Report on South Korea Mission
December 3, 2010
GRIPS Development Forum
An international team visited Seoul during November 22-26, 2010 to study South Korea’s
experiences in industrial development and draw lessons for other developing countries
including Ethiopia and Vietnam1. The mission members were Prof. Kenichi Ohno, Prof.
Izumi Ohno (GRIPS Development Forum); Mr. Berihu Assefa Gebrehiwot (GRIPS and
Ethiopia Development Research Institute); Ms. Nguyen Thi Xuan Thuy (Vietnam
Development Forum); and Ms. Truong Thi Chi Binh (Ministry of Industry and Trade,
Vietnam).
Specifically, the mission studied: (i) Korea‘s economic and industrial policy making
processes in the past and at present; (ii) industrial policy tools and approaches, especiallyfor promoting small and medium enterprises (SMEs); and (iii) Korea’s ODA policy with afocus on its recent initiative for compiling Korean development experiences and sharing
knowledge with developing countries. We had meetings with the government ministries andagencies as well as research institutes and universities (see attachments 1-3 for the mission
details, organizations/persons visited, and information collected). We would like to express
our deep appreciation to all organizations and individuals who kindly received us and sharedvaluable information with us.
Below are main findings of the mission.
1. The policy making process in South Korea
1-1. Five-Year Economic Development Plans (from the 1960s to the early 90s)
Starting from the First Five-Year Economic Development Plan in 1962, the Korean
government formulated seven Five-Year Economic Development Plans between the 1960s
and 90s (until 1996, just before the Asian Financial Crisis or the so-called “IMF” Crisis of
1997-98). These Plans made critical contributions to the realization of rapid growth throughbuilding a national consensus on the necessity of economic development effort and setting
its major directions.
The Economic Planning Board (EPB)2, created in 1961, was a super-ministry equipped with
1

This mission has been commissioned by JICA to compile information on industrial policies in selected
East Asian countries for the policy learning of other developing countries. We visited Singapore inAugust/September 2010 and plan to visit Taiwan in early 2011.
2
In 1994, EPB and the Ministry of Finance were merged into the Ministry of Finance and Economy, which
was later separated into the Ministry of Planning and Budget and the Ministry of Finance in 1999. In 2008,
the Ministry of Strategy and Finance was formed by combining both functions.

1strategic functions such as development planning, national budget management, andmanagement of aid, foreign capital (borrowing), and technology. Headed by Deputy Prime
Minister who chaired the Economic Ministers’ Council and directly reported to the President,
EPB had authority above other ministries and agencies. Policy research institutes,
especially the Korea Development Institute (KDI), established in 1971, supported EPB’s
development planning. Within EPB, the Bureau of Planning was charged with drafting
policies in collaboration with KDI, which provided assessment of international environmentand domestic capabilities, resource availability, growth and other macroeconomic scenarios.
Sectoral plans were prepared by relevant ministries and included in the Five-Year Economic
Development Plan. Preparation of each Five-Year Economic Development Plan took two to
three years.
Notable features of Korea’s development planning were sharp strategic focus based on theselectivity and concentration principle, as well as adaptive implementation accompanied byannual action planning and performance monitoring. Being a resource-poor country, Korea
in the 1960s and 70s focused on three priorities: (i) export promotion to ameliorate chronic
trade deficits; (ii) industrialization by mobilizing human resources; and (iii) wise use offoreign capital and technology. Five-Year Economic Development Plans set targets for
economic growth and mobilized national resources and capabilities toward achieving them.
In implementation, action plans were formulated and then constantly adjusted in response toshifting domestic and foreign environments. Korea thus had a mechanism for flexible andadaptive implementation of the Plan rather than rigidly following pre-defined targets andpolicy tools.
In addition to annual action plans, there were two important monitoring devices: the Monthly
Council for Export Promotion and the Monthly Council for Monitoring Economic Trend, bothof which were chaired by President Park Chung-hee and attended by key government
officials, business leaders, and representatives of financial institutions. The Ministry ofCommerce and Industry provided secretariat functions for the former council which carriedout measures to eliminate impediments to export growth in specific sectors while EPB
provided similar functions for the latter council which analyzed and monitored
macroeconomic performance indicators such as growth, export, and investments.
The role of the Korean government in development planning changed over time. In the
1970s, which was the period of Heavy and Chemical Industry (HCI) drive, the government
intervened directly in the market for the execution of the Plan although the degree of official
involvement varied among industries3. From the 1980s onward, as private businesses grewand economic liberalization proceeded, the government began to play a less direct role.
3

The promotional law targeted six strategic industries including industrial machinery, shipbuilding,electronics, automobiles, steel, and petrochemicals. Among these, the government took full responsibility
for initial investment in the steel industry. Meanwhile, the private sector took the initiative to develop otherindustries such as electronics, automobiles, and shipbuilding, with the government playing a facilitating roleby, for example, assisting with finance and technology acquisition.

