Chapter 5. Korea’s delivery modalities and partnerships

Partnering

Peer review indicator: The member has effective partnerships in support of development goals with a range of actors, recognising the different and complementary roles of all actors

Korea is valued as a development co-operation partner at both international and country level. Its combination of technical co-operation, grants and highly concessional loans, based on government requests, is highly appreciated by partner countries. In response to its policy commitment to “collaborative ODA”, Korea has expanded into a range of new partnership models, many of which are still at an early stage. Overall, Korea’s multilateral partnerships and approach to triangular co-operation reflect good practice. However, partnerships with civil society, academia and the private sector are largely based on individual projects, which is not conducive for building the strategic partnerships that Korea aspires to in its policy documents.

Korea’s policy framework commits all parts of the system to a more collaborative and integrated ODA (Chapter 2). In response, Korea has expanded its partnerships with the multilateral system, civil society, the private sector and emerging donors in order to implement its 2012-16 mid-term strategy. This offers significant potential for partners to share their knowledge and experience and to keep abreast of changing policies, thereby sharing risks and ensuring that Korea’s programmes remain relevant and effective.

Co-funding multilateral programmes is a pragmatic strategy for a growing ODA budget

Korea’s multilateral strategy sets out a clear rationale for core and earmarked funding through the multilateral system (GoK, 2016a), including for global initiatives such as the Global Health Security Agenda.1 As set out in Chapter 3, Korea uses the multilateral system for 35-40% of its ODA budget and is proactively seeking opportunities to combine its loans with other multilateral and bilateral development finance institutions. Examples of combined loan agreements include a hydropower scheme in the Solomon Islands with the World Bank and Green Climate Fund, and a broadband programme in Nicaragua with the Inter-American Development Bank.

Korea also funds posts for its citizens in the multilateral system with a view to building its corps of development professionals and increasing its influence in key agencies. Multilateral agencies reported that these posts worked well where there was a clear skills match. In general, multilateral organisations were positive about Korea’s support and welcomed the new multilateral strategy. However, several reported that they found it challenging to develop a strategic partnership with Korea due to shifting priorities, high staff turnover in Korean ministries and limited avenues for discussing policy, thematic or country-specific issues with Korea.

Korea engages in formal governance structures and bilateral consultations with its five priority UN agencies – UNHCR, UNDP, UNICEF, WFP and WHO – with a focus on financial accountability and results, and is putting in place multi-annual agreements with these agencies. Korea chaired the Multilateral Organisation Performance Assessment Network (MOPAN) in 2016 and draws on the network’s findings and other sources of information to make strategic choices about its multilateral partnerships.

Korea is also represented on the governance structures of all eight of the international financial institutions to which it contributes,2 and has forged a well-defined partnership with the World Bank. Engaging on a deeper level with fewer institutions may foster more effective partnerships.

Korea would benefit from a more developed partnership with civil society

While Korea has formal structures to engage civil society in its development co-operation, compared with other DAC members, it has few strategic level partnerships or longer-term funding agreements.

Formal structures, such as Korea’s high-level Committee for International Development Cooperation (CIDC), include a number of representatives from civil society and CIDC recently approved a plan for co-operation with non-government organisations (NGOs) (GoK, 2016b). In addition, the multi-stakeholder body Development Alliance Korea3 provides a forum for dialogue among government, business and NGOs. The alliance hosts thematic working groups, one of which has negotiated a set of partnership principles. However, the review found little evidence that civil society’s contributions were given weight in policy-making processes.

Although Korea has set up a number of grant schemes (such as an NGO incubation fund and the public-private partnership scheme), its funding to and through civil society is the lowest of all DAC members (Chapter 3). In response to feedback from partners, Korea recently revised its administrative requirements for grants to NGOs, which were previously based on rules designed for government grants disbursed within Korea and required original receipts. The updated rules are a positive development, particularly for NGOs working in fragile states. There is nonetheless further scope for Korea to harness the potential of civil society to support its development objectives, deepen its understanding of the country context and improve the sustainability of its programmes. The government could also capitalise on strong public support for development and humanitarian NGOs – Korean NGOs raise ten times as much funding from private sources as from the government – by demonstrating a strong partnership with these organisations. Finally, Korea could draw further on civil society’s role as an independent watchdog to manage risks associated with selecting and implementing projects in partner countries and fragile states.

