Following in their footsteps, domestic conglomerates like Samsung and Daewoo started investing in film financing and video production. Korea’s experience above illustrates an important lesson for economic development. Properly structured development institutions can be a potent agent of change for private sector investment, drive growth, and forge inclusive societies. It can do a lot of good. But in reality, the real challenge is how to replicate the key factors that contribute to the success, and to achieve this more consistently across different political, economic and social contexts. With this in mind, let me outline the crucial factors that might help us understand this phenomena: a. First, a mindset shift to contribute more broadly to catalyse new growth areas; b. Second, the need to strengthen accountability frameworks; c. Third, the continuous cultivation of a strong culture of innovation; and d. Fourth, a robust corporate governance. Stepping up to the plate by further developing the non-lending roles More than ever, development financial institutions need to step up to promote new growth areas. They should perform a broader role to stimulate economic activity that would not otherwise take place. They could also improve the quality and scale of such activities. They can provide unique value propositions in terms of advisory and nurturing new growth sectors to become profitable and thus, attractive for private investors. I will highlight two successful examples. Firstly, in the Korean Wave example, they were the first to spearhead investments in the film and music industry.

The lessons we learnt imply that leaders must recognise and align their priorities to steer their respective institutions to contribute more broadly and strategically to economic development. This will include playing a more active role in technical assistance, and serving as key repositories of specialist knowledge, resource aggregators for strategic development projects and credible advisers to the Government. These ‘additionalities’ are important ingredients in ensuring the effectiveness of development financial institutions. Strengthen accountability frameworks through performance standards that emphasise development additionalities While the notion of additionalities is not new, their link to how the development institutions are managed and governed remains generally weak. As a result, their important contributions are often not translated into tangible outcomes that are seen and felt by the stakeholders and the public at large. This leads me to my second point. Traditionally the achievements of development institutions have always been measured predominantly by the volume of financing provided to the targeted sectors. There are several reasons for this. Non-financial development additionalities are harder to quantify the cause and effects are also not always clear. As such, more effort and investments are required to collect the data for measuring socio-economic and development outcomes that are associated with such programmes. However, this must not hold back efforts for us to do better. They are a major channel for directing development, both at an international and domestic level. It is therefore, imperative that there is confidence in the effective and efficient use of funding aid to achieve the intended development goals.