2

Korea’s development planning ended with the seventh Five-Year Economic Development
Plan in 1996.
1-2. Presidential Committees (at present)
In present Korea, Presidential Committees serve as a key instrument for economic policy
making. Under the presidential system, every President establishes a small number of
Presidential Committees (up to 4 or 5) to concretize, implement, and monitor the priority
agenda during his five-year term. Each Presidential Committee is headed by a person who
has expertise in the chosen subject and enjoys strong confidence of the President as well as
secretarial support by staff seconded from various ministries.
President Lee Myung-bak, who assumed office in February 2008, established four
Presidential Committees: (i) Future and Vision; (ii) Green Growth; (iii) National
Competitiveness; and (iv) Nation Branding. These committees operate only during his
presidential term. The most important among them is the Presidential Council for Future andVision (PCFV), established in May 2008, which is an advisory body to the President forestablishing national strategies and setting policy priorities (i.e., national strategies and unity,
diplomatic and security issues, the environment, energy and science, industry and economy,and “soft power” leadership). It is chaired by Prof. Seung Jun-kwak, Dean of Korea
University, and has 26 members drawn from academia, NGOs, legal experts, and businessleaders. Vice Ministers also attend the Council. The Council meets on a need basis without
any fixed schedule. PCFV is supported by the Executive Office of the Council, a secretariat
of about 30 staff comprised of seconded officials from various government ministries andagencies. The secretariat is charged with drafting of policy documents, inter-ministerial
coordination, and related administrative works.
The Presidential Committee on Green Growth (PCGG) was established in February 2009 at
the recommendation of the Presidential Council for Future and Vision. PCGG is co-chairedby the Prime Minister and Dr. Kim Hyung-kook, an eminent scholar representing thenon-government sector4. By November 2009, the Committee met six times which werepresided by the President except in one occasion. PCGG adopted the National Strategy forGreen Growth as the highest-level government plan on Green Growth, and set policy
objectives for 2050 and performance indicators for 2020 in 10 key policy agenda points. It
also adopted the Five-Year Green Growth Plan by reviving the past practice of five-yearplanning cycles. This is because Green Growth5 (environmental agenda) is an area where
4

The operation of PCGG is similar to that of PCFV. PCGG consists of 47 members including ministers andrepresentatives from private stakeholders. It is supported by a secretariat of 60 staff comprised of seconded
officials from over 14 government agencies and public and private institutions (see Presidential Committee
on Green Growth, Green Growth Korea’s Choice: Progress Report 2008-09, p.10).
5The objective of the national vision on “Green Growth” is to tackle the issue of climate change,
environmental degradation and the depletion of energy resources. Unlike past approaches, however, green
growth puts more emphasis on sustainable growth while reducing greenhouse gas emissions (Green
Growth Korea’s Choice: Progress Report 2008-09).

3

government must play a proactive role even though the present Korean economy is driven
by the private sector. A large number of government ministries and agencies and publicresearch institutions participated in developing the Green Growth strategy and its five-year
implementation plan. All central and local government institutions are required to develop
their own Green Growth Action Plans which must be approved by PCGG.
One of the ten key policy agenda of the national strategy for Green Growth is ODA-related,namely, “becoming a role-model of green growth for the international community.” To thisend, performance indicators are set to increase the proportion of Green ODA from 11% in2009 to 20% by 2013 and to 30% by 2020. The Korean government has also proposed to
the OECD/DAC to introduce new ODA classification to measure and encourage donor
support to the sectors related to “Green ODA.”
Presidential Committees （Lee Myung-bak Administration））
Vision & Priority
AgendaPresident of the Republic of Korea

Chairman
Co-chaired byPrime Minister

Chairman

Chairman

ChairmanPC.
Green Growth

PC.
Future & Vision

PC. National
CompetitivenessPC. Nation
Branding(Feb. 2009)(May 2008)(Feb. 2008)(Jan. 2009)

Secretariat

Secretariat

Secretariat

Secretariat

about 60 staff(seconded officials
from various govt.
agencies

about 30 staff(seconded officials
from various govt.
agencies)

PolicyMinistry A

Staffing

Drafting, Inter-ministerial coordination, etc.

