Basic Direction

While respecting international norms, the Korean government is working to plant seeds of hope across the globe and share Korea’s successful development experience with its partner ountries. To this end, it enacted the Framework Act and its enforcement decree and developed the Strategic Plan (October 2010) and the first, second and third 「Mid-Term Strategy for Development Cooperation (2011-2015/2016-2020/2021-2025)」 to establish a solid institutional basis for its provision of ODA.

New Southern and Northern Asian Countries Cooperation Strategy

Korea is expanding its ODA commitments for the ASEAN countries of India (New Southern countries), Mongolia, and Central Asian countries (New Northern countries) to build upon development achievements while maintaining balance with the country’s key foreign policies of the New Southern Policy and New Northern Policy.
   Notably, it plans to increase its 2017 level of commitments to New Southern countries to more than double by 2022. The New Southern Policy is based on the 3Ps (People, Peace, and Prosperity) of which will drive the development and implementation of the “Five main ODA Programs for New Southern Countries.” Taking into consideration the SDGs, demands from New Southern countries, and Korea’s comparative advantage, Korea is strengthening cooperation with these countries through its brand ODA programs like ▲ digital partnership, ▲ higher education, ▲ peace community program, ▲ smart city development, and ▲ inclusive transport. Korea is also preparing package project, promoting best practices as a business case and co-financing project with private or global agencies for the New Northern countries.

Loan and Grant Strategies

Since Korea’s ODA is operated on the basis of the dual pillars in which the Ministry of Economy and Finance (MOEF) and the Ministry of Foreign Affairs (MOFA) serve as the supervising ministries for loans and grants respectively, the Korean government is devoting efforts to consolidate its provisions of loans and grants to maximize aid effectiveness. The 「Mid-Term Strategy for Development Cooperation (2016-2020)」 underscores the importance of a more unified system for provision of loans and grants, so as to strengthen grant integration and consolidate loans and grants by preventing the fragmentations and duplications in order to achieve the SDGs effectively.
   In line with this policy direction, the CIDC draws up the Annual ODA Implementation Plan based upon implementation plans in both loans and grants through its deliberations. While most grants support social infrastructure in education and public health in developing countries, loans principally support economic infrastructure such as transportation and energy, which require significantly large capital investments. Because of the different roles they play, loans and grants are complementary in nature.

1) Loan Strategy

The SDGs emphasize economic growth, which demands infrastructure development, job creation and industrialization that require large volumes of financing going beyond the existing ODA resources. For this reason, the mobilization of private sector resources has come into the limelight as a crucial means for achieving the SDGs.
   In line with this trend, Korea plans to leverage private sector financing through blended financing (export credit), development financing (concessional loans) and public-private partnership loans (financing of special purpose companies). In support of the SDGs that aim to promote economic growth and address problems of inequality, the Korean government plans to shift its attention from Asia (where Korea’s loans have until now been concentrated) to Africa, and to adjust its specification of priority sectors.
   As a result of a continued scaling up of ODA, the volume of its loans has continued to rise rapidly since 2011. In 2019, over KRW 1 trillion has been spent on loans. To meet the targeted expansion of ODA volume, the volume of loans is expected to continue to expand.

