Lee Orders Review, Citing "Many Unjustifiable Projects"
Billions Allocated to Cambodia-Korea Friendship Bridge Project
Budget Efficiency Measures Linked to Supplementary Appropriation
President Lee Jaemyung recently ordered a comprehensive review of the nation’s official development assistance (ODA), which is executed on an annual scale of several trillion won, stating at a recent Cabinet meeting that “there are many projects that are difficult to justify.” The government is officially raising concerns about the efficiency of ODA and intends to scrutinize the purpose and transparency of ongoing projects. Unlike the previous Yoon Suk-yeol administration, which significantly increased the ODA budget in the name of global responsibility, the Lee Jaemyung administration is expected to selectively reduce ODA budgets deemed inconsistent with their intended purposes.
According to government ministries on the 24th, the Ministry of Economy and Finance, the Ministry of Foreign Affairs, and the Office for Government Policy Coordination plan to begin a feasibility reassessment of both new and existing ODA projects in the second half of this year, following the president’s directive. An official from the Ministry of Economy and Finance stated, “Although the specific schedule and direction have not been finalized, the focus will likely be on reviewing the feasibility of concessional aid projects that directly lend funds to developing countries and are repaid later.”
There is an interpretation that the government’s move to reexamine ODA is closely linked to controversies surrounding the previous administration’s Cambodia ODA projects and the so-called “Geonjinsageon Jeon Seongbae lobbying allegations” involving Kim Keonhee. Currently, the special prosecutor’s team investigating Kim Keonhee is looking into whether the Unification Church and Heerim Architects & Planners, among others, used Geonjinsageon Jeon Seongbae to lobby former President Yoon Suk-yeol and his wife for Cambodia ODA projects in exchange for favors. The core issue is whether public funds were used under the guise of official aid projects for private interests.
In fact, according to materials submitted to the National Assembly by the Ministry of Foreign Affairs and the Ministry of Economy and Finance, the Cambodia ODA budget more than doubled from 178.9 billion won in 2022, during the Yoon Suk-yeol administration, to 435.3 billion won this year. This year’s ODA budget was deliberated and approved at the International Development Cooperation Committee meeting chaired by Choi Sangmok, then Deputy Prime Minister and Minister of Economy and Finance, in February, just before the new administration took office.
The government plans to independently examine the feasibility of major ODA projects currently being promoted by each ministry, separate from the special prosecutor’s investigation. A representative example is the “Cambodia-Korea Friendship Bridge Construction Project,” a key project of the Ministry of Economy and Finance. This project involves building a bridge and road connecting downtown Phnom Penh to the Kandal region east of the Mekong River. The aim is to improve urban accessibility and revitalize the local economy. This new project was included in the 2023 budget during the Yoon Suk-yeol administration, with a total budget of 298.7 billion won allocated through 2029. According to the government website, based on last year’s grant equivalency, Korea provided Cambodia with $195 million (approximately 268.6 billion won) in both concessional and non-concessional support, making Cambodia Korea’s largest ODA recipient.
For these reasons, there are calls for the government to closely examine issues such as the opaque budgeting and execution of ODA policies, as well as the potential for conflicts of interest involving specific individuals and organizations. Hong Woohyung, professor of economics at Dongguk University, said, “It is particularly difficult to accurately measure whether the funds executed in recipient countries are being used transparently. These chronic problems of ODA need to be addressed.”
Some analysts suggest that, as seen in the recent decision to reduce the existing ODA budget by 7.4 billion won in the second supplementary budget, the government may use this opportunity to improve the efficiency of ODA spending. Given the ongoing massive fiscal deficit, there is a view that it is necessary to review ODA budgets that are relatively less tangible to the public or do not meet requirements for purpose and transparency, such as those related to diplomacy and aid.
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