Ministry B

Ministry C

Ministry D

Ministry E

Ministry F

Implementation

Apart from regular Presidential Committees lasting for the five-year term, the Korean
government set up the Presidential Committee for the G20 Summit in November 2009, a
special committee for preparing the Seoul G20 Summit which took place in November 11-12,
2010. It was chaired by Dr. Sakong Il, who served in the Office of the President as Special
Economic Advisor to the President from March 2008 to February 2009 and then led the G20
Korea Coordinating Committee in the Office of the President, formed earlier in 2009 and theprecursor to the current committee6. This Presidential Committee was temporary but its
activities were intense and received much attention. A separate building was reserved forthis Presidential Committee, a large number of officials were mobilized as its secretariat,
6

Dr. Sakong held a number of key positions in the government, including Minister of Finance (1987-88),
Senior Secretary to the President for Economic Affairs (1983-87), and Senior Counselor to the Minister of
EPB (1982).

4and various consultation meetings and working groups were organized involving academia,
NGOs, donor agencies.
2. Small and medium enterprise policy (also see attachment 4)
The mission asked many SME experts and officials about the effectiveness of SME policy in
Korea. Their opinions were divided, with some seeing positive developments while at least
one expert bluntly put it as a “failure.” The majority seem to agree that the results have been
mixed, policy consistency was not maintained, and the performance of Korean SMEs was
not as good as their counterparts in Japan or Taiwan. However, there are some bright spots
such as the emergence of creative IT companies after the “IMF Crisis” and recent exports of
Korean parts and components to Japan assisted by the Korea Trade-Investment Promotion
Agency (KOTRA). Korea also provides intellectual aid to UAE, Kazakhstan, and othercountries in setting up SME policy and institutions, industrial promotion agencies, and so on.
At end 2007, manufacturing SMEs (employment size from 5 to 299) were 118,506 in number
and occupied 99.5% (establishments), 76.9% (employment), 48.7% (production), and50.6% (value added), respectively, in the total manufacturing sector of Korea.
Korean SME policy has gone through various stages. Its goals have also been varied,
combining job and income generation for the poor, protecting and strengthening suppliers ofparts and components to large corporations, and creation of innovative and independentventure businesses, even to this date. It is our impression that Korean programs to support
SMEs are more numerous and more complex than Japanese.
In the 1960s the basic policy framework was created which included the Korea Federation of
Small and Medium Business (1962), KOTRA (1962), the Kookmin Bank (1963), the Basic
Law on SMEs (1966), the SME Policy Deliberation Committee (1967), the SME Departmentof the Ministry of Commerce, and many others. Many of these tools were modeled after
Japanese policies and institutions.
In the 1970s and 80s the main policy objective was protecting weak SME suppliers from the
exploitation of big chaebols and boosting their competitiveness and productivity. The 1970s
was the period of state-led HCI drive, and it was thought that Korea needed SME producersof competitive parts and components to import substitute industrial inputs. Policies to“systematize” SMEs (have stable business contracts with big buyers) and ensure fairness intheir relations were introduced. Financial supports were enhanced with credit guarantee(1976), technology credit fund (1989), and so on. Highly interventionist measures were also
used to narrow the gap between strong chaebols and weak SMEs. Mandatory loan ratios to
SMEs (30-40%, later 35-55%) were imposed on commercial banks and regional banks, and
23 industrial sectors were first prioritized (1979), then exclusively reserved (1982), for SMEs
in which no big companies could enter.

5After the IMF Crisis of 1997-98, policy weight shifted toward creation of autonomous venturebusinesses with creativity. As a result, a cluster of IT ventures appeared in Seoul’s Kangnam
area and SMEs began to engage in export and outward FDI. In the 1990s annual outward
FDI averaged only a few thousand in number (registration basis) and $1-5 billion in
disbursed investment but these increased to over ten thousand and $23 billion by 2008, of
which SMEs accounted for $5.9 billion (before declining in 2009 due to the global financial
crisis). Outward FDI includes both suppliers moving outside Korea and independent
businesses unrelated to big corporations.
Currently, SME policy is designed at the Small and Medium Business Administration (SMBA,
located in Daejeon City) and implemented mainly by the Small and Medium BusinessCorporation (SBC). SMBA covers all SMEs, small businesses, and micro enterprises. There
are different promotion policies and measures for manufacturing SMEs and others. SBC
targets manufacturing SMEs only. SBC was established in 1979 and has 23 regional offices,four training institutes, and the Korea Business Development Centers. SBC’s supports are
divided into financial programs and non-financial programs. The former includes venturebusiness start-up, loan for commercializing R&D results, new growth industry promotion,industrial structural adjustment, management stabilization, Asset-Backed Securities (ABS)issuance, and assistance for small merchants and industrialists. The latter includes
consulting, training, marketing assistance, global cooperation, and information services.
SBC and KOTRA cooperate to assist SMEs to export or invest abroad in their respective
fields (SBC supporting them inside Korea and KOTRA outside).
Notably, in Korea, financial and non-financial support are integrated in one agency (SBC).
This policy configuration is different from Japan or Malaysia, where SMEs of all sectors, notjust manufacturing, are supported while various promotion measures are implemented bydifferent agencies and organizations.
More than one SME experts remarked that one cause of inconsistency and ineffectivenessof Korea’s SME policy was politicization. Politicians and interest groups use SME support
programs to rally support and win votes in elections, leading to multiplication andoverlapping of similar measures with no strict selection criteria or economic reasoning.
Korean SMEs may have good potential but policy has not been able to realize it fully. In thissense, Korean SME policy may have some resemblance to Japan’s agricultural policy.
Standard productivity tools (5S, six sigma, etc.) are used in supporting SMEs in Korea.
However, terms such as “kaizen” and “shindan” are not known even among the SME
experts and officials whom we met. While many Japanese ideas were imported into Korea,
these Japanese terms were not used as drivers of productivity movement.
3. ODA policy making and institutional framework
Korean ODA, through both bilateral and multilateral channels, is currently about US$0.8

