“Flag Aid”: The Limitations of the Saemaul Undong Development Model and the Shortcomings of South Korea’s ODA Approach

Abstract

The Saemaul Undong (New Village Movement) was a nation-wide rural development campaign mobilised by the Park Chung Hee regime in the 1970’s. The movement has often been cited by the South Korean government as one of the leading causes for the nation’s ‘miraculous’ economic growth since its independence after the Korean War. As South Korea transitioned from being a recipient of aid to becoming a donor of aid when it joined the OECD in 1996, Korea developed the ambition to become a global leader in development. Since then, the Saemaul Undong has featured prominently in Korea’s discourse on development, portraying its own foreign aid as being distinct by virtue of the country’s own successful development experience. When the Park Geun-hye administration came to power in 2013, Seoul became further invested in presenting Saemaul Undong as a unique and universal development program that should be disseminated worldwide to aid developing countries. However, despite the successful and positive publicity it has garnered from much of the developing world, Korea’s overall contributions to development have met with international criticism. This paper provides a brief investigation into some of the main arguments of these criticisms and assesses to what extent they hold true.

Keywords: ODA, Saemaul Undong, the OECD, development, Korea

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On September 26th 2015, President Park Geun-hye of the Republic of Korea (ROK) attended a high-level forum on Saemaul Undong co-hosted by both the ROK’s Ministry of Foreign Affairs and the United Nations Development Programme (UNDP) during the United Nations Sustainable Development Summit in New York. In her keynote speech addressed to developing countries that attended the forum, she lauded the Saemaul Undong (SU), South Korea’s (hereinafter Korea) rural development model of the 1970’s, as having been essential to Korea’s economic “miracle” growth. In the end, she reaffirmed and welcomed the decision made by the UNDP and the Organization for Economic Co-Operation and Development (OECD) to base Korea’s SU experience as being an inspiration for the creation of both the New Rural Development Paradigm and the Inclusive and Sustainable New Communities Model. The SU high-level forum was a notable achievement for the ROK’s recent ongoing quest for global political influence and recognition as a world leader in development initiatives. More specifically, it showed Korea’s willingness to raise its standing amongst international organizations like the UN and the OECD as both a key contributor to the field of development and a role model for the developing world to follow in the example of.¹

Yet under the veneer of high-profile events such as this lies the reality behind Korea’s true contributions to development: the ROK has been underperforming as a donor country in terms of the allocation and efficacy of its Official Development Aid (ODA) – the OECD’s measure of a country’s aid contributions. How does one come to grips on this seemingly paradoxical state that Seoul has managed to place itself in? This paper argues that the successful branding of the SU to its ODA programs is the result of the Korean state’s selective narrative of it, portraying the movement as both universally applicable and fundamentally linked to Korea’s highly successful economic development. However, without a synchronisation of its SU development rhetoric with its actual ODA contributions in the coming years, it is argued that Korea is likely to fall from grace and be recognized as a donor country that simply distributes “flag aid”: more preoccupied with advancing its image and visibility on the world stage than at aiding real on-the-ground development in recipient countries.²

South Korea’s Global Ambitions

Much has been said on the ROK’s remarkable development from an economic basket case to now as one of the world’s most advanced economies, but relatively little has been said on its rise to become a notable political player on the global stage. Admittedly, Korea’s search for a viable role to play in the global political arena has been fairly recent: it started with gaining membership into the prestigious OECD in 1996. From that moment on, bristled with confidence from its own highly successful development, Korea set on a course to become a leader in the field of development – an aspiring goal considering how it was once itself the recipient of vast amounts of foreign aid in its developmental years. Seoul has subsequently been strategically working towards becoming a recognizable and respected donor country in the international community. Some highlights of its recent endeavours to accomplish this include gaining membership into the OECD’s Development Assistance Committee (DAC) , also known as the “donor’s club”, as “the first former aid recipient to join the OECD/DAC” ³in 2010; the hosting of the fifth G20 summit in 2010 where Korea made an active and successful attempt at adding development issues to the G20 agenda ⁴; the hosting of the Fourth High Level Forum on Aid Effectiveness in Busan in 2011 where Korea took a leading role in strengthening the bridge between DAC members and its recipients ⁵; and organizing the Global SU Leadership forum in 2014, where close to 450 delegates from forty countries across Asia and Africa gathered to hear the Park administration both lauding the success of Korea’s own developmental history through the SU and expressed the government’s will to share their unique knowledge of development worldwide.⁶

