Out of touch with reality

Park Myung-ho
The author is a professor of economics at Hankuk University of Foreign Studies.

I am a university professor preparing for a lecture on development cooperation for the new semester. While collecting materials for the lecture, I was very happy to find a column about official development assistance (ODA). It was titled “ODA holds the key to boosting Korea’s image” and in the Feb. 15 edition of the Korea JoongAng Daily. My expectation of the column was high as it was written by a former diplomat. However, after reading the column, I thought it was my obligation to make comments as an expert in development cooperation.

I agree with the author that Korea should take a greater responsibility in the international community. I do not agree with the author, a former ambassador to Vietnam, who wants to increase aid since Korea’s share of ODA to national income is too small compared to member countries of the OECD Development Assistance Committee (DAC) and even to China. In Korea, like other advanced countries, ODA is implemented by agencies commissioned by the government, such as Koica and the Economic Development Cooperation Fund (EDCF). Since ODA is a government activity implemented with a government budget — in other words, taxpayer money — the government must transparently disclose its ODA spending to the public with a performance evaluation. And if you want to increase the ODA amount, a further explanation should be given to taxpayers. I believe that building the capacity to improve the quality of aid is much more important than increasing the amount of aid.

Korea became an emerging aid donor of the DAC in 2010. (I am very sorry that the former diplomat is not well aware of the year when Korea joined DAC). Korea does not yet have sufficient experience and capacity to carry out effective aid programs. A comprehensive evaluation of Korea’s ODA shows that the problem is not a lack of financial resources, but a lack of expertise. The evidence is that Korea has not yet provided a best practice case for aid. We still need to learn more from developed countries, international organizations and our own experience as both recipient and donor. After having the ability to provide effective aid and create a successful case of aid, we can ask Korean taxpayers to increase the amount of aid.

Although there is a debate about the effectiveness of aid, aid experts generally agree on which countries provide best practices in aid. In terms of the purpose and size of aid, Nordic countries are appreciated for the share of ODA to national income and for humanitarian goals. Regarding the aid approach, most experts agree that Britain is a leading country by introducing a new approach to enhance development effectiveness such as the result-based approach (RBA). But none of the aid experts consider China a model country for aid. On the contrary, China’s predatory behavior, often called debt trap diplomacy, is open to criticism.

According to the author, China spent $38 billion in aid last year, the largest amount in the world, surpassing that of the United States. As far as I know, China has not yet released official statistics on its aid. It is possible to indirectly estimate the amount of China’s ODA through the document published by the Chinese government. According to China’s Foreign Aid White Paper released by the Chinese government in 2014, it spent $81.1 billion in ODA over the previous three years. That was equivalent to 0.025% of China’s national income at the time. As Beijing has not published any white papers on ODA since 2014, it is hardly possible to have the latest aid data.

To determine China’s aid totals, we must rely on estimates from other specialized agencies such as OECD DAC and the Japan International Cooperation Agency (JICA), which has been studying China’s aid for a long time. JICA estimated China’s aid to be $5.9 billion in 2019, and OECD DAC estimated it to be $4.8 billion in 2020. With this ODA amount, China ranks sixth after the United States, Germany, Britain, France and Japan. China’s aid represents around 0.04 percent of China’s nominal GNI, far less than that of Korea.

China is neither a member of OECD DAC nor a member of the Paris Club. Not being a member of the DAC, China does not have to publish its ODA information. Not being a member of the Paris Club, China assumes no responsibility for debt to developing countries. As a result, the Chinese government does not accept that it should behave in accordance with international standards.

As an emerging donor country, it is challenging for Korea to comply with the norms required by the international community. Nevertheless, as a responsible actor of the international community, Korea differentiates itself by being a country striving to resolve poverty, inequality, and corruption at global levels.

It is very regrettable that a former South Korean diplomat wrote a column about aid that did not correspond to reality. This clearly shows how ignorant our society is about foreign aid. In order for Korea to become a responsible actor contributing to global society, more efforts should be made to nurture aid experts.