After CIDA and AusAID, is KOICA next?

Five years after gaining entry into the Overseas Economic Cooperation and Development’s aid donor club, South Korea remains firmly on course to increasing its official development assistance. But it is also set on aligning its aid agency’s operations more closely with its national policy. In 2013, the Asian donor disbursed $1.74 billion in net ODA, which accounted for just 0.13 percent of its GNI that year. Seoul intends to grow its development assistance to 2.38 trillion Korean won ($2.2 billion) this year, up 10 percent from 2014’s $2 billion in ODA — a modest figure in real terms compared to other aid donors, like the United States and Japan, but one of the biggest in terms of growth rate. It will not be able to meet its goal of growing its aid to more than 0.25 of gross national income by the end of this year, however — the target Seoul set for itself when it became a member of the OECD’s Development Assistance Committee. The global target for all OECD-DAC members is 0.7 percent of GNI. Only a handful of European countries have met this demanding figure, including Luxembourg and Denmark. Initial data reveals that the majority of South Korea’s development assistance for 2015 — or about 46 percent — will go to the Asia-Pacific region, with a particular focus on the transportation, education, health care, energy and governance sectors. Africa is a priority as well (17 percent). In addition, the Asian donor renewed commitments with some partner countries in Latin America. The country’s aid agency Korea International Cooperation Agency, on the other hand, will be receiving 647.6 billion Korean won this year, with majority of the money going to global programs and assistance to international organizations (39 percent). Assistance to Asia-Pacific and Africa follows at 21 percent and 16 percent, respectively. “This year is a particular year because we are going to face in 2015 some important decisions including [the] post-2015 development agenda, financing for development and COP21,” Sooyoung Park, KOICA’s ODA research team director, told Devex. “The government [has started] to review and renew the midterm strategy … to better adopt the post-2015 agenda and [the] means of implementation to its policy framework.” KOICA President Kim Young-mok added in a statement obtained by Devex that the challenge for the next 12 months is how to be efficient and effective in pursuing development programs while being innovative in engaging different stakeholders — especially in terms of financing — given that the global environment “will not be so benign” with “ODA’s projected downward trajectory.” “The international community coalesced around a view that development financing needs to be diversified to effectively mobilize resources of the private sector,” he said. Long way to go Although touted as a development success story, South Korea’s journey from aid recipient to donor still has a long way to go. KOICA represents a microcosm of the country’s ODA, and Kim said the agency needs to make a step in the right direction “by making honest and objective assessments on its achievements” while remaining flexible enough to adapt quickly to changes in global development. One of the biggest shifts in the agency’s operations will be to go where the “government’s policy direction” goes — an increasing, albeit much-debated, trend in global development, where governments incorporate development policy into its national foreign policy, as in the case of Canada and Australia. Kim said that aligning such goals will enable the agency to operate in harmony with the government’s plans to increase development programs’ efficiency and effectiveness. “As a public institution, we need to coordinate policies with the National Assembly and government ministries and support policymaking processes of the Prime Minister’s office, the Ministry of Foreign Affairs and the Ministry of Strategy and Finance, which are key government actors in development cooperation,” KOICA’s president explained to Devex. “In doing so, we can anchor our position as Korea’s representative development cooperation platform.” There’s also a need to put Seoul’s development assistance under greater scrutiny, KOICA’s president said. There needs to be better planning, monitoring and evaluation systems in place to weed out inefficiencies and save time and money. Apart from these, the government is expected to formulate a new five-year development cooperation basic plan, which will streamline recipient countries and increase aid transparency; the latter is in line with South Korea’s plan to gain entry into the International Aid Transparency Initiative. Check out more insights and analysis provided to hundreds of Executive Members worldwide, and subscribe to the Development Insider to receive the latest news, trends and policies that influence your organization.