2) Grant Strategy

The primary objective of grants as defined by the Korean government is to promote inclusive development that embraces marginalized and vulnerable groups and contributes to achieving the SDGs in comprehensive considerations of social, economic and environmental development. By stepping up its humanitarian assistance as well as its peace-building efforts in disaster-stricken and conflict-affected regions, the Korean government is promoting peace and prosperity and working to propagate universal values (environmental protection, gender equality, human rights and democracy).
   As a part of this effort, it is improving its grant delivery system to facilitate more effective and efficient program design and implementation in conformity with international trends laid out by the OECD DAC Peer Review recommendations and the Global Partnership for Effective Development Cooperation (GPEDC) reports. While continuing to focus resources on Asia, the government is also gradually increasing its provision of grants to Africa in accord with its 「Mid-Term Strategy for Development Cooperation」. It is gradually increasing its assistance of humanitarian motives by expanding its aid to least developed countries (LDCs) in Africa.
   To better reflect the differing needs and conditions of Korea's partner countries, the government plans to diversify its grant provision. Grants are currently delivered mainly through the following types of schemes: development projects intended to promote national development and reduce poverty through the establishments of essential facilities and infrastructures for social and economic development, supplies of equipment and transfers of knowledge; capacity building programs in which Korea’s development experiences and knowhow are shared with developing country officials and policymakers to develop human resources; and the World Friends Korea (WFK) international volunteer program under which 5,000 international volunteers, specialized in diverse sectors, including education, health, rural development and IT, are sent to Korea's partner countries every year.
   The government is committed to enhancing the effectiveness of its grants by diversifying the forms of the programs. By introducing on a pilot basis program-based projects, in which funds are provided directly to partner countries to help achieve their national development plans and utilizing country systems in partner countries, the government is striving to enhance the ODA ownership of partner countries as well as the effectiveness of its grants.
   As Korea’s primary grant provider, the KOICA undertakes a majority of grant projects. In some areas in which specialized expertise is required, however, government ministries carry out their own projects individually. Since there could be some inefficiency resulting from duplications and fragmentation, the government is strengthening key functions of the Inter-Agency Grants Committee as the consultative and coordinating body. The government is, in addition, paving the way for better collaboration between government ministries and KOICA, through its introduction of the new project proposal system in which government ministries propose their own grants projects.
   As part of its efforts to implement partner country-centered development cooperation, KOICA has created the Development Experience Exchange Program (DEEP) as a brand representing its development consulting programs. Through DEEP, Korea will share Korea’s experiences and knowhow in policy-making and institution- and system-building based on more systematic strategies and principles.

3) Assistance to Fragile states

The international community has continually expanded its efforts to assist fragile states. During the time of the Millennium Development Goals (MDGs), the results of assistance to fragile states were particularly low. To address this shortcoming of the MDGs, the SDGs set peace, justice and strong institutions as their Goal 16. At the same time the OECD developed a multidimensional framework to contribute effectively to deal with the issue of fragility. In line with the trend, the Department for International Development (DFID) of the U.K. has announced that it will commit about 50% of its aid to fragile regions and countries. The United States Agency for International Development (USAID) is also planning to spend 55% of its financial aid resources on fragile states and the LDCs.
   To throw its weight behind these international endeavors, the Korean government is focused on establishing a sound policy framework for efficiently assisting fragile states. In particular, the 29th meeting of the CIDC adopted the Assistance Strategy for Fragile Sates, which categorizes fragility into conflicts and violence, disasters and the absence of institutions, and presents the following principles to address fragility: targeted and differentiated assistance reflecting the individual country contexts; support for inclusive development for vulnerable social groups such as women and children and neglected fragile states; and diversification of modalities to facilitate effective assistance. To this end, a government-wide approach is being taken to promote collaboration among the different government bodies, while partnerships with international institutions are also being strengthened. By identifying a nexus among peace-building efforts, humanitarian assistance and development cooperation, the government will make efforts to improve its effectiveness in the area of fragility.
   KOICA appropriated the Budget for Conflict-Affected and Fragile States (KRW 10.8 billion in 2019) to offer special provision for development cooperation and humanitarian assistance. Based on the related Mid-term Framework for Fragile States (2017-2019), it offered differentiated assistance to help fragile states build resilience, improve institutional arrangements and public services, and help lay the basis for policy to assist people in vulnerable conditions. The EDCF established the Fragile States Assistance Principles and Implementation Plan to support social and economic infrastructure programs that fully take into consideration and address the fragility of partner countries. Meanwhile, in 2009, the World Bank established the Korea Trust Fund for Economic and Peace Building Transitions to support Myanmar, South Sudan, and other politically unstable countries build their basic social systems and capacity.

