountability ? integration of policy and execution and securing priorities are important. Jae-kwang Han, CEO of Development Alternatives PIDA, said, "For clear policy establishment related to ODA, integration of policies and a consistent system in project discovery are necessary," adding, "It is desirable to integrate grant aid and, in the long term, establish an independent aid agency integrating both tied and untied aid."

This project was supported by the Press Promotion Fund, funded by government advertising fees.

■Infographic Page■

Solar Power and Firewood - Vietnam Ban Laokon Report

(story.asiae.co.kr/vietnam)

What problems does splitting the aid budget cause?

(story.asiae.co.kr/ODA)