6billion (2008 data; net disbursement basis), or 0.09% of Gross National Income (GNI).
Although this is still small in absolute volume, there is a growing sense of global
responsibility among the Koreans. In an effort to increase its global contribution as an
emerging donor, the government plans to triple ODA by 2015 and raise the ODA/GNI ratio to
0.25%. President Lee Myung-bak himself declared that Korea through international
cooperation would become a guiding light for developing countries in the 21st century. A
symbolic example in this regard is an intensive advance effort to mainstream thedevelopment agenda in the latest G20 Summit in Korea.
Korea’s ODA: 2004-2008

ODA Scale-up PlanClassification

2004

2005

2006

2007

2008

Total ODA

423.3

752.3

455.3

699.1

803.8

Bilateral Aid

330.8

463.3

376.1

493.5

540.7

Grants

212.1

318.0

259.0

361.3

370.2

Loans

118.7

145.3

117.1

132.2

170.6

Multilateral Aid

92.6

289.0

79.2

205.6

263.1

ODA/GNI (%)

0.06

0.10

0.05

0.07

0.09

2012

2015

0.15

0.25

(Unit: million USD, net disbursement basis)
Source: Ministry of Foreign Affairs and Trade, “Korea’s Development Cooperation.”

Similar to (past) Japan, Korea has a dual structure of ODA policy formulation andimplementation. Two key ministries charged with ODA are: (i) the Ministry of Strategy and
Finance (MOSF), which overseas concessional loans administered by the Economic
Development Cooperation Fund (EDCF, located in the Export-Import Bank of Korea) andcontributions to international financial institutions such as the World Bank, ADB, AfDB,EBRD; and (ii) the Ministry of Foreign Affairs and Trade (MOFAT), which has authority overgrant aid and technical cooperation implemented by the Korea International Cooperation
Agency (KOICA) and other government ministries and agencies as well as contributions to
the UN and other multilateral agencies. EDCF and KOICA are the main implementing
agencies of bilateral aid7.
Korea is widely known for its economic “miracle” and its successful transformation from an
aid recipient to an emerging donor in a relatively short period. In November 2009, Korea
joined the OECD Development Assistance Committee (DAC). On November 11-12, 2010, it
organized the G20 Summit in Seoul and will host the OECD’s Fourth High-Level Forum for
Aid Effectiveness in Busan a year later. The Lee Myung-bak administration regards ODA asa key instrument to raise Korea’s soft power and brand-image, and took a strong initiative to7

In 1965, Korea began to provide ODA in the spirit of South-South cooperation by inviting trainees fromother developing countries. In 1982, it initiated the International Development Exchange Program (IDEP).
In 1987, EDCF was established under MOSF to implement concessional loan programs, and in 1991,
KOICA was created under the supervision of MOFAT by consolidating diverse technical cooperation andgrant aid programs.

7

incorporate the development agenda in the G20 Summit which led to the “Seoul
Development Consensus for Shared Growth” and the “Multi-Year Action Plan on
Development”.
Domestically, the Korean government has also started to enhance its institutional frameworkfor providing ODA. This includes the introduction of the International Development
Cooperation Basic Law (enacted in January 2010, effective from June 2010) which
stipulates the fundamental ideals, objectives, and principles of Korea’s ODA. Prior to this,the Committee on International Development Cooperation (CIDC) was established in 2006
to improve policy coordination8. CIDC is the highest-level ODA policy council chaired by thePrime Minister with the participation of about 25 members (6-7 private-sector members, plus
ministers of concerned ministries). It meets about twice a year and deliberates key ODA
policy directions such as priority countries and sectors and the ratios of loans and grants. In
2010, 26 countries have been designated as strategic partner (recipient) countries for
Korea’s ODA (the list of countries is not published).
Below CIDC, there are a Working Committee and a number of sub-committees consisting of
MOSF and MOFAT officials, academia, NGOs, etc. These committees and subcommittees
are charged with formulation of country assistance strategies, ODA evaluation, and otheroperational matters requiring holistic approach (see the figure below). Moreover, every five
years, MOSF and MOFAT are expected to draft the “Basic Plan” for ODA and submit it to
CIDC via the Working Committee. To improve efficiency and transparency of ODA, CIDC
has been given the mandate for ex-post evaluation of ODA policy and projects, and must
submit an ODA evaluation report to the National Assembly by June 30 every year.
Korea’s ODA Policy-Making Structure
CIDC

