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South Korea became the twenty-fourth member of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD)in 2010.  It is the first former aid recipient to join OECD/DAC, and it is making efforts to increase its official development assistance (ODA) amount and untie its ODA to catch up with other DAC members.

South Korea endeavors to share its development experience with other developing countries.  The country has concentrated its international aid efforts on human resources development through technical cooperation and transfer of economic development experience.  The geographic area of focus of South Korean ODA has been Asia, but South Korea is increasing its bilateral aid to Africa.    

South Korea enacted the Framework Act on International Development Cooperation in 2010 for the effective and systematic performance of ODA.  The basic principle of South Korea’s ODA is “contribution to poverty eradication and sustainable development in developing countries aiming at peace and prosperity of the world as well as humanitarian causes.” [1]  Under the Act, the Committee for International Development Cooperation (CIDC) was established to make a comprehensive national ODA plan.  ODA has primarily been managed by two agencies and coordination was needed.  The Ministry of Foreign Affairs and Trade (MOFAT) controls grants and technical cooperation and the Ministry of Strategy and Finance (MOSF) is responsible for loans to developing countries. 

I.  Introduction

A.  Official Development Assistance Figures

In 2009, South Korea reported to the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) net Official Development Assistance (ODA) of US$850.7 million, which comprised US$615.81 million in bilateral ODA and US$234.94 million in multilateral ODA.[2]  Preliminary data suggest that Korea’s ODA amounted to US$1,202.51 million in 2010.[3]  South Korea’s net ODA was 0.1% of its Gross National Income (GNI).[4]  Although Korea’s ODA volume is still modest, the Korean government plans to increase the nation’s ODA/GNI ratio to 0.15% by 2012 and to 0.25% by 2015.[5]

In addition to aid to other countries, South Korea provides aid to the northern part of the Korean peninsula.  Under the South Korean Constitution, that area is a part of South Korea although the government of North Korea, the Democratic People’s Republic of Korea, controls it.[6]  South Korea estimated this assistance at US$558 million in 2007, its highest year, but since assistance to North Korea is not formally reported to the DAC, it is not officially verified or recorded as ODA.  South Korea’s aid to North Korea declined dramatically since the administration changed in early 2008.[7]  For example, food aid from South to North Korea was 430,550 tons in 2007, but 8,605 tons in 2008 and 7,568 tons in 2010.[8]

B.  Private Contribution Figures

It has not been possible to locate private contribution figures. 

C.  Snapshot of Foreign Aid Activity

South Korea became the first former aid recipient to join the OECD/DAC in January 2010.[9]  It is very proud of this successful development history and views it as a model for poverty reduction.  “Understanding that sharing its successful development experience with developing countries is the most effective means of assistance, to date Korea has concentrated its international aid efforts on human resources development through technical cooperation and transfer of economic development experience.”[10]  By “capacity building of partner countries,” Korea can “help them achieve self-reliance.”[11]  This policy was also chosen because it is practical for South Korea in the context of its limited ODA budget.  South Korea also focuses on economic infrastructure assistance.  In this area, South Korea has assisted partner countries in reducing the “digital divide” by aiding development of their information technology industry.[12]

The geographic area of focus of South Korean ODA is Asia.  “In 2008, Korea spent 56 percent of its gross bilateral aid . . . in Asia, and nearly 70 percent of this funding was focused on East Asia. . . . But Korea has recently increased its ODA to Africa, doubling its support to the region.”[13]  In particular, the Korean International Cooperation Agency (KOICA) greatly expanded its grants to Africa because most of the least developed countries are located there.[14]  South Korea also assists Iraq, Afghanistan, and the Palestinian Territories under the theme of “Assistance for the Reconstruction of Fragile States and Peace-Building.”[15]

