Busan and Beyond South Korea and the Transition

Busan and Beyond: South Korea and the Transition from Aid Effectiveness to Development Effectiveness Eun Mee Kim* & Jae Eun Lee** * Dean & Professor, Graduate School of International Studies Director, Institute for Development and Human Security ** Researcher, Institute for Development and Human Security Ewha Womans University “ 2014 Australasian Aid and International Development Policy Workshop” Australian National University & the Asia Foundation February 13 -14, 2014 Please do not cite, quote or distribute without the authors’ written permission.

Table of Contents I. Introduction II. From Aid to Development Effectiveness III. New Global Partnership IV. South Korea’s Challenges as an Emerging Donor V. Asian Approaches to Development Cooperation 2

I. Introduction Global Partnership for Effective Development New global development cooperation framework launched Growing importance of emerging donors’ influence in development activities South Korea as an emerging donor Joined OECD DAC as 24 th member Hosted G 20 Summit Meeting (2010) & Busan HLF-4 (2011) Led discussion and efforts towards a new global framework Encouraged participation of emerging donors (including BRICs) Steering Committee of Global Partnership Representative of providers of development cooperation (with EU and US) 3

II. From Aid to Development Effectiveness 1. Evolution of Aid Effectiveness Framework Millennium Development Goals by 2015 Monterrey Consensus (2002) Commitment to increase development finance ODA/GNI = 0. 7% HLF-1 (First High-Level Forum on Aid Effectiveness) Rome (2003) Need for more effective management of aid for maximization of development impact Led by OECD/DAC WP-EFF Aid Harmonization 4

HLF-2, Paris (2005) Paris Declaration endorsed 5 Principles: Ownership, Alignment, Harmonization, Results-based Management, Mutual Accountability Practical and action-oriented roadmap by 2010: Goals with specific indicators & target years, monitoring process HLF-3, Accra (2008) Accelerate and deepen implementation of the Paris Declaration Three areas for improvement: Ownership, Inclusive Partnership, Delivering Results 5

Analysis of the Paris Declaration Monitoring Survey (OECD, 2011): Real, but slow and uneven results Real changes in aid management and delivery practices Paris Principle as global norms for development cooperation Targets far from being universally achieved An Increasingly Complex Development Environment New Global Development Challenges including food insecurity, climate change and armed conflict Enlarging role for different actors and stakeholders Aid as a catalyst of development - complementary to other development resources 6

2. HLF-4, Busan (2011) The most inclusive agreement on global development cooperation 2, 500 participants: (1) 160 donor and partner countries including South-South partners; and (2) 70 international organizations, NGOs, congresses, and business corporations Negotiating status given to diverse development stakeholders on an equal footing: NGOs, business corporations Reaffirmed commitment for MDGs and sustainable development 7

“Busan Partnership for Effective Development Cooperation” (Outcome Document) Shared Principles: Ownership of development priorities by developing countries Focus on results Inclusive development partnerships Transparency and accountability Shared Principles of ownership, results and accountability are directly derived from the Paris Principle New Commitments: Inclusive partnerships; Transparency 8

Busan HLF-4: Incorporating aid effectiveness and development effectiveness Commitments for Effectiveness of Development Cooperation: Ownership, Results and Accountability Transparent and Responsible Cooperation Sustainable Development in Situations of Conflict and Fragility Strengthening Resilience and Reducing Vulnerability Commitments for Effective Development: South-South Cooperation & Triangular Cooperation Private Sector and Development Combating Corruption and Illicit Flows Climate Change Finance 9

Focus shifts from technical aid effectiveness towards new development effectiveness agenda Development effectiveness is a progressively more ambitious agenda, more complex, and can create difficulties in operationalization and evaluation Concerns about the unfinished business of Paris and Accra Global Partnership for Effective Development Cooperation as the New Framework is launched (June 2012) 10

III. New Global Partnership (June 2012 - ) 1. Governance Ministerial Meeting Agenda & Priorities Support Tasks & Assignments Steering Committee Guidance Secretariat: OECD/ UNDP Support (1) Ministerial Meeting Reviews progress in implementing Busan commitments Meets every 18 -24 months, alternating back-to-back with UNCDF (UN Capital Development Fund) and OECD DAC High Level Meetings (2) Steering Committee Steers the work of the ministerial meeting including strategic priorities and agenda Acts as Ambassadors of Global Partnership to other international/regional processes 3 Co-Chairs and 15 Steering Committee Members 11