Medium-/Long-term
Strategy of Korean ODA（Chair: Prime Minister)Working Committee
Discussions

MOSF
EDCF

Working

Related
Ministries

discussions

Working level discussions

Management Council•CIDC: Committee for International Development
Cooperation

MOFAT
KOICA
Board

Working level Network•MOSF: Ministry of Strategy and Finance•MOFAT: Ministry of Foreign Affairs and Trade

Source: Ahn Eungho, “Korea’s Development Cooperation Experience,”paper presented at the fifth JPI-FNF
workshop, October 20108

For the details of CIDC, see “Korea’s Development Cooperation Experience” by Dr. Ahn Eungho, Country
Research Office, Korea EXIM-Bank. This paper was presented at the Jeju Peace Institute-Friedrich
Nauman Foundation for Liberty Joint Workshop, held on Oct. 18-20, 2010.

8

4. The Knowledge Sharing Program (KSP)The Korean miracle in economic and political development has drawn admiration and strong
interest from developing countries. Recognizing its global responsibility and comparativeadvantage of having a relatively recent memory of development9, the Korean government isworking hard to become a bridge between traditional and emerging donors as well as donor
and partner countries. As a new and still small ODA provider, Korea has clearly highlighted
and institutionalized its intellectual aid as the “Knowledge Sharing Program (KSP).”KSP activities are carried out through two channels: (i) MOSF and KDI; and (ii) MOFAT and
KOICA. Both conduct grant-based cooperation and emphasize the knowledge sharing of
Korean development experiences tailored to each developing country.
KSP by MOSF/KDI started in 2004 and contains two main activities: (i) systematization of
Korean development experiences; and (ii) policy consultation with developing partnercountries. KSP initially tended to focus on “knowledge transfer” of what Korea did in the past,
but more recently, its emphasis has shifted to “knowledge sharing” which meansdemand-driven and tailor-made consultation and joint problem-solving with individual
partner countries. Currently, these are carried out by the Center for International
Development (CID) of KDI10.
Regarding the systematization of Korean development experiences, over the next three
years, MOSF plans to create about 100 modules (case studies) of specific policy measuresand tools (e.g., Export Promotion Fund, Export Promotion Committee). Each module will
have about 40-50 pages in English and contain background, options, decision making
process, policy content, assessment, conclusion, etc. In 2010, compilation of 25 modules isunderway with KDI assuming overall responsibility for supervision, coordination, and quality
assurance. Some of these modules are produced by KDI itself (primarily in the areas of
economic development planning, macroeconomic management, export promotion, anddevelopment financing) while other modules are assigned to other research institutes andconsultants (increasingly through a bidding process). Discussion will be general andexamples will be drawn not just from Korea but also from other countries, since Korean
policies cannot be copied directly to other countries with different contexts (however, thisintention by KDI does not seem to be completely shared by all concerned officials andexperts yet).

9

Many of our interviewees stressed that, unlike Japanese or Westerners, Korean officials and experts havegone through initial poverty and subsequent rapid growth so they can understand what poverty is and share
their lessons with other countries from their own experiences.
10
During 2004-09, KSP was carried out by various units within KDI—with the Center of Economic
Cooperation (CEC) of the KDI School of Public Policy and Management providing education and training,
and the Office of Development Cooperation (ODECO) conducting policy research and consultation. In 2010,
CID was established to integrate these activities (as well as North Korea Research Division).

