Aid or Development? ODA- Lessons Learned and Challenges for Korea

Upcoming events

Background and Objectives

While the world economy has experienced drastic growth since World War II, more than 1 billion people - “the bottom billion”- still live on less than 1 USD per day, suffering from extreme poverty and disease. Foreign aid for poverty reduction and promoting development in impoverished countries has been a long-term moral commitment of the international community. An astronomical amount of foreign aid (through either bilateral or multilateral channels) has flowed to destitute countries since the 1950s for this purpose. 

Contrary to expectations, many cases have shown that foreign aid has failed to create the desired beneficial outcomes. Many critics doubt the effect of the aid provided for poverty reduction and the extent to which it contributed to promoting development in recipient countries, even though the necessity to provide the emergency and humanitarian aid in case of natural disasters is unquestioned. Some critics claim that aid only produces undesirable incentives and aid dependency that delays or prevents development by the recipients. The relationship between aid provided and the wider performance of aid-recipient economies has been the subject of engaged debate.    

Last November, South Korea officially became a member of the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD).  Korea is a unique country that successfully transformed itself from a net recipient into a donor country. It undeniably owes its economic success to the aid of the international community and the economic strategies that engaged world markets instead of economic isolation. It is one of the rare but excellent examples of how foreign aid could promote national development. 

With its entry to the DAC, Korea has pledged itself to triple its aid volume, which currently accounts for only 0.1 percent of its gross national income (GNI) and falls short of the OECD average at 0.31 percent. It also has committed itself to reshape its aid policies and practices in accordance with the DAC guidelines to achieve the UN Millennium Development Goals (MDGs). It is imperative for South Korea to join the on-going debate on the aid-development relationship by closely examining what foreign aid has achieved so far. 

The 5th JPI-FNF joint workshop from October 18 to 20 will offer experts the opportunity to analyze the achievements and failures of foreign assistance policies and practices that will revive the discussions on the genuine objectives of foreign assistance in order to ultimately elaborate policy recommendations for effective foreign assistance policy.