(3) Secretariat: OECD & UNDP will partner with OECD to support the new framework UNDP newly joined the secretariat for the new framework Helps strengthen legitimacy of the HLF process and the new framework for universal rules and norms Division of labor: OECD: Analytical expertise UNDP: Brings breadth based on international development work in the field 12

(4) Monitoring Indicators and Process Global Monitoring of the Busan Partnership Participation of South-South providers in the monitoring framework is voluntary 10 Indicators: Efforts to reduce burden associated with collecting data Indicators on civil society, private sector, and gender equality newly introduced Indicators on civil society & private sector to be further discussed and detailed definitions and measurement issues to be finalized by late 2012 (Hong 2012) Target Year: 2015 13

Comparison of HLF Principles Paris Principle HLF-4 Shared Principles HLF-4 Commitments for Effective DC HLF-4 Commitments for Effective Development HLF-4 Indicators for Monitoring Ownership, Results and Accountability South-South and Triangular Cooperation Results Alignment Focus on Results Transparent and Responsible Cooperation Private Sector and Development Civil Society Harmonization Inclusive Development Partnerships Sustainable Development in Conflict and Fragile Situations Combating Corruption and Illicit Flows Private Sector Managing for Results Transparency and Accountability Resilience and Reducing Vulnerability Climate Change Finance Transparency Mutual Accountability Predictability Parliamentary Scrutiny Mutual Accountability Gender Equality Effective Institutions Using developing countries’ system Aid Untying 14

2. Remaining Challenges (1) “Loose alliance” in order to encourage participation of emerging donors “Differentiated commitments” to encourage South-South partners’ participation in the new framework Reduce commitments to common principles as “voluntary” for South-South Cooperation of BRICS (2) Need to ensure monitoring of implementation (3) Follow-up Process Impact of the Busan Partnership depends on follow-up Ensure that monitoring indicators are applied to traditional donors and gradually extended to other HLF-4 stakeholders (Oxfam 2012) 15

IV. South Korea’s Challenges as an Emerging Donor 1. Leadership in the Steering Committee Further strengthen South-South partners’ political commitment Contributed to active participation of South-South partners in the Busan Partnership Bridging Role between traditional and emerging donors Steering Committee South Korea is 1 of 3 representatives of Providers of Development Cooperation Co-Chairs (Ministerial Level): Ms. Armida Alisjahbana, Minister of State for National Development Planning , Indonesia Ms. Justine Greening, Secretary of State for International Development, U. K. Ms. Ngozi Okonjo-Iweala, Minister of Finance, Nigeria Steering Committee Members (Senior Level): Representatives of Recipients (5), Recipient and Providers (1), Providers (3) of Development Cooperation, Private Sector (1), Parliamentarians (1), Civil Society (1), Multilateral Development Banks(1) , UNDP/UNDG (1), and OECD/DAC (1) 16

Steering Committee Members Recipients (5) Mr. Brahim Adoum Bachar, Secretary General, Ministry of Economy and Planning Chad Mr. Luis Fernando Carrera Castro, Secretary for Planning and Programming, Presidency Guatemala Mr. Iqbal Mahmood, Senior Secretary, Ministry of Finance Bangladesh Ms. Noumea Simi, Assistant Chief Executive Officer, Ministry of Finance Samoa Mr. Helder da Costa, Director of the International Secretariat of the G 7+, Ministry of Finance Timor-Leste Recipients & Providers (1) Mr. Luis Olivera, Executive Director, Peruvian Agency for International Cooperation (APCI) Peru Providers (3) Mr. Gustavo Martin Prada, Director EC Ms. Enna Park, Director General for Development Cooperation, Ministry of Foreign Affairs and Trade South Korea Mr. Donald Steinberg, Deputy Administrator, US Agency for International Development U. S. Private Sector (1) John Sullivan, Center for International Private Enterprise Parliamentarians (1) Mr. Martin Chungong, Director, Division of Programmes, Inter-Parliamentary Union Civil Society (1) Ms. Mayra Moro-Coco, Better. Aid Multilateral Development Banks (1) Ms. Sophie Sirtaine, Director, Corporate Reform and Strategy, Operations Policy and Country Services, World Bank UNDP/UNDG(1) Ms. Sigrid Kaag, Assistant Secretary General and Assistant Administrator, Bureau for External Relations and Advocacy, UNDP OECD/DAC (1) Mr. Brian Atwood, Chair, Development Assistance Committee, OECD 17

