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Striving to Boost Effect of International Aid by Seeking Optimal Combination of Development Grants
KOICA, Leading Aid Provider of Korea
Striving to Boost Effect of International Aid by Seeking Optimal Combination of Development Grants
  • By matthew
  • January 31, 2014, 07:21
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Trainees visited by the KOICA are singing in chorus at the 3rd Global Cultural Festival held at the agency’s headquarters on November 2, 2013.
Trainees visited by the KOICA are singing in chorus at the 3rd Global Cultural Festival held at the agency’s headquarters on November 2, 2013.

 

Since its inception in 1991, the Korea International Cooperation Agency (KOICA) has striven to assist in the social and economic development of less-developed countries by means of programs suiting the needs of the beneficiaries. Specific examples include region-specific cooperation projects, the World Friends Korea (WFK) program, global training sessions in the framework of international cooperation organizations, private-public collaboration, and projects to fight climate change and provide emergency aid abroad.

It has launched 685 projects worth a total of US$1.4 billion altogether in 80 countries during the past 22 years, while sending 22,091 volunteer WFK workers to 67 countries. As of the end of 2013, 1,745 WFK workers were volunteering in 46 countries. Also, it has invited a total of 49,020 public employees from 142 developing nations (4,699 from 110 countries as of 2012) and worked together with 47 international organizations.

Country-specific projects account for 41.7% of the total and are followed by volunteer corps dispatches, which take up 14.3%.

As of 2012, the international official development aid (ODA) market is 130 trillion won (US$120 billion) in size. The Korean government’s ODA budget reached 2.1 trillion won (US$1.94 billion) in 2013, and 540 billion won (US$500 million) worth of grants in the ODA budget was allocated to the KOICA in that year.

In the meantime, its ODA-to-GNI ratio is estimated at 0.16% in 2014. Under the circumstances, the government’s goal to raise the percentage to 0.25% by 2015 is becoming less likely to be met.

“The year of 2014 will be the first year when the significantly-increased ODA budget will be reflected in earnest in the agency’s budget, despite harsh economic conditions and the decrease in tax revenue,” said President Kim Young-mok of the KOICA. He continued, “The high interest in Korea’s role both at home and abroad requires us to be a more transparent, efficient, and dedicated organization.”

He continued to emphasize, “It is also demanded that the government’s ODA structures be integrated systematically, though we cannot be sure about when it will be achieved, and the KOICA has to ensure outstanding capabilities in terms of integrity, creativity, efficiency, effectiveness, data production and management, geopolitical professionalism, and the like, if it is to become the linchpin in this trend.”

The agency announced on January 22 that it will be committed to systemic and business innovation during the course of 2014. It has expressed a strong will to become an entity that spends taxpayers’ valuable money for development aid purposes in a transparent and meaningful way.

It cannot be denied that the KOICA used to move ahead with ODA projects somewhat haphazardly and waste precious financial resources, in spite of the increasing importance of such projects and higher international standing of Korea. Some people are still criticizing that the pre- and post-management of the projects are improper, compromising the prestige of the country in the international community.

2014 Budget Allocation by Project and ProgramThis is why the KOICA is planning to concentrate on the improvement of its aid procurement systems, personnel management structure, organizational transparency, and provision of data for all this year. It is intending to establish more beneficiary-oriented human, material, and systemic infrastructure, while enhancing its aid procurement capabilities so that its development aid services can become even better in quality and equality alike. The personnel management systems are scheduled to be overhauled for more productive, efficient, and professional services, and an integrated ODA information center will be set up to contribute to the international community’s aid transparency, and comply with the demand for public information disclosure.

The KOICA is going to work to expand its budget while increasing the ratio of grant-type and untied aid in the long term. It will take the lead in the implementation of the Busan Global Partnership for more effective aid, and shore up its international partnership to work more closely with advanced and emerging economies. The private-public partnership is enhanced as well for the same purpose.

The KOICA is currently making use of Saemaeul as an ODA brand and spreading the best practices of the global Saemaeul ODA programs based on its accomplishments in beneficiary countries. Adopted to this end are methods such as the strategic selection of target nations and concentrated investment, establishment of tailored action plans, training of Saemaeul experts, and promotion of the philosophy and value by means of international seminars.

In addition, programs demanded by beneficiaries will be fast-tracked for emergency relief abroad, assistance in Korean companies’ overseas market penetration, and the follow-ups of summit and diplomatic talks. This is expected to result in greater effectiveness of aid projects and the maximization of reciprocal interests of both Korea and the beneficiaries.

The Ministry of Foreign Affairs and the KOICA have participated in a large number of international grant aid projects in a variety of fields such as medical and healthcare, education, agricultural development, infrastructure development, and information and communication technology. In doing so, they have accumulated on-site experience in developing nations and established worldwide networks, which will be a boon to the market penetration of small and medium-sized Korean enterprises, too.

In particular, the global demand for ODA infrastructure construction is expected to surge this year, and the agency is mulling over how to promote the participation of small, local firms in bidding for aid projects. Plus, the agency is going to provide more support on the development consulting side so that the companies can enjoy some advantage in follow-up projects. It is planning to move ahead with 61 development consulting projects in 27 countries in 2014, at a combined cost of 39.9 billion won (US$36.9 million). The government is working on its own development consulting promotion plans, too.

Greater synergy effects are also anticipated in conjunction with credit assistance programs as well. Last year, the KOICA announced a plan with the Export-Import Bank of Korea to more closely link credit assistance and grant-type aid programs. The bank provides Economic Development Cooperation Funds (EDCF), as the KOICA handles grant-type aid.

According to the plan, the two organizations will work together down the road to find more aid opportunities in developing nations in the framework of integrated country-specific strategies, which will be set up by both sides. International demand will be surveyed based on cooperation from the very first planning stages, and the optimal ratio between credit assistance and grant-type aid will be sought for the maximization of aid effects.

Trainees visited by the KOICA are singing in chorus at the 3rd Global Cultural Festival held at the agency’s headquarters on November 2, 2013.