The South Korean government joined an international drug purchasing entity, UNITAID.  UNITAID chose a tax on airline tickets as the most appropriate means of providing sustainable funding.[16]  The South Korean government introduced an “air-ticket solidarity levy” in 2007.[17]  International flight passengers departing from South Korea must pay KRW1,000 (about US$0.9).[18]  A large proportion of the collected levy contributed to UNITAID supports the treatment of HIV/AIDS, tuberculosis, and malaria in developing countries.  The remainder goes toward disease eradication projects in Africa that are run by South Korean nongovernmental organizations or African governments.[19]

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II.  Legal Framework

A.  Regulation of ODAs

1.  Overview

The basic principle of South Korea’s ODA is “contribution to poverty eradication and sustainable development in developing countries aiming at peace and prosperity of the world as well as humanitarian causes.”[20]  South Korea enacted the Framework Act on International Development Cooperation in 2010 for the effective and systematic performance of ODA.[21]  

There are two main agencies involved in managing ODA: the Ministry of Foreign Affairs and Trade (MOFAT) controls grants and technical cooperation and the Ministry of Strategy and Finance (MOSF) is responsible for loans to developing countries.[22]  MOFAT and MOSF, respectively, must develop Five-Year Basic Plans and submit them to the Committee for International Development Cooperation (CIDC), which is under the Prime Minister’s jurisdiction.[23]  Based on these Basic Plans, the CIDC makes a comprehensive plan for Korea’s international development assistance.[24] 

In addition, various national government agencies, local governments, and public organizations implement ODA.  They submit annual international development assistance plans to MOFAT and MOSF.[25]  MOFAT and MOSF examine whether their plans fall under the Basic Plans and coordinate them.[26]  CIDC may discuss related issues with MOFAT, MOSF, and select countries on which South Korean ODA is focused.[27]  In October 2010, CIDC adopted the “Strategic Plan for International Development Cooperation,” which outlined key strategies and plans to strengthen Korea’s international cooperation capacity.[28]  

2.  Implementing Agencies

As stated in the previous section, South Korea has a dual system of ODA.  For bilateral aid, KOICA, under the guidance of MOFAT, controls grants and technical cooperation for South Korea’s ODA, while the Economic Development Cooperation Fund (EDCF) of Korea’s Export-Import Bank, under the guidance of MOSF, is responsible for loans.[29]  Multilateral aid is also split, with MOFAT responsible for the UN agencies and MOSF responsible for the international development banks.[30]  In addition, approximately thirty institutions, including national government agencies and municipal governments, participate in the execution of ODA programs.[31]  In its 2008 Special Review of Korea, the DAC recommended that the South Korean government establish “a single entity with sole authority over development cooperation objectives, policy, and strategy.”[32]  Although CIDC was established as a coordinating body in 2008,[33] “intra-governmental coordination is a challenge, and the Korean development community remains fragmented.”[34]

3.  Restrictions

Historically, South Korea’s ODA has been heavily tied.  In 2007, only a quarter of South Korean aid was untied.  South Korea established a road map to reduce its tied aid.  The country plans to untie 75% of its ODA by 2015.[35]  

The DAC High Level Meeting adopted a recommendation on untying aid to the least developed countries in April 2001.[36]  South Korea must fully comply with the DAC recommendation on untying aid within a reasonable time frame after it joins the DAC.[37]

4.  Discretionary Aid

Information on discretionary aid was not available.

5.  Oversight

CIDC developed guidelines in December 2009 for an integrated ODA evaluation system, to evaluate ODA policies and results.[38]  The evaluations examine appropriateness, efficiency, effectiveness, influence, and sustainability.  Evaluations may be performed by the implementing agency or outside experts, or joint evaluations may be conducted with aid-receiving countries or other donor agencies.  In the process of evaluating, CIDC considers the opinions of aid-receiving countries and MOFAT overseas offices.[39]  CIDC submits ODA evaluation results to the National Assembly annually.[40]

6.  Policy Considerations

Information on policy considerations was not available.

B.  Regulation of Private Contributions

Information on the regulation of private contributions was not available. 

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III.  Foreign Aid Appropriations Process

“MOSF establishes the annual budget and national fiscal management plan to support public expenditure for national development activities.”[41]  The general budget process is discussed below.