2. Develop National Strategy for Global Partnership Reform policies and processes for development cooperation More coherent and harmonized approach based on agreement by diverse actors 18

3. Strengthen Political Support for ODA Strong political commitment of the new President (2013 -) Reaffirmation of goals of South Korea’s ODA: Volume and Global leadership Continued improvement of the Aid System Increase participation and involvement of CSOs Human resource building at home: Education and training of development cooperation experts 19

V. Asian Approaches to Development Cooperation 1. Asian Development 1) Rapid Economic Development • Developmental State • Education • Foreign aid utilized for domestic institution and human capacity development Domestic Capability Development 20

2) Key institutions of Japan, South Korea, China Japan Key Institutions China 1945 -1974 Period of Rapid Industrialization South Korea 1961 -1980 1978 -1992 Government (Developmental State) Ministry of Int’l Trade and Industry (MITI) Economic Planning Board (EPB) National Development and Reform Commission (NDRC) Local Capital Zaibatsu, Keiretsu Chaebol State-owned enterprises (SOEs) Foreign Capital • ODA • Trade • ODA • FDI • Trade 21

2. Asian Development Cooperation 1) Transition from aid recipient to donor 2) Regional Development: Use ODA for building regional economic relationship and development in Asia 3) ODA in Comprehensive Development: ODA as part of a larger economic development stimulus package including foreign direct investment (FDI) and trade “Asian Solutions to Asian Problems” 22

Asian Cooperation: Overview of ODA, Trade and FDI Flows of Japan, South Korea and China (2011) Japan Trade FDI China Australia Total gross disbursements (USD million) 10, 831. 4 1, 324. 6 41. 5 4982. 9 Asia share (%) ODA South Korea 22. 5 47. 4 32. 8 33. 4 Total volume (USD million) 1, 678, 564 1, 079, 627 3, 641, 865 565, 273 Asia share (%)* (Export vs. Import) 18. 4 vs. 20. 6 12. 4 vs. 12. 6 42. 4 vs. 40. 8 - Total outward flow (USD million) 114, 353 20, 355 65, 177 12, 655 34. 8 59. 5 - -29. 3** Asia share (%) Source: ODA Gross Disbursements- International Development Statistics; Chinese ODA – 2011 China’s White Paper on Foreign Aid. Trade- World Bank. FDI- United Nations Conference on Trade and Development FDI Statistics; OECD Statistics for Asia share. * Asia share includes trade from and to member countries of ASEAN +3. ** Asia’s inflow of FDI is greater than its outflow. 23

3. Asia’s Post 2015 Development Challenges 1) Development Cooperation in Post-War and Conflict Context Countries in fragile situations face triple challenges of human insecurity, underdevelopment and poverty Human (in)security, development, and poverty are closely connected and mutually reinforcing § § • • Conflict is an important cause that has led to increase in poverty … [and] affects well -being through displacement of people from their home and livelihoods as refugees and into poverty (MDG Report, 2008) Fragile states are caught in a vicious cycle of failed government, persistent poverty, and conflict (Collier, 2007) Bridging security and development in development cooperation: Poverty reduction and development in the context of fragile security and post-conflict require different goals and strategies.

2) Humanitarian Assistance and Development Cooperation Short-term humanitarian assistance and long-term development cooperation have not been brought together in the field. § However, disasters have disproportionately affected the least developed and developing countries. Meeting the MDGs is severely challenged in many countries by losses from manmade and natural disasters (UNDP, 2004). § Short-term disasters exacerbate existing poverty and insecurity They become long-term poverty and insecurity cases. Bridging the divide between short-term humanitarian assistance and long-term development cooperation is critical in the Post 2015 world. §

3) Human Capacity Development and Empowerment § Gender inequality remains a challenge § Improvements in gender development (education, employment) have not led to gender empowerment § Concerted efforts are needed to improve gender empowerment for sustainable development and poverty reduction to be: “fair, smart, and transformative of societies” (Faust, 2013). ØPost 2015 Development Cooperation: Domestic capability development (education + employment + empowerment) Sustainable development 26

27