[Editorial] Forum on development aid

Korea joined the Development Assistance Committee of the OECD in November 2009, becoming the first country since the organization’s birth to go from aid recipient to donor. Since then, Korea has sought to chart a new course for development cooperation based on its unique growth experience.

As part of such efforts, Korea will host the High-Level Forum on Aid Effectiveness, the world’s largest and highest-level conference on development aid. The three-day forum is to kick off tomorrow in Busan, with the attendance of some 2,000 delegates, including ministers from across the globe, leaders of international organizations and private-sector representatives.

Prominent participants include U.N. Secretary-General Ban Ki-moon, OECD Secretary-General Angel Gurria, U.S. Secretary of State Hillary Clinton and former British Prime Minister Tony Blair.

The Busan forum is the fourth of its kind, with the three previous meetings held in Rome in 2003, Paris in 2005 and Accra of Ghana in 2008. As its name suggests, the forum was launched to improve the effectiveness of development aid.

Yet the Busan conference is not just about aid effectiveness. It is more about development effectiveness. Participants in the meeting will discuss a new paradigm for development based on a review of progress in improving the handling of aid funds.

The main theme of the meeting is forging a new global partnership for effective development cooperation. To enhance development effectiveness, close cooperation among donors has become as important as collaboration between donors and recipients.

This is so because of the emergence of a group of non-DAC donors ― newly industrialized economies such as China, Brazil, India, Russia and South Africa. These countries have reshaped the global development aid landscape by setting their own agenda based on their global power, wealth and influence.

They opened new avenues of development cooperation by helping recipients through their own aid programs. Thus, they demonstrated the importance and effectiveness of South-South cooperation as a driver of growth.

The role of these non-DAC donors is expected to grow down the road as many European countries are scaling back their development assistance amid an economic downturn.

Yet the emergence of these powerful players in the aid arena also caused coordination problems. They increased competition among donors for recipient recognition and worsened the already serious fragmentation of aid.

The need to harmonize aid activities has become all the greater with the active operation of nongovernmental organizations and private institutions such as the Bill and Melinda Gates Foundation.

The Busan conference is hence focused on promoting partnerships among diverse donors. It is the first forum where non-DAC countries and private-sector players will participate.

As a country that has successfully transitioned from destitution to a developed nation, Korea is especially well positioned to bridge long-time donors and new actors on the one hand, and donors and recipients on the other.

At the Busan forum, Korea will also seek to reshape the current development framework, which is represented by the Millennium Development Goals pursued by the United Nations.

Korea’s approach to development is summed up in the Seoul Development Consensus. Endorsed by the leaders of G20 nations at the 2010 Seoul summit, the consensus offers a set of development principles, which are in sharp contrast with those of the Washington Consensus.

The main tenet of the Seoul Consensus is a focus on economic growth. The underlying logic is that a recipient country would be able to attain MDGs, such as eradicating extreme poverty and reducing child mortality, more easily if it can achieve sustained economic growth.

This implies that priority in allocating aid funds needs to be given to growth-facilitating projects such as infrastructure construction, job creation, human resource development and trade promotion.

Consequently, this approach stresses the role of government in economic growth, especially the government’s ability to draw up and execute a well-advised development strategy.

A developing country would be able to devise a better strategy if it can get help from countries with development experience and know-how. This is why Korea is keen to share its development experience with recipient countries.

Korea has been seeking to offer a new development perspective based on its growth experience. It remains to be seen how much traction its approach will gain at the Busan conference. To make its perspective more convincing, Korea needs to refine it and address its weaknesses.