By Do-Hee Jeong, BASC Research Assistant
South Korea has been the subject of great international attention during the past few weeks. In addition to Yuna Kim’s momentous recording-breaking victory in figure skating at the 2010 Winter Olympics, South Korea took the lead in a joint research project with Japan and China to push for a tripartite free trade deal; started free trade agreement talks with Turkey, Colombia and Mexico; further developed North Korea talks with China; and hosted its first set of meetings for the G-20 Summit this November. But most importantly, Korea embarked upon a new foreign policy direction by announcing an increase in foreign aid during the Global Korea 2010 conference held last Wednesday in Seoul commemorating President Lee Myung Bak’s second year in office. This coincides with Korea’s movement towards greater international leadership as the host nation for the 2010 G-20 Summit.
Although once a recipient of international aid itself, Korea introduced a campaign to increase its official development assistance during the recent Global Korea 2010 conference. In his keynote speech President Lee vowed that “Korea will not spare any efforts” for greater development assistance and urged “reducing development gaps between developing and advanced countries should be an integral theme for the world economy’s sustainable growth.” President Lee hopes to share the unique development expertise that Korea accumulated during its dramatic economic development with other members of the exclusive club of heavyweight international donors in the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD). Korea became an official member of the DAC last November, and as such, has an increasing obligation to extend overseas aid.
In addition, the Lee administration used the Global Korea 2010 conference to showcase Korea’s new role as a global leader by announcing an increased commitment to foreign development assistance. Korea hopes that its rapid development and quick recovery from the financial crisis can serve as examples for currently developing countries. South Korea also plans to expand its economic policy advisory service by increasing the number of advisory-recipient countries. The four current countries include Vietnam, Indonesia, Uzbekistan and Cambodia, but the administration plans to expand to seven countries by 2011 and ten countries by 2012.
Furthermore, the Korea International Cooperation Agency, the government’s main body for official development assistance, has already increased its annual budget by 20 percent this year. The agency’s goals are two-fold: to increase overall contribution level, and to extend more interest-free grants than loans. The agency also plans to expand overseas development assistance to 0.25 percent of its gross domestic income by 2015; assistance currently remains at 0.1 percent (other members of DAC give an average of 0.3 percent). The agency stresses the interconnectedness of today’s world, claiming that the collapse of other countries will have dramatic impact on export-dependent Korea. The agency also emphasizes that increasing overseas aid will help to raise Korea’s international status.
However, these philanthropic efforts are probably not without self-interested motivations. Korea hopes to gain more access to the global market, and the country is actively pursuing a number of bilateral and regional agreements. Foreign aid will provide Korea entry points to many new markets and investment opportunities around the world.
Although Korea has been successful in gaining international attention for its plans to increase foreign aid, whether or not these measures will improve the global status of Korea and further legitimatize its role as a global leader by the G-20 Summit is open to debate. Although these initial steps seem hopeful, the issue of South Korea’s protracted burden of providing North Korean aid, its domestic problems, and the question of whether or not the “Korean” model of economic development can be generalized to other developing countries cast a shadow on the optimism of the Global Korea 2010 conference. Time will allow us to better evaluate these initial steps in Korea’s path to becoming a global leader.