Triangular co-operation is an important strategy for Korea to engage with emerging donors

As described in Chapter 1, Korea sees itself as an important bridge between developing countries, the BRIICS countries and OECD member states. One manifestation of this is Korea’s engagement via both its grant and loan agencies with emerging donors through triangular co-operation (KOICA, 2012), primarily in the area of joint training and knowledge exchange (OECD, 2015). Examples include a KOICA partnership with Colombia on vocational education training in Central and South America, and with Thailand on rural development training for Southeast Asian countries. While funding for these initiatives is modest, there is much international interest in Korea’s triangular co-operation efforts. In a similar vein, Korea has carved out a leadership role in regional fora such as the Asian Development Forum4 and the EDCF-JICA-CEXIM-NEDA seminar (a regular four-party meeting between development finance entities in China, Thailand, Korea and Japan).5 This offers potential to further collaborate and develop joint programmes.

Korea is expanding the range and scope of its private sector partnerships

Korea contributes to private sector growth and investment in its partner countries through its concessional loans to government for economic infrastructure – particularly transport and energy. Since 2014, EDCF, the concessional lending arm of KEXIM Bank, has also been able to lend directly to businesses. Its first non-government loan, to a Cambodian bank for micro-finance services, was approved in 2016.

Korea has developed a number of ODA funding instruments6 to help small and medium-sized Korean enterprises to develop technology and services for developing countries and to invest in these new markets. This is in response to a political imperative to demonstrate that a growing ODA budget can benefit both Korea and its partner countries. Grants complement this work, helping to build local value chains such as fair trade coffee. A new KOICA Development Innovation Office was established in 2015 to manage this work and identify further opportunities.

Korea’s private sector partnerships are at an early stage and do not yet sit under a policy framework that clearly spells out their development objectives, partnership principles and funding criteria. As other DAC members have found, it is important to keep the development objective central in partnerships with the private sector, and to ensure that projects and programmes are grounded in the needs, priorities and capacities of developing countries (OECD, 2016).

Country level engagement

Peer review indicator: The member’s engagement in partner countries is consistent with its domestic and international commitments, including those specific to fragile states

Korea uses a combination of technical co-operation, grants and loans to forge bilateral relationships in its 24 partner countries and beyond. As technical co-operation programmes are a key pillar of its development co-operation, Korea could draw further on its partner country surveys and evaluation findings to channel its resources into the activities that have proven most effective. At present, funding is thinly spread across many projects and countries, which limits development impact. Korea recognises the central role of partner government in prioritising needs but could do more to scrutinise the process through which requests are generated and to encourage proposals for strategic programmes in addition to stand-alone projects. Korea’s limited internal capacity to analyse country contexts and especially fragility, and to tap into the knowledge of civil society organisations and other development partners, affects its ability to manage risk and respond to changes in the country.

Korea champions development effectiveness at a global level

Country-driven processes are at the core of Korea’s approach to development co-operation. Having hosted the Busan Fourth High Level Forum on Development Effectiveness in 2011, Korea is an enthusiastic champion of the principles of effective development co-operation. Through its missions in Paris and New York it continues to raise awareness among governments about the Busan Partnership Agreement and advocates for its full implementation as part of the global effort towards achieving the Sustainable Development Goals. Korea hosts an annual Global Partnership Forum, together with a regular learning platform, to enable policy makers and practitioners to review progress on the “nuts and bolts” of development effectiveness in individual countries. Korea has improved its performance on all the Global Partnership indicators7 (Figure 5.1) and tends to use country systems for its concessional loans, which are currently largely provided as government-to-government loans. KOICA has also taken steps to increase the use of country systems and programmatic approaches for grants, committing USD 33 million through these mechanisms to date (KOICA, 2017a). Building on its own experience as a former recipient country, Korea has processes in place to check that its grants and loans align with national priorities – all proposals must align with the country partnership strategy and the sustainable development goals, while also being accompanied by an official request from the partner country. However, the sheer breadth of Korea’s country partnerships (with 24 priority countries, 20 non-priority partner countries in addition to programmes in many more) challenges its ability to ensure effective development across its portfolio.