The Constitution states that the Executive formulates the budget bill for each fiscal year and submits it to the National Assembly within ninety days before the beginning of a fiscal year. The National Assembly must decide on it within thirty days before the beginning of the fiscal year.[42]  Within the executive branch, the Ministry of Planning and Budget (MPB) prepares the budget proposal.[43] 

At the beginning of a new budget cycle, the guidelines for the budget requests and the principle of the budget formulation are decided by MPB.  Certain national priorities decided by the President are reflected in the guidelines for budget requests.  The head of each administrative agency prepares a budget request in accordance with the guidelines of the Budget Office.  Each agency makes its budget appropriation request by categorizing the objectives and the logistical features of each project.[44]

The Budget Office in the MPB reviews the budget proposal of each ministry and agency, negotiates changes of proposals, and prepares a comprehensive government budget proposal.  The proposal is sent to the State Council presided over by the President.  After the State Council confirms the budget proposal, the proposal is sent to the National Assembly.[45]  The National Assembly has authority to change the proposal, but it has not played a significant role in budget-making in the past.[46]

The main funding sources for the EDCF have been contributions from the government’s general budget account and borrowings from the government’s special budget account.[47]  In addition, the Foreign Economic Cooperation Fund Act allows the EDCF to obtain funds from other financial sources, such as contributions from governmental funds, deposits from the National Bond Management Fund, and profit earned from the operation of the EDCF.[48]  

As of the end of 2009, the accumulated total of the EDCF had reached KRW2,470 billion. Total contributions from the government amounted to KRW1,380 billion, accounting for about 55.9% of the total fund.  The net borrowings from the government reached KRW96.0 billion, about 4% of the total fund, while total reserves were KRW994.0 billion (about 40.2%).[49]

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IV.  Other Types of ‘Aid’

A.  Humanitarian Assistance

South Korea “supports and participates in the collective efforts of the international society in promoting humanity and protecting human rights of those in crises caused by hunger, diseases and natural and man-made disasters.”[50]  South Korea provided US$24.6 million in humanitarian assistance in 2006, which accounted for 3.6% of the country’s total bilateral ODA.[51]  South Korea plans to increase the budget for overseas emergency relief to 6% of the overall ODA budget by 2015.[52]

Regarding emergency aid, the Overseas Emergency Relief Act was enacted in 2007 to provide a systematic response in the event of large-scale overseas disasters.[53]  MOFAT is a coordination agency for governmental emergency relief activities.[54]  It has a budget for a natural disaster emergency relief fund for foreign countries.  The amount has been recently criticized as too small.  For developing countries, a portion of the ODA budget can be used.  During 2011, the emergency relief budget for developing countries was US$16.8 million, which is 1.1% of the ODA budget.  For developed countries, however, it is only US$200,000.[55] 

B.  Foreign Remittances

The Bank of Korea stated that foreign remittances in 2010 amounted to nearly US$10 billion: US$1.8 billion from short-stay (less than one year) foreign workers and US$8.89 billion combined from long-stay foreign workers and South Koreans who sent money to overseas South Koreans.  The Bank of Korea estimated that most of the US$8.89 billion was from foreigners, not from South Koreans.[56] 

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Prepared by Sayuri Umeda
Senior Foreign Law Specialist
November 2011


[1] See infra note 20 and related text.

[2] ODA by Donor, OECD.StatExtracts, http://stats.oecd.org/Index.aspx?DatasetCode=ODA_DONOR (select Korea in “Donor” field, then select Net Disbursements in “Flow type” field) (last visited Nov. 10, 2011).

[3] Id.

[4] GNI is “the Gross Domestic Product (GDP) less net taxes on production and imports, less compensation of employees and property income payable to the rest of the world plus the corresponding items receivable from the rest of the world.”  Glossary of Statistical Terms: Gross National Income (GNI), OECD, http://stats.oecd.org/ glossary/detail.asp?ID=1176 (last updated Mar. 5, 2003).