9Policy consultation began in 1982 when Korea offered seminars and tours for developing
countries (under IDEP). These activities were consolidated and institutionalized as KSP in
2004. Policy consultations are normally conducted in a one-year project cycle consisting of
demand identification, policy research, policy consultation, and monitoring and evaluation11.
In the first stage, MOSF conducts demand survey through Korean embassies in about 20
partner countries. Based on its results, Korea short-lists countries with high demand forintellectual support, political will, etc. and visits are organized to hear details from thesecountries. If a decision is made to initiate policy consultation, a joint team is organized(usually consisting of 4-5 experts from the Korean side and relevant officials from the otherside). The Korean team visits the partner country a few times and conducts policy researchand consultation, and the counterparts are invited to Korea for workshops and visiting
relevant institutions, factories, industrial zones, etc. In this process, (retired) senior officials
who have hands-on experiences in Korean development are mobilized to head policy
dialogues. After monitoring and evaluation, the project may continue into the second or eventhe third year with additional topics selected by the partner country.
The other channel for KSP is provided by MOSF/KOICA which started more recently. An
example is policy consultation for industrial development of Algeria implemented by the
Korea Institute for Industrial Economics and Trade (KIET) during 2007-09. This KOICA/KIET
support was initiated at the request of Algerian President to former Korean President Roh
Moo-hyun on the occasion of his visit to Algeria. 13 KIET experts were mobilized to conduct
analyses on six industries (petrochemical, iron and steel, IT, automotive, textile and apparel,and pharmaceutical) and six policy issues (export promotion, FDI attraction, technology,
regional development, human resource, and SMEs). The project included eight (or more)
visits and five workshops. Main counterparts were senior and middle-managers of the
Ministry of Industry and Investment Promotion of the Algerian government.
To link KSP more effectively with KOICA’s technical cooperation on the ground, the KOICA
Research Office in 2010 proposed the “Korean Development Cooperation Model (KDCM)”12
which selected 10 primary sub-sectors and 13 general sub-sectors as priority areas for
KOICA’s KSP. Prioritization was based on supply-side factors (Korea’s experience, technicalcompetency, complementarity with other donors, etc.) and demand-side factors (needs ofpartner countries, applicability, alignment with MDGs, etc.) Among sub-sectors, TVET,
e-government, economic development strategy, integrated rural development, and supply of
stable electricity scored high as Korea’s priority areas. Beginning in 2011, KOICA plans tointegrate KDCM into its operations gradually in the 26 strategic partner countries using
country assistance strategies and sector strategies as key vehicles. To this end, KOICA
11

Examples of policy consultations include Vietnam (support to Socio-Economic Development Strategy
2011-2020); Uzbekistan (development of Free Economic Zones); Indonesia (development of policy
solutions for four high-priority areas); Cambodia (microfinance and public-private partnership development);
and Kazakhstan (industrial-innovative development plan).
12 “The Korean Development Cooperation Model,” by Woojin Jung (Research Office), published by KOICA,
2010.

10

hopes to strengthen the program-based approach and conduct a wide spectrum of
consultations with various stakeholders (governments, NGOs, research institutes, etc.)
In our meetings, several experts noted that the two channels of KSP (MOSF/KDI and
MOTFA/KOICA) are implemented separately without coordination. Since KSP is normallyprovided on a grant-basis, the traditional division of labor between grant aid (MOFAT) andloan aid (MOSF) is becoming less clear in KSP, as the turf of MOFAT/KOICA is increasingly
shared by MOSF/KDI.
Despite this problem, KSP is clearly a focal point for Korean ODA and expanded vigorously
for projecting the Korean voice to the rest of the world. Together with Green Growth initiative
mentioned above, knowledge sharing is regarded as Korea’s strategic attempt to lead global
agenda and design global rules. While Japan has also conducted intellectual cooperation
with many developing countries in various forms and in large quantity—policy dialogues,
drafting sectoral or regional development plans, joint research, industry surveys, seminars
and lectures, study tours and training in Japan, etc.—Japanese effort in this area is lessdocumented and institutionalized, less linked to global development architecture, andtherefore less well known to the rest of the world.
5. OtherDuring this mission, we did not have time to visit SMBA (located in Daejeon City) which is
responsible for overall SME policy and support. Nor did we have sufficient time to visit
Saemaul Undong Center (HQ located in Seoul) and Saemaul Undong Central Training
Institute (located in Sungnam City). Many experts emphasized the contribution of Saemaul
Movement (or New Village Movement), launched in 1970, to the modernization of Korea’s
rural economy—not only through community-based infrastructure and rural-livelihood
improvement projects, but also through mindset and attitudinal changes of the people.
“Can-Do spirit,” a collective confidence-building effort, was encouraged, and three main
values—diligence, self-help, and cooperation—were promoted across the country. Although
Saemaul Movement took place primarily in the rural context, such national movement may
parallel to Singapore’s Productivity Movement in the urban context. These aspects deserve
further investigation.

