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Jason Allford, World Bank Group special representative for the Republic of Korea (World Bank Group) |
Strengthening international development assistance efforts could be a solution to lifting the stagnant Korean economy, as such aid helps create a global economic environment favorable to countries with an export-led growth model, according to the chief of the multilateral lender World Bank Group’s Korea office.
“For a country like Korea that is engaged in trading in international markets and a lot of its wealth comes from access to export markets, creating a stable and prosperous global economy is very important,” Jason Allford, World Bank Group special representative for the Republic of Korea, said in a recent interview held with The Korea Herald at the bank’s office in central Seoul.
Korea, which stopped borrowing from the International Development Association in 1973 and became an IDA donor in 1977, is set to host the final IDA21 Replenishment Meeting in Seoul from Dec. 5 to 6.
The IDA, a development finance institution under the World Bank Group, seeks to help low-income countries improve by providing loans and grants. It is the first time for Korea to host the meeting.
Allford has worked at the World Bank Group's Korea office for over three years. His previous experience includes working at WBG representing the Asia-Pacific region, and in the Australian government.
He explained that providing financial aid to countries for international development can help create stability.
“Supporting the poorest countries through IDA, supporting the middle-income countries through other parts of the World Bank is an important part of creating that stable and prosperous global environment.”
Allford said he is certain that though poorer countries may seem to play a small part in the global economy, their role will soon expand.
“A lot of global growth over the past 25 years has come from actually the emerging economic world, not from the advanced economies,” he said, citing the higher economic growth rate of developing countries, such as China and India.
He highlighted the potential for new markets, which could be very important for Korean companies seeking growth overseas due to the limited population here.
Meanwhile, the Korean government pledged an investment of 846 billion won ($610 million) for the 21st cycle of IDA, marking a 45 percent increase on-year -- a significant boost from previous years. The surge comes on the back of Korea raising its Official Development Assistance budget for 2024 by 31.1 percent to 6.29 trillion won.
However, Allford pointed out that Korea’s development success story may not be applicable to the recipient countries under current circumstances. “(Other countries face) absolutely different challenges,” he said when asked if other countries can duplicate today what Korea did in the past.
“(The) trade environment is much more difficult today, the rate of increase in trade is lower than it was when Korea was growing and the politics surrounding trade are more complicated now for countries to navigate,” he said.
“The export-led growth model may be more difficult to achieve now than it was when Korea did.”
Yet, Allford highlighted that Korea remains a textbook for growth for other countries.
“The basic lessons from Korea are still true -- invest in infrastructure, capital and education. That is something other countries still want to do,” he said, adding countries can move more quickly if they can employ technology in smart ways for development.
