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History of Korea’s ODA

From the time of its liberation from Japanese colonial rule in 1945 until the late 1990s, Korea received a total of USD 12.7 billion in foreign aid. From 1945 through the 1950s, it was one of the poorest nations in the world, and the international community’s targeted assistance provided a foundation enabling Korea to take a giant leap forward in economic development. The assistance provided to Korea varied depending upon its conditions and ranged from emergency relief to structural adjustment programs – all of which contributed to socio-economic development in Korea. For this reason, Korea’s effective use of foreign aid has made the nation a good example of successful assistance that catalyzed socio-economic development.

Even while Korea was still receiving assistance from the international community in the 1960s, the country was in fact at the same time also playing a role as a donor. In 1963, Korea administered an invitational training program for developing countries for the first time. Afterwards, it provided supplies and funds and dispatched experts overseas to share Korea’s development experiences while heightening its national status on the global stage. In the background of rapid economic growth in Korea, the Ministry of Foreign Affairs secured an aid budget of KRW 900 million in 1977, in an effort to respond to the rising demands for ODA from developing countries. After having launched its program of grant-type aid by donating equipment and machinery to developing countries, the Korean government began to carry out ODA using its own funds and continued to expand its ODA budget.

The Korean government laid a foundation for systematic delivery of its ODA through the establishment of government agencies dedicated to delivering the related grants and loans. In 1987, the Ministry of Economy and Finance allocated KRW 30 billion for the government’s loan program, and established the Economic Development and Cooperation Fund (EDCF), whose operation was entrusted to Korea Exim Bank (KEXIM). In 1991, the Korea International Cooperation Agency (KOICA) was established under the Ministry of Foreign Affairs, dedicated for delivering grants. After Korea became the 29th member of the OECD in 1996, the Korean government continued to rapidly increase the scale of its ODA provision to a level that befits Korea’s international status as the first developing country to have joined the ranks of advanced countries.

In the 2000s, Korea’s national profile on the global stage moved up once again as the government’s role in pursuit of international agendas, including the Millennium Development Goals (MDGs) and sustainable development became more pronounced than ever. In 2010, Korea became the 24th member of the OECD DAC, while also hosting the G20 Seoul Summit and playing a leading role in adoption of the Seoul Development Consensus. In 2011, Korea hosted the fourth High Level Forum on Aid Effectiveness (HLF-4) in Busan, and once again played a leading role in the establishment of “the Global Partnership for Effective Development Cooperation (GPEDC)”, a platform for bringing together all development actors in an inclusive manner. Since 2014, Korea has organized the Global Partnership Forum on an annual basis to contribute to the effectiveness of global development and strengthen the role played by the GPEDC in development cooperation.