4) Multilateral Cooperation Strategy

In addition to bilateral development cooperation efforts, the Korean government supported multidomain efforts of the international community to eradicate poverty, promote economic and social development, and resolve environmental and gender equality issues as a member of the United Nations and other international organizations. The Multilateral Cooperation Strategy (2016-2020) is to be revised with updates, as the current iteration is nearing expiration
   Multilateral cooperation in Korea is undertaken in conformity with the following principles. First, the government strives to carry out its multilateral cooperation and its bilateral assistance projects in mutually complementary manners, so as to create synergies through their integration. Second, by capitalizing on Korea’s comparative advantages and knowledge in implementing multilateral cooperation, the Korean government works to ontribute to achievement of the SDGs while improving the quality and efficiency of its multilateral cooperation.
   Through its Inter-Agency Grants Committee, the government is trying to ensure that its multilateral cooperation is undertaken efficiently by enhancing coordination between the supervising ministries and the implementing agencies. While thereby strengthening efficiency, it will also focus on evaluations of its multilateral cooperative activities. In particular, the Korean government served as the chair of the Multilateral Organization Performance Assessment Network (MOPAN) in 2016, and has led the efforts to evaluate the effectiveness of multilateral organizations in collaboration with other donor countries. Korea also takes an active role in evaluation on ODA taken by the international organization by taking an institutional lead when MOPAN evaluated the UN Industrial Development Organization (UNIDO) in 2019 and UN OCHA in 2020.
   Going forward, the Korean government will, in consideration of its related fiscal burdens, take a stepby-step approach to expanding its contributions to the Multilateral Development Banks (MDBs). The contributions and subscriptions that Korea makes to the MDBs (mainly the WB) amount to KRW 580 billion per year (in 2019). To elevate Korea’s status within the multilateral framework, the government is continuing to increase its contributions and subscriptions while faithfully meeting its pledges to the MDBs.

5) Humanitarian Assistance Strategy

Providing humanitarian assistance to countries affected by conflicts and natural disasters is one of Korea’s main ODA goals. To achieve this goal, the government is providing humanitarian assistance based on ▲ humanity, ▲ impartiality, ▲ neutrality and ▲ independence, which are key principles recognized by UN Resolution A/RES/46/182 and the Good Humanitarian Donorship (GHD) endorsed by advanced donors. In accordance with Article 6 of GHD Principles, which is “allocating humanitarian funding in proportion to needs and on the basis of needs assessments,” the government prioritizes assistance to countries that lack the capacity to respond to emergencies on their own or need immediate assistance to minimize damages from disasters. In February 2020, Korea signed the Grand Bargain, which proposes workstreams to implement the commitments of some of the largest donors and humanitarian organizations to improve the effectiveness and efficiency of the humanitarian action. As such, it is actively working to advance international discussions on humanitarianism.
   Meanwhile, the government has devoted continued efforts to laying the legal and institutional foundations for humanitarian assistance. In March 2015, it established the Humanitarian Assistance Strategy to enable more effective and systematic delivery of humanitarian assistance. The strategy was revised in July 2019 to reflect the recommendations of the Peer Review 2017 and international community discussions. The strategy has a more concerted focus on rapid humanitarian food and healthcare assistance to children, women, refugees, people with disabilities, and other vulnerable groups of people, as well as education and healthcare where Korea has a comparative advantage.
   More fundamentally, in consideration of recommendations to shrink humanitarian needs, the strategy is geared towards increased linkage among humanitarian assistance, development, and peace, as well as more flexible, unearmarked, and multi-year planning for greater predictability in contribution. Another key component of the strategy is increased cooperation with civil society in Korea and abroad. Based on this strategy, the government is aligning the directions for humanitarian assistance with its heightened standing as a middle power, and these directions include continuously expanding the related budget and actively participating in international activities and discussions.
   In October 2018, the Overseas Emergency Relief Act (revised in 2007), which specifies the scope and requirements for overseas emergency relief, was amended. Based on this Act, the Basic Measures for Overseas Emergency Relief (revised in January 2020), which is to be updated every two years, will enable more systematic and efficient emergency relief activities overseas. Based on the Overseas Emergency Relief Act, the government is actively engaged in joint international efforts to address chronic or emergency disasters overseas. When a disaster occurs, it responds swiftly and effectively based on requests from the disaster-stricken country, its capacity to deal with disasters, and flow of assistance from the international community. Assistance can take various forms depending on the circumstances, including bilateral or multilateral commitment of cash or in-kind contributions, or dispatch of emergency relief teams.