[5] What is the Role of Korea in Development Cooperation?, Economic Development Cooperation Fund (EDCF) (Sept. 24, 2010), http://www.edcfkorea.go.kr/edcfeng/bbs/faq/view.jsp?no=9848&bbs_code_id= 1317863854370&bbs_code_tp=BBS_8&code_tp=F01_22&code_tp_up=F01.

[6] Article 3 of the Constitution states, “[t]he territory of the Republic of Korea shall consist of the Korean peninsula and its adjacent islands.”  Constitution of the Republic of Korea, Oct. 29, 1987, English translation available on the National Assembly’s website, at http://korea.assembly.go.kr/res/low_01_read.jsp?board id=1000000035 (last visited Nov. 10, 2011).

[7] Cho Jong Ik, NK Economy Stays in the Mire, DailyNK (July 7, 2011), http://www.dailynk.com/ english/read.php?cataId=nk00100&num=7923.

[8] Numbers are available through the World Food Program’s database at http://www.wfp.org/fais/reports/ quantities-delivered-report (select “Donor,” “Recipient,” and “year” in Y1, Y2, and X dimension boxes of the top section, then, select “Republic of Korea,” “Democratic People’s Republic of Korea,” and “select all” in Donor, Recipient and Year in the second top section) (last visited Nov. 10, 2011).

[9] S. Korea Becomes First Former Aid Recipient to Join OECD Development Assistance Committee, Hankyoreh (Nov. 26, 2009), http://english.hani.co.kr/arti/english_edition/e_international/389918.html.

[10] Kang-ho Park , Korea’s Role in Global Development, Brookings Northeast Asia Commentary, No. 36 (Feb. 2010), http://www.brookings.edu/opinions/2010/0209_korea_global_development.aspx.

[11] Policy & Directions, EDCF, http://www.edcfkorea.go.kr/edcfeng/about/overview/policy.jsp (last visited Jan. 24, 2012).

[12] Id.

[13] Park, supra note 10.

[14] Ministry of Foreign Affairs and Trade (MOFAT), 2011 Diplomatic White Paper, pt. 5, at 237, http://www.mofat.go.kr/english/political/ whitepaper/index.jsp (click “White Paper,” then “2011 Diplomatic White Paper (Part 4-7),” then “Part 5”) (last visited Nov. 9, 2011).

[15] Id. at 238.

[16] How UNITAID Came About, UNITAID, http://www.unitaid.eu/en/component/content/article/159.html (last visited Nov. 10, 2011).

[17] Air-ticket Solidarity Levy, ODA Korea, http://www.odakorea.go.kr/eng/operations/innovative.php (last visited Nov. 10, 2011).

[18] Korea International Cooperation Agency Act, Act No. 4313, Jan. 14, 1991, last amended by Act No. 10095, Mar. 17, 2010, art. 18-2, para. 1.  An English translation is available through the website of the Korea Legislative Research Institute (KLRI), at http://elaw.klri.re.kr/eng/main.do (last visited Nov. 14, 2011).  A membership registration at no cost is required to obtain the translation (click “sign up” in upper left-hand corner).  KLRI is a government-funded research institute.

[19] Air-ticket Solidarity Levy, supra note 17.

[20] MOFAT, 2010 Diplomatic White Paper, pt. 5, at 190, http://www.mofat.go.kr/english/political/ whitepaper/index.jsp (click “White Paper,” then “2010 Diplomatic White Paper (Part 4-7),” then “Part 5”) (last visited Nov. 7, 2011).

[21] Framework Act on International Development Cooperation, Act No. 9938, Jan. 25, 2010, art. 1.  An English translation of this act is not available on the KLRI website.

[22] Id. art. 9, para. 1.

[23] Id. art. 8, para. 1.

[24] Id. art. 8, para. 2.

[25] Id. art. 11, para. 1.

[26] Id. art. 11, paras. 2, 3.

[27] Id. art. 12.

[28] ODA/Development Cooperation, Ministry of Foreign Affairs and Trade (MOFAT), http://www.mofat.go.kr/ENG/policy/oda/index.jsp?menu=m_20_110 (last visited Nov. 2, 2011) (click on “Policy Issues”).