Korea has made rapid and continued progress on untying its aid, with 48.7% of its ODA, including free-standing technical co-operation, untied in 2015, compared to 2% in 2006 and 32% in 2010 (OECD, 2017). It also takes account of partner country preferences regarding tied aid. Nonetheless, as noted in Chapter 3, further progress is needed on untying.

Country partnership strategies have improved, but are not yet comprehensive

Korea’s Committee for International Development Cooperation has recently approved a second cycle of five-year country partnership strategies for each of its 24 partner countries. These take on board recommendations from the 2012 peer review (OECD, 2012) and now include grants and loans, as well as an outline results framework. Each country selects three to four priority themes; within each country 70% of the budget is expected to go towards these themes (GoK, 2017). These strategies, which are agreed with the partner country government, are a significant improvement on the first round but could be further developed. For example, although Korea shares its indicative budgets with government, including this information in the partnership strategy would improve transparency and oversight for all involved. In addition, including more information about Korea’s investments and engagement beyond the development programme would allow linkages to be made between its ODA and non-ODA efforts.

Korea’s project selection process would benefit from more scrutiny

Korea deserves praise for taking partner government requests as the starting point for its project selection. As observed in Cambodia, however, this is not systematically accompanied by an analysis of how its grants and loans will help to drive inclusive growth or address the “leave no-one behind” agenda or how Korea’s investments can be sustained once funding concludes. As a result, a recent audit report (BAI, 2017) identified project selection as the greatest risk to the effectiveness of Korea’s development co-operation (Chapter 4). Verifying that partner governments have engaged in robust dialogue with all stakeholders– including development partners, implementing partners, parliamentarians and civil society – when formulating development plans and project requests, could help to mitigate the risks and assumptions inherent in project selection. This would be consistent with the Busan principles and the Global Partnership for Effective Development Co-operation (HLP, 2011) which emphasise the importance of broader country ownership, including parliament and civil society. A number of DAC members working in Korea’s partner countries agreed that additional scrutiny by Korea of the process through which government requests are generated, would strengthen Korea’s effectiveness. This is particularly important for grants, which are often less rigorously scrutinised by partner country parliaments and finance ministries than loan requests.

Korea places high priority on technical co-operation and capacity building and is aware that an overarching strategy would strengthen this work

Capacity building and technical co-operation are at the core of Korea’s approach to development co-operation in both fragile and non-fragile contexts (Box 5.1). This is consistent with Global Partnership principles and Korea’s comparative advantage. KOICA’s main form of assistance in partner countries is through an “integrated development project” which combines experts and training with “hardware” such as providing equipment and building infrastructure.

Box 5.1. Korea’s technical co-operation programmes

Korea has been sharing its development experience and building capacity in developing countries since 1965 through three main channels:

Advisory programmes: Korea responds to requests for policy and technical advice from developing countries through its “Knowledge Sharing Program” (KSP) and “Development Experience Exchange Partnership” (DEEP).

KSP, managed by the Ministry of Strategy and Finance and implemented by the Korean Development Institute, KEXIM Bank and the Korean Trade Agency, currently works with 46 countries (including some middle-income countries on a cost-sharing basis), on topics such as agriculture, financial services and export promotion, over a period of one to three years. Support can be provided through bilateral exchange, international organisations or training modules. In Vietnam, KSP policy consultations from 2004-13 led to the establishment of Vietnam’s Development Bank, an export insurance system and a credit guarantee system. The KSP budget in 2016 was USD 20.1 million.