Notably, a Korea Disaster Relief Team (KDRT) was sent to Nepal when it was hit by a severe earthquake 7.8 in magnitude in 2015. Together with Nepal’s military police and emergency rescue teams from other countries, the KDRT conducted search and rescue operations, as well as medical activities. In 2018, a KDRT comprised of medical personnel was sent to Laos to offer flood relief. Emergency medical services were offered to displaced persons and local residents with a total of 2,486 persons (on average 152 persons a day) treated during a one-month period. KDRT relief activities helped victims return to their daily lives early, raising the status of Korea as a humanitarian actor rather than just a financial donor.
   In addition, the Korean government is promoting public-private partnerships in emergency relief. It selects humanitarian assistance organizations to fund their field activities and supports capacitybuilding education and training programs. The government promotes humanitarian assistance activities carried out by Korean NGOs through international networks, celebrates the Humanitarian Assistance Day and uses publications to raise public awareness of humanitarian issues. Such activities help build the humanitarian assistance capacity of the private sector. The government also contributes to expanding the base for humanitarian assistance in Korea, sustaining support for NGOs that are involved in disasters forgotten due to lapse of time.
   Today, the international discourse on responding to humanitarian crises is moving beyond the issue of emergency relief while focusing more on a medium-to long-term approach intended to achieve social stability and development in the afflicted country under chronic disaster. The conflicts in counties, like Syria and Venezuela, have demonstrated how large-scale displacements of refugees can disrupt the economic and social structures of neighboring countries, and it is important to effectively link immediate emergency relief with development activities to lay a foundation for social and economic development in a conflict-affected country.
   In this context, Korea acknowledges the humanitarian-development nexus as a crucial element in ensuring the effective delivery of its humanitarian assistance. The Korean government is strengthening the collaboration and coordination between its provision of humanitarian assistance and its development cooperation, in terms of the related budget and organizational structures. To this end, it has established the Fragile and Conflict-affected States Assistance Program, dedicated to supporting early post-conflict recovery and reconstruction, to enhancing institutions and the provision of public services, and to strengthening resilience to natural disasters and climate change in these countries. Going forward, the Korean government is committed to expanding its budget for humanitarian assistance while identifying its own comparative advantages and focusing its assistance on areas of strength in order to enhance the efficiency and effectiveness of its humanitarian assistance.

Country Partnership Strategy

1) Cooperation with priority partner countries

By formulating and implementing the Country Partnership Strategy (CPS), the Korean government is concentrating its resources on strategically selected countries and sectors so as to maximize the effectiveness of its ODA while promoting synergies and harmony. Loans and grants had previously been implemented in accordance with separate strategies for assisting Korea's priority partner countries, and the consequent absence of a unified ODA system had made it difficult for the Korean government to formulate its ODA policy and implement programs in a systematic and integrative manner.
   With the formulation of the Strategic Plan in 2010, 26 priority partner countries were designated. In 2013, development of the CPSs for the 26 countries was completed, and in line with the MidTerm Strategy, the government then revised the list of priority partner countries from 26 to 24 in 2015, in consideration of the individual countries’ stages of development, governance and relations with Korea. Of the 24 priority partner countries, 11 are in Asia, seven in Africa, four in Latin America and two in the Middle East/CIS group. With the formulation of the Strategic Plan in 2021, 27 priority partner countries were newly designated, in the consideration of individual countries’ stages of development, governance and relations with Korea. Of the 27 priority partner countries, 12 are in Asia, seven in Africa, four in Latin America and two in the Middle Asia group.
   As a comprehensive and all-inclusive assistance strategy, the CPSs are formulated in line with Korea’s ODA policy and development challenges, and present the priority areas and implementation strategies. The CPSs are formulated in consultations with the partner countries, in comprehensive consideration of Korea’s diplomatic policies and the development needs of the partner countries, in order to provide targeted and customized assistance to them. Through the CPSs, the Korean government enhances its policy coherence and consistency while facilitating the needs-based delivery of its ODA.

2) Field-Oriented ODA Projects

Through its decentralization efforts, the Korean government is attempting to respond to the needs of partner countries swiftly and effectively in conformity with their development strategy, policy priorities, rules and regulations and implementation mechanism. As part of this effort, Korean embassies in partner countries are participating in identifying, implementing and evaluating ODA projects. In particular, Korean embassies are taking the lead in regularly organizing ODA consultation meetings to share information with implementing partners and NGOs and coordinate project implementation.
   Consistent with the government’s policy direction, KOICA has formulated “the ODA Decentralization Strategy” to plan and implement its ODA projects in ways that suit the different needs and conditions of partner countries. In line with this strategy and in view of the government’s Country Partnership Strategy (CPS), KOICA increased its country offices from 27 in 2007 to 44 today. Through country offices, KOICA is providing targeted assistance through regular meetings with partner countries and other donor agencies.
   EDCF is helping to build the capacity of local public officials involved and serving local needs through local offices in the beneficiary countries. Its overseas offices, first opened in 2011, grew over time and there are 12 currently in operation. The offices have become more functional, identifying potential programs based on demand surveys. These are part of efforts to promote greater understanding of EDCF and build the capacity of partner countries through public official training and locally organized workshops, which were instituted in 2020.