Saemaul Undong

The New Village Movement was first launched in 1970 during the heyday of Park Chung Hee’s authoritarian regime. Initially limited in its scope, the SU first began as a rural communities program that sought to develop solidarity, cooperation, and a sense of self-help mentality within rural villages in order for them to take more agency in improving their own economic livelihoods and prospects. The state would assist in this endeavour by introducing “small-scale self-help projects”⁷ designed to foster village cooperation for the purpose of increasing village income collectively as well as providing materials for villages to kick-start their own small-scale development projects. It was only after the Park regime realized the efficacy of the program at the village level that the state began to transform it into its flagship for the nationwide rural development modernization initiative and ethos campaign of the 1970’s that the SU is now commonly portrayed as today.⁸ Raising both the living standards and income levels of rural households to match those living in urban settings, the SU is nationally credited and celebrated for its contribution in leading Korea out of poverty through a joint combination of a uniquely Korean way of government-inspired development and a zealous spirit of voluntary cooperation on part of the participants.⁹

However, in an attempt to make its model seem more universally applicable to the rest of the developing world, Seoul has selectively left out in its narrative the coercive top-down nature that the movement ultimately was built on and maintained throughout: The Park regime made sure to mobilize everyone in the movement such that “not only was every level of government involved in promoting [it], an entire parallel bureaucracy was created to ensure that plans made at the national level were communicated from the President down to the local level”.¹⁰ The state’s narrative also tends to downplay or even omit the infamous Yushin constitution of 1972 and how Park effectively tailored the constitution so that he could sustain his illegitimate rule as long as he could. In light of this fact, it is hard not to see the SU movement as more of a nationwide political mobilization campaign designed to counter widespread urban resentment with his rural constituencies, which had traditionally formed his base of popular support.¹¹

Although there had always existed grassroots activities in the spread of the SU development model since its inception, it began its process of becoming formally institutionalized as Korea’s National ODA Brand in 2010 when the Committee for International Development Cooperation (CIDC), the group responsible for coordinating Korean ODA, published its Strategic Plan for International Development Cooperation, in which it highlighted the necessity of “[developing] an aid program for global Saemaul Undong”¹². From there, the advocating of the SU as Korea’s distinctive ODA style continued to circulate until the CIDC in 2014 came up with its Comprehensive Action Plan for Global Saemaul Undong,¹³ which paved the way for the realization of the Global SU Leadership forum the same year. Not long after the closing ceremony of the forum, the Korean government, through its web media portal, proudly headlined “Saemaul Undong becomes global development model”.¹⁴

The Shortcomings of South Korean ODA

The SU model has met with considerable appeal worldwide, and it appears as if Korea’s international recognition and prestige as a donor country has largely been established at this point in time. However, a true judging of Korea’s commitment to development lies in the review and evaluation of its recent ODA history, and based on the evidence gathered, it is argued that Korea has simply not been rising to the occasion enough to merit being considered a potential world leader in development. The three main shortcomings of Korean ODA and its characteristics are outlined in the following.

First, despite being admitted inside the DAC, the ROK has not been keeping up to the standards expected of members inside the committee. When Korea first joined in 2010, it pledged to increase its ODA/GNI percentage to 0.25 by 2015, but as Jeong notes, “Korea’s aid volume has barely surpassed 0.1% of GNI…[lagging] behind all the advanced economies when it comes to the size of ODA”¹⁵ since admission. In 2011, Korea’s ODA volume reached a figure of nearly $1.33 billion, which looks impressive at the outset until one realizes it accounted for a mere 0.12 percent of its GNI the same year when the average ODA/GNI percentage of all DAC members was 0.32.¹⁶ Quantitative measures of DAC members that not only take into consideration the total volume of ODA and ODA/GNI ratio but variables such as humanitarian grants-ODA ratio, grants-ODA ratio, and multilateral aid-ODA ratio all rank Korea near the bottom of their rankings.¹⁷ The Commitment to Development Index, which quantifies the world’s richest countries according to their policies that affect the rest of the world’s poorer populations, ranked Korea consistently at the bottom of their list from 2010 to 2014 despite five new countries getting listed in their index since 2010.¹⁸

Second, it is becoming increasingly clear with the progression of Korea’s ODA initiative that the ROK has little desire to change its traditional strategic prioritization of the Asia-Pacific region over others, thus making its contributions to development not so much globally spread as it is, in reality, regionally biased. For instance, a reviewing of the government’s Strategic Plan and Mid-term ODA Policy for 2011-2015, which outlines the allocation of its ODA orientations for each geographic region, shows the ROK’s clear desire to see the Asia-Pacific region as being the primary beneficiary of its ODA flows.¹⁹ This regional bias should not be surprising given its ODA history of favouring Asia over other regions. In 2005, 81 percent of its ODA was directed to the Asia-Pacific, and while that figure had dropped to 65 percent in 2010, Korea’s ODA to the region had actually increased from its 2009 figure of 55 percent.²⁰ When we consider the fact that in 2009 the then President of the ROK Lee Myung Bak announced the New Asia Initiative in Jakarta, Indonesia, underlining Korea’s highly aspiring ambition to represent the interests of other Asian countries on international platforms ²¹, it is difficult not to see a correlation between the timing of the announcement and the sudden rebounding increase of its ODA allocation to the Asia-Pacific in 2010.