Through DEEP, KOICA designs, implements, manages and evaluates knowledge-exchange projects in areas such as education, health and information technology, where possible to complement grants and loans for infrastructure and equipment. The DEEP budget in 2016 was USD 48 million.
Training and scholarships: KOICA provides approximately 400 individual study grants each year, targeting government officials, and one-off training to approximately 5,000 people a year. Training courses range from general skills to specific technical skills, such as aquaculture, taxation, waste management, procurement and aviation safety. The KOICA budget in 2016 was USD 33 million for training and USD 18 million for scholarships.
Volunteers: Korea dispatches over 1 000 volunteers each year to 50 countries through World Friends Korea (WFK). Volunteers work with national governments and NGOs on priority themes. The programme accounts for approximately one-fifth of KOICA’s budget and one-tenth of its staff.

Source: Documentation provided by the Ministry of Foreign Affairs and Ministry of Strategy and Finance. For more information, see KOICA’s WFK, DEEP and CIAT webpages at http://koica.go.kr/ (accessed 31/07/2017).

A 2013 CIDC evaluation identified a lack of coherence among the 26 Korean institutions delivering technical co-operation programmes and fellowships and recommended a unified strategy (GoK, 2014). Subsequently, a 2015 external evaluation proposed an integrated results framework for Korea’s volunteer programme to help integrate it into Korea’s broader development objectives. KOICA has started to act on these findings. A recent audit report noted that Korea’s technical co-operation programmes remain fragmented and incoherent, however, and lack an integrated strategy and standard training manuals (BAI, 2017). Failing to address these findings is limiting Korea’s ability to showcase and scale-up its most effective technical co-operation programmes and to phase out activities which add little value.

In fragile states, although Korea does not explicitly use the New Deal for Engagement in Fragile States as its primary guidance, its commitment to capacity strengthening and the use of country systems reflect New Deal principles.8 In particular, Korea aims to reinforce national capacity in disaster risk reduction as a follow-on from emergency response (Chapter 7).

Korea’s regular dialogue with national governments could be extended to other partners

Korea does not generally attach conditions to its aid, other than specifying the procurement process in the case of tied loans. This policy of non-interference may contribute to the willingness of developing countries to accept Korea as a trusted broker at the global level (Chapter 1).

Korea uses bilateral consultations with partner governments – particularly aid management units and relevant sector ministries – to identify projects and discuss progress, in the spirit of mutual accountability. In Cambodia, three-year budget plans are shared by KOICA (informally) and EDCF (through a framework agreement) with partner governments, together with data on projects and, where available, results. Information is generally comprehensive for KOICA and EDCF-managed programmes and is improving for other initiatives across government. While recognising that Korea engages in formal development co-ordination structures, a number of DAC members mentioned that they would welcome more collaboration with Korea in Cambodia and other partner countries.

In addition, Korea’s annual beneficiary perceptions survey (KOICA, 2015) allows for feedback from policy makers, national implementing agencies and Korean volunteers on Korea’s work in partner countries (Box 5.2). This is good practice and other DAC members might consider introducing it.

Box 5.2. KOICA’s annual beneficiary perception survey

Every year, KOICA commissions an external body to survey the views of a range of people – high-level officials in partner countries, implementation agencies, participants in training and knowledge-sharing initiatives, and returned volunteers – on its development co-operation processes, content, results and sustainability in 40 countries. Satisfaction rankings are complemented with commentary and translated into remedial actions which are tracked in subsequent reports. The 2015 report showed high overall satisfaction levels, with senior officials generally scoring Korea well on alignment and dialogue. However, some were concerned about sustainability. Language is a consistent challenge for both volunteers and training programmes and some respondents were critical about the quality and relevance of training courses. This survey is a demanding exercise but the high response rate opens up avenues for dialogue with partner country governments and provides rich lessons for KOICA.

Source: KOICA (2015), “Beneficiary satisfaction survey on KOICA’s ODA programme worldwide”, Korea International Development Agency, Seoul.

More responsive procedures would help Korea to manage risk

While Korea is highly responsive to government requests, its centralised approach to grant management and long administrative delays limit its ability to be flexible and adapt to changing country contexts (Chapter 4). Korea engages in regular dialogue with governments and uses feedback to regularly review its portfolio of grants and loans, both globally and within country strategies. However, the Korean ODA system would benefit from stronger internal capacity to analyse country contexts and in particular situations of flux or fragility. At present, country strategies do not identify the assumptions underlying Korea’s programmes, which makes it difficult to assess how changes in context, once identified, may affect projects which are already underway. Together, these factors make it challenging for Korea to identify and manage operational, reputational and political risk in its partner countries in a systematic way.