Attachment 1: Mission details
Attachment 2: Organizations/persons visited
Attachment 3: List of information collected
Attachment 4: Note on Korean SMEs

11

Attachment 1

Mission Details (21- 27 Nov. 2010)
1. Mission Members
Kenicni Ohno

Professor, National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan

Izumi Ohno

Professor, National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan

Berihu Assefa Gebrehiwot
Nguyen Thi Xuan Thuy
Truong Thi Chi BINH

Researcher, National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan andEthiopian Development Research Institute (EDRI), Addis Ababa, Ethiopia
Researcher, Vietnam Development Forum (VDF) / GRIPS-NEU Joint Research Project,
Hanoi, Vietnam
Director, Supporting Industry Enterprise Development Center, Institute for Industry Strategy
and Policy, Ministry of Industry and Trade, Hanoi Vietnam

2. Mission Schedule
DATE
1 Nov 21 Sun
2 Nov 22 Mon
3 Nov 23 Tue
4 Nov 24 Wed

5 Nov 25 Thu
6 Nov 26 Fri
7 Nov 27 Sat

TIME
AM
PM
AM
PM
PM
AM
PM
AM
PM
PM
AM
PM
PM
AM
PM
PM

ACTIVITY
ArrivalKorea International Cooperation Agency (KOICA)
Korea Institute for International Economic Policy (KIEP)
Dr. Thomas Kalinowski, Assistant Professor, Ewha Womans University
Korea Development Institute (KDI)
Korea Institute for Industrial Economics and Trade (KIET)
Korea Institute for Development Strategy (KDS)
Ministry of Knowledge Economy (MKE)Prof. Eun Mee Kim, Ewha Womans University
Korea Small Business Institute (KOSBI)
Korea Institute for Industrial Economics and Trade (KIET)
Small Business Corporation (SBC)
Korea Trade-Investment Promotion Agency (KOTRA)
Prof. Kang Sun Jing, Korea University
Departure

Note:
Among five mission members, Kenichi Ohno, Izumi Ohno (GRIPS Development Forum), Nguyen Thi Xuan Thuy (Vietnam Development Forum)
and Truong Thi Chi Binh are the members of the JICA-commissioned study mission.

12

Attachment 2

Organizations/Persons Visited
The Government /Governmental Organization of Korea
Organization
Ministry of Knowledge Economy (MKE)

NameAhn, Chang-yong
Son, Hoyoung
Kim, Beom Soo

Korea International Cooperation Agency Kim In(KOICA)

Position
Senior Deputy Director, Industrial Economic Policy Div., Office of Industrial
Economic Policy
Director, Planning & Management Team, Planning Office of Free
Economic Zone
Deputy Director, Policy Planning Team, Planning Office of Free Economic
Zone
Managing Director, Research Office

Woojin Jung

Policy Analyst, Policy Research Office

Moon, Sangwon

Manager, Policy Planning Team, Regional Strategy Department

Kang Kongnae

Policy Research Office

Small & Medium Business Corporation

Kim, Yi-Won

Senior Manager, Global Cooperation Dept.

(SBC)

Junghee Baek

Manager, Global Cooperation Dept.

Chung, Ha Rim

Global Cooperation Dept.

Mi-Ho Jon

Director, Business Development Team

Seung-Woo Lee

Manager, Business Development Team

Korea Trade-Investment Promotion
Agency (KOTRA)

Research Institutes / Universities
Organization
Korea Development Institute (KDI)

Korea Institute for International
Economic Policy (KIEP)

Korea Institute for Industrial Economics& Trade (KIET)

Name

Position

Kim, Joo Hoon

Vice President

Kwang Eon Sul

Managing Director, Center for International Development

Wonhyuk Lim

Director of Policy Research, Center for International Development

Kim, Ji Hwan

Specialist, Policy Consultation Division, Center for International
Development

Bokyeong Park

Director, Dept. of International Macroeconomics and Finance

Yul Kwon

Head of Development Cooperation Team, Center for International
Development Cooperation

Kim, Dohoon

Senior Research Fellow

Joo, Dong-Joo

Research Fellow, Industrial Cooperation and Globalization Division

Yang, Hyun Bong

Research Fellow, Small and Venture Business Research Division

Research Institute for Small & Medium
Soon Yeong Hong
Industries (KOSBI)
Korea Institute for Development Strategy
Seung-Hun Chun
(KDS)

Senior Research Fellow
President

Yeon Seung Chung

Visiting Research Fellow

Korea University

Sung Jin Kang

Professor, Department of Economics

Ewha Womans University

Eun Mee Kim

Professor, Graduate School of International Studies

Thomas Kalinowski

Assistant Professor, Graduate School of International Studies

13

Attachment 3

List of Information Collected
SourceMinistry of Knowledge
Economy
(MKE)

Title

Where Business Blossoms, Korean Free Economic Zones

Korea International
Journal of International Development Cooperation, 2010 No.3
Cooperation Agency (KOICA)

Small & Medium Busineses
Corporation (SBA)