Third, the ROK continues to lean heavily towards bilateralism, loans, and tied aid as the three main pillars in its strategy of distributing its ODA worldwide. In its Strategic Plan and Mid-term ODA Policy for 2011-2015, Korea affirmed its decision “to maintain the bilateral to multilateral ODA ratio at 70:30”²² until 2015 such that its 2012 ODA volume of $1597.5 million was divided into $1,183 million as bilateral aid and $414 million channeled as multilateral aid.²³ In regards to its ratio of loans to grants in its ODA flows, the government has set a ratio of 40 to 60 percent to be maintained until 2015 despite international criticism.²⁴ And while Korea has made a clear effort to reduce the high percentage of its tied aid (foreign aid given on the condition that the receiving country use the funds to buy the goods and/or services of the donor country) by pledging in 2009 another lofty goal of having 75 percent of its aid untied by 2015,²⁵ the DAC’s special peer review of Korea’s contribution to international development in 2012 sharply noted that “the untied proportion of Korea’s total aid was lower in 2010 (at 32 percent) than in 2009 (44 percent).”²⁶

These findings have serious implications, as many critics to the ROK’s approach to ODA have already made clear. The lopsided favouring of bilateralism over multilateralism suggests that Seoul is heavily concerned and preoccupied in advancing its image – its visibility – as a donor country, which strongly resonates with Jeong’s argument that the purpose of branding SU to Korea’s ODA was largely to distinguish itself from other established donors in the DAC.²⁷ Distributing aid bilaterally ensures that recipient countries know who is directly funnelling them aid, and as the donor, it has the power to both selectively choose who and where their aid funnels into. Korea’s strategic prioritization over the Asia-Pacific would not have been possible if it had relied on multilateral institutions to channel the bulk of its ODA. Regarding Korea’s leaning towards the use of loans over grants, we know that the majority of the DAC members “have portfolios comprised nearly entirely of grants”²⁸, which is due to the fact that loans, concessional or not, hold the potential to damage a recipient country’s debt sustainability, which is why there has been a wide consensus internationally that providing ODA in grants should take priority over ODA in the form of loans. Yet Korea, while admittedly having made some concessions in the past, continues to be resistant to international donor norms despite being a formal member of the DAC. Finally, the DAC peer review and its criticism of Korea’s preference of tied aid to untied aid reveals that Korea continues to make pledges to the international community, specifically to the DAC, that it either never had the intention of following through with or lost interest halfway as it prioritized its self-interests over international donor norms.

Conclusion

These points of contention are not to condemn the ROK’s efforts in trying to become a respected donor country. It is true that Korea has made significant strides in its contributions to development and continues onwards to steadily increase its ODA flows, and less we forget, Korea’s own transition from being a former aid recipient to becoming a member of the elite DAC amongst OECD members should be considered a significant accomplishment in its contributions to global development on its own. The purpose of raising these points, rather, was to illustrate the discontinuity between the highly celebrated Global SU development model on the one hand and the relatively minimal impact that Korea’s ODA efforts are making towards actual on-the-ground development. Seoul seeks to become the world’s leading face in development by being the one to push forward “a paradigm shift in development cooperation from financial aid and ‘aid effectiveness’ to the promotion of economic growth, ‘development effectiveness’ and ‘knowledge sharing’”.²⁹ Through the revival and championing of SU as a development model, they believe, it will not only put a distinguishable image behind Korean ODA contributions but also provide the blueprint for developing countries to successfully implement their own development initiatives, thus providing the Korean state the justification to keep its material ODA volume set relatively low.

But this would be a big mistake for the Korean government to assume. The SU has been narrated by the state in such a way as to make it seem universal and exportable as a “one size fits all” approach, but the model itself was born out of the specific context of Park’s illegitimate authoritarian rule after the 1972 Yushin reforms. Additionally, international criticism is growing over the way in which the ROK is pursuing its ODA programs. Korea cannot continue to hold itself to be exceptional so as to believe it is worthy of being exempt from contributing its ODA in the same volume and manner as the majority of DAC members do by virtue of its own “special” new development model. Seoul must make a renewed effort to abide by the guidelines of the DAC and develop an ODA philosophy that is both coherent with the practices of the larger donor community; free from significant regional biases and political undertones that take into account both the recipient country’s already established relations and potential future relations; and push aside the self-interested unilateralism of its ODA approach to gain an international reputation as a country that is serious in both promoting and contributing to the genuine development of recipient countries worldwide.

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The content of this article does not represent the positions, research methods, or opinions of the Synergy Editorial Committee. We are solely responsible for reviewing and editing submissions. Please address all scholarly concerns directly to the contributor(s) of the article.

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Bryan Roh is a third year student studying Sociocultural Anthropology and Contemporary Asian Studies at the University of Toronto, Woodsworth College. Bryan currently serves as both an event reporter and copy-editor for Synergy’s East Asia editorial section. He holds a research interest in South Korea’s rise to become a middle power in international relations as well as exploring the peculiar resiliency of Asian authoritarian states like China.

Endnotes