GRIPS Development Forum Webinar

Aid as Autobiography?
South Korea’s Foreign Aid Allocation inAuthoritarian States

Min Joung Park, PhD
School of Global Service
Sookmyung Women’s University
August 7, 2023

South Korea, Not an Emerging Donor Anymore• The 16th-largest donor on the OECD DAC in 2022
<DAC Members’ Total Spending (2022)>

Still lagged behind in the 0.7% ODA/GNI Target• The 27th-largest DAC donor in relatevie terms (0.17 % of GNI)<DAC Members’ Total ODA as % GNI (2022)>

The fastest growing donor in the OECD DAC (2010-2018)

Source: OECE DAC Statistics

Kept increasing its ODA
during the COVID-19 Pandemic

Source: OECE DAC Statistics

Expected to be a further increase
under the Yoon administration 2022-2026• In 2023, South Korea has had significant budgetary increases to KRW 4.78 trillion, orUS $ 3.7 billion!
→ However, the unprecedented depreciation of the South Korean Won has caused
the total ODA figure in US dollars to decrease.
<South Korea’s Total Development Spending (2018-2023)>

Source: OECE DAC Statistics

Like Japan, a strong preference for Asia
<South Korea’s Spending by Region (2021)>

Korea’s top 20 partner countries in 2021


Source: OECD CRS

Full democracy (0)Flawed democracy (5): Philippines,
Domonican Republic, Ghana,Colombia, Mongolia
Hybrid regime (7): Bangladesh,Indonesia, Kenya, Tanzania,Paraguay, Uganda, Côte d’Ivoire
Authoritarian (8): Myanmar,
Cambodia, Ethiopia, Lao PDR,
Uzebekistan, Vietnam, Egypt,Cameroon

Aid as autobiography?
• From 1945 to the late 1990s, South Korea received US $ 12.7 billion worth ofODA, which has been regarded that it was utilized as a catalyst for development→ mostly loans under authoritarian regimes!
<South Korea Net ODA Flows Spending by Region (2021)>

Source: OECD (2012)

Positive institutional memory towards foreign loans

Japan’s top 20 partner countries in 2021


Source: OECD CRS

Full democracy (1): Mauritius
Flawed democracy (5): India,Philippines, Thailand, Brazil, SriLanka,
Hybrid regime (6): Bangladesh,Indonesia, Kenya, Papua New
Guinea, Morocco, Fiji
Authoritarian (8): Myanmar,Cambodia, Iraq, Uzebekistan,Vietnam, Egypt, Afghanistan, Jordan,

Canada’s top 20 partner countries in 2021


Full democracy (0)Flawed democracy (1): Ghana
Hybrid regime (5): Bangladesh,Senegal, Nigeria, Ukraine, Tanzania
 Authoritarian (13): Ethiopia, MaliIraq, Mozambique, Syrian ArabRepublic, Democratic Republic ofthe Congo, Lebanon, Burkina Faso,Yemen, Sudan, Afghanistan, Jordan,
Haiti* No data: South Sudan
Source: OECD CRS

A clear increase of ODA to authoritarian regimes!
<Country allocable ODA flows from all official donors (2010-19)>

Source: OECD (2022), ODA by regime context

Authocratisation does not tend to be met witha decline in overall ODA, but rather the contrary!
<Top 10 autocratisers’ ODA flows from all official donors (2010-19)>

Source: OECD (2022), ODA by regime context

Currently, the regime type does not appear to weighon donors’ ODA allocation decisions!
Contrary to expectations and/or rhethoric that foreign aid can be a catalyst for
spreading democracy and human rights, the number of authoritarian regimes (69 in2010 → 75 in 2019) and the ODA volume they’ve received have increased over thepast decade.

However, countries in the process of democratization tend to receive more ODA,
such as for governance support.

Regime type in the pattern of ODA distribution → Not significant!
- It shows the limitations in reflecting the political system of recipient countries into
ODA allocation decisions, due to the international political dynamics, the pursuit ofinterest-driven foreign relations, and the need for humanitarian assistance.

Not the regime type, then?
Korea’s solid focus on LMICs<South Korea’s Spending by Income Group (2021)>

66% of Japan’s bilateral ODAsupported LMICs in 2021!
<Japan’s Spending by Income Group (2021)>

Whereas, Canada’s focus on
Humanitarian Assistance<Canada’s Spending by Income Group (2021)>

The legacy of developmental state inSouth Korea’s Development Cooperation Sector
New Administration’s International Development Cooperation Policy
Direction (published in June 2022)

Keep increasing its ODA volume → the 10th largest-donor (currently, the 15th)
Contribute to the realization of universal values, e.g. SDGs, human rights, peace→ “global pivotal state”
 Enhance private sector efficiency through regulatory reform in DC; Provide consulting to
the private sector based on industry-specific needs analysis, e.g. finance, green-bio, ecofriendly production → fostering private sector engagement in DC
 Promote large-scale infrastructure projects through blended finance using loans→ enhance institutional basis for Korean business’s global expansion
 Pilot new forms of projects using the innovative technology of the private sector andtheir ESG activities → promoting the brand image of Korean companies

The South Korean developmentalist aid will be furtherstrengthened.
The old state-business alliance established during the times of the developmental stateis highly likely to be further strengthened in the development cooperation, similar to theLee Myung-bak administration (2008-2013).
A preference for concessional loans as opposed to grants, tying ODA with commercial
interests and industrial politics, and less involvement of civil society will be reinforced →widening a gap from “best practices” formulated by the traditional/European donors“Value-based diplomacy” with a focus on promoting freedom, peace, and prosperity
based on its liberal democratic values and cooperation rather remains diplomatic
rhetoric.

[Remaining Questions]→ To what extent will value-based diplomacy of the Yoon administration affect the ODA
allocation to authoritarian/hybrid regimes?
→ Will there be a real policy competition between value-based aid and developmentalist aid
within Korea?