KOICA

PPT: Korean Development Cooperation Model (KDCM)

Woojin Jung/ KOICA
Research
OfficeSupporting your Success (English and Japanese)

SBA

Korea Trade-Investment
Korea Trade-Investment Promotion Agency
Promotion Agency (KOTRA)
Korea Development Institute Toward the Consolidation of the G20, From Crisis Committee to Global Steering
Committee(KDI)
Postcrisis Growth and Development, A Development Agenda for the G-20
Economic Growth in Low Income Countries: How the G20 Can Help to Raise andSustain it (Working Paper 2010-01)

Korea Institute for Industrial
Economics & Trade (KIET)

Authors / Publishers

Ministry of Knowledge Economy

KOTRA
Editors: Colin I .Bradford andWonhyuk Lim/ KDI, The
Brookings Institution
Editors: Shahrokh Fardoust,Yongbeom Kim, Claudia
Sepulveda/ The World Bank
L Alan Winters, Wonhyuk
Lim, Lucia Hanmer, andSidney Augustin/ KDI

Center for International Development

CID/KDI

Knowledge Sharing Program

KSP/KDI

Proceedings for The Fourth Workshop for the Industrial Development Plan ofAlgeria, October 20-22, 2007, In Algiers, Algeria

KOICA・KIET

Report on ODA (Korean)

EDCF, EXIM, KIET

Korea Small BusinessInstitute (KOSBI)

Paper submitted to APO Study (selected pages)

Soon-Yong Hong/KOSBI

Korea Institute forInternatinoal Economic
Policy (KIEP)PPT: Changing Landscape of the ASEAN and Korea ASEAN Cooperation

Yul Kwon/ KIEP

Reinterpretation of Korea's Economic Development and Lessons for Developing
Countries (Policy Analysis 07-13) (Korean)

Bokyeong Park/KIEP

Nordic Aid Untying Policy: Implications on Korea's Aid Strategy (Korean)

Yul Kwon, Jisun Jeong/KIEP

Overall Strategy for Korean ODA Reform (Policy Analysis 06-03) (Korean)

Yul Kwon, Han Sung Kim,
Bokyeong Park, Jooseong
Hwang, Sooyeon Hong/KIEP

Korea's Systematic Approach of ODA Policy toward Africa (Policy Analysis 08-19)(Korean)Yong Ho Park/KIEP

Prof. Kang Sun Jing, Korea
University

Presidential Council for Future & Vision (Organization)
Green Growth Korea's Choice, Progress Report 2008-2009Prof. Eun Mee Kim,

Graduate School of International Studies

Ewha Womans University

Cross-National Comparative Analysis of the Effectiveness of Development
Assistance14

Presidential Committee on
Green GrowthAttachment 4

Korean SMEs
Table 1. Definitions of SMEs, Small Businesses and Micro Enterprises
Small
SMEs
business
SectorNo. ofNo. ofCapital/employeemployees
Sales
es
Less thanCapital worth Less than
Manufacturing300$8M or less
50
Less thanCapital worth Less than
Mining, construction and transportation
300$3M or less
50
Large general retail stores, hotel,
Less than
Sales worth
Less thanhospital…
300$30M or less10
Seed and seedling production, fishing,Less than
Sales worth
Less thanServices business support services, etc.
200
$20M or less
10
Wholesale and productLess than
Sales worth
Less thanintermediation, machinery equipment
100$10M or less10
rent for industrial use, etc.
Less than
Sales worth
Less than
Others50$5M or less
10

Micro
enterprises
No. ofemployees
Less than
10Less than
10Less than 5Less than 5Less than 5Less than 5

Source: Small and Medium Business Administration.

Graph 1. Shares of SMEs in Establishments and Employment
%
100
95
90
85
80
75
70
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
No. of firms

Year

No. of employees

Source: Small and Medium Business Administration.

Table 2. Korean SMEs’ Overseas Investment by Region
2006
2007
Total
RegionDistribution
Asia

Number of
Cases

Amount(mil USD)

Number of
Cases

9,148

3,383

85.0%

73.7%

2008

Amount(mil USD)

Number of
Cases

Amount(mil USD)

11,192

5,882

10,408

5,707

81.3%

67.1%

77.9%

65.7%

Middle East

0.6%

1.3%

1.3%

1.1%

1.5%

1.3%

North America

8.7%

14.1%

9.5%

12.0%

11.7%

10.3%

Latin America

1.0%

3.9%

1.7%

6.4%

1.8%

12.1%

Europe

3.1%

5.6%

3.9%

9.8%

4.8%

6.6%

Others

1.5%

1.4%

2.2%

3.7%

2.4%

3.9%

Source: The Export-Import Bank of Korea

15