[29] Ahn Eungho, Korea’s Development Cooperation Experience, Korea EXIM-Bank (paper presented at the Jeju Peace Institute-Friedrich Nauman Foundation for Liberty Joint Workshop, Oct. 18-20, 2010), available at http://www.jpi.or.kr/board/run/download.php?board_id=jpiworld&page=4&row_per_page=15&page
_per_block=10&pds_uid=3899
.

[30] OECD/DAC, Development Cooperation, Development Co-operation of the Republic of Korea: DAC Special Review 10 (Aug. 8, 2008), http://www.oecd.org/dataoecd/53/50/42347329.pdf.

[31] 2010 Diplomatic White Paper, supra note 20, at 191; Jin-myong Kim, ODA wa tojōkoku hōmon ji no temiyage? [Is ODA Like a Souvenir When an Official Visits a Developing Country?], Chosunilbo, July 14, 2011 (in Japanese; on file with author).

[32] DAC Special Review, supra note 30.

[33] 2010 Diplomatic White Paper, supra note 20, at 191.

[34] Park, supra note 10; Kim, supra note 31.

[35] Park, supra note 10.

[36] Untying Aid to the Least Developed Countries, OECD Policy Brief, at 1 (July 2001), http://www.oecd. org/dataoecd/16/24/2002959.pdf.

[37] DAC Special Review, supra note 30, at 24.

[38] Framework Act on International Development Cooperation, Act No. 9938, Jan. 25, 2010, art. 13, para. 1. 2011 Diplomatic White Paper, supra note 14, pt. 5, at 234.

[39] Framework Act on International Development Cooperation Enforcement Order, Presidential Decree No. 22296, July 21, 2010, last amended by Presidential Decree No. 23229, Oct. 17, 2011, art. 11.  

[40] Framework Act on International Development Cooperation, art. 13, para. 2.

[41] DAC Special Review, supra note 30, at 19.

[42] Constitution of the Republic of Korea, Oct. 29, 1987, art. 54, para. 2.

[43] Joonook Choi, International Cooperation Behind National Borders: Country Case Study on the Republic of Korea 6 (2005) (UNDP/ODS Background Paper), http://www.undp.org/thenewpublicfinance/casestudies/ ccs_korea.pdf.

[44] Id.

[45] Id.

[46] Id.

[47] Funding Resources, EDCF, http://www.edcfkorea.go.kr/edcfeng/data/fund.jsp (last visited Jan. 24, 2012).

[48] Foreign Economic Cooperation Fund Act, Act No. 3863, Dec. 26, 1986, last amended by Act No. 8852, Feb. 29, 2008, art. 4, English translation available through the website of the KLRI, at http://elaw.klri.re.kr/eng/main.do.

[49] EDCF, supra note 47. 

[50] Humanitarian Assistance, ODA Korea, http://www.odakorea.go.kr/eng/operations/humanitarian.php (last visited Nov. 9, 2011).

[51] Id.

[52] 2011 Diplomatic White Paper, supra note 14, at 243.

[53] Overseas Emergency Relief, ODA Korea, http://www.odakorea.go.kr/eng/operations/emergency.php (last visited Nov. 9, 2011).

[54] Overseas Emergency Relief Act, Act No. 8317, Mar. 29, 2007, arts. 7–14.

[55] Kuni no hinkaku ni miau kaigai kyuen yosan o wariate yo [Allocate Emergency Foreign Aid Budget that Matches National Power and Pride], Chosunilbo (Mar. 16, 2011), (in Japanese, on file with author).

[56] Yonhap news, Gaikokujin rodosha no kaigai sokin sakunen 100 oku doru ni semaru [Foreign Remittance by Foreign Workers Amounted to Almost 10 billion Dollar], Wow Korea (Jan. 28, 2011), http://www.wowkorea.jp/news/Korea/2011/0128/10079658.html (in Japanese).   

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Last Updated: 06/09/2015