The dedicated budget which Korea recently created for fragile states is designed to allow for short and medium-term programming in a linear sequence (KOICA, 2017b). This linear approach is well adapted to post-disaster situations. For fragile states, however, experience has shown that the root causes of fragility are better addressed by development co-operation programmes, with built-in flexibility, including mechanisms to adapt to evolving needs within existing programmes. Korea’s approach would thus be more effective if existing budget lines were made more flexible, rather than introducing new budget lines with little flexibility.

Bibliography

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GoK (2017a), “Memorandum of Korea”, OECD DAC Peer Review 2017, Government of Korea, Seoul (unpublished).

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GoK (2016b) “개발협력분개발협력분야 NGO 맞춤형 지원 방안”, [A plan to cooperate with NGOs in the field of ODA], approved by CIDC in May 2017, Government of Korea, Seoul.

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Notes

← 1. The Global Health Security Agenda (GHSA) frames Korea’s efforts under its “Safe Life for All from Infectious Diseases” initiative. GHSA is a multilateral and multi-sectoral approach to strengthening both national and global capacity to prevent, detect, and respond to infectious diseases and threats such as Ebola, Middle East Respiratory Syndrome, other highly pathogenic infectious diseases, and bioterrorism events. It is a partnership of nearly 50 nations, international organisations, and non-government stakeholders. Korea was chair of the GHSA steering group in 2017. See www.ghsagenda.org for more information (accessed 01/08/2017).

← 2. Korea is a member of the African Development Bank (AfDB), Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB) and the World Bank.

← 3. Development Alliance Korea was set up in 2012 by the Korean government as a public-private partnership system for grant ODA. It includes enterprises, civil society organisations, the academic community, and the government. Partnership guidelines were produced for Development Alliance Korea by the Korean NGO umbrella body, Korean Council for Overseas Development Co-operation and the Global Compact, but it is not clear how adherence to these standards is ensured.

← 4. The annual Asian Development Forum was initiated by Korea and Japan in 2010 as a platform for government officials in Asia, international organisations and the private sector to discuss development challenges, share experience of development co-operation and to forge and disseminate an “Asian voice” in development co-operation. Recent discussions have covered the SDGs, green growth, and development challenges for middle-income countries. For more information, see GoK (2017); Korea’s (KOICA and EDCF) response to the 2015 OECD DAC triangular co-operation survey at www.oecd.org/dac/dac-global-relations/triangular-co-operation-repository.htm; and the ADF meeting summaries on the Japanese Ministry of Foreign Affairs’ website www.mofa.go.jp/policy/oda/page_000106.html.

← 5. The EDCF-JICA-CEXIM-NEDA seminar is an annual four-party meeting held since 2012 which involves the Korea Economic Development Co-operation Fund, China Export Import Bank, Thai Neighbouring Countries Economic Development Cooperation Agency and Japan International Development Cooperation Agency, with rotating host countries. See www.jica.go.jp/english/low/news/field/2015/160129_01.html, accessed 28/07/17.

← 6. Initiatives include KOICA’s Creative Technology Solution seed fund for Korean start-ups and entrepreneurs; KOICA’s Public Private Partnership Programme, which includes a Business Partnership Programme and Innovative Partnership programme on a cost-sharing basis, with higher percentages offered to smaller companies; and KOICA’s Global Corporate Social Responsibility Program (USD 127 million in 2014-16), designed to attract private Korean expertise and investment into developing countries. For more information see www.koica.go.kr/english/schemes/civil_society/index.html.

← 7. For more information, see the 2016 Global Partnership Global Monitoring report at http://effectivecooperation.org/monitoring-country-progress/explore-monitoring-data/; baseline years for each indicator range from 2010 to 2013.

← 8. For more information, see www.pbsbdialogue.org/media/filer_public/07/69/07692de0-3557-494e-918e-18df00e9ef73/the_new_deal.pdf.