[K Original Tracker] ① 36 Trillion Won Spent on ODA, 70,000 Projects 'Proliferation'... The History of Budget Sharing

Comprehensive Analysis of 4.85 Million Overseas Aid Data
36 Trillion Won in Overseas Aid Since 2010

'No Adjustment' Rule Prevents Budget Office Intervention
ODA Reform Blocked by Conflict Between Ministry of Strategy and Finance and Ministry of Foreign Affairs

Through the tragedy of the Korean War, the Republic of Korea had no choice but to rely on international aid. The United Nations (UN) resolved to provide Civil Relief and International Kindness (CRIK) to Korea, and numerous UN allied countries sent aid, receiving approximately $58 million in aid in 1950, which laid the foundation for Korea’s full-scale economic growth starting in the 1960s. At that time, over 1,800 experts from various countries introduced scientific and technological equipment to Korea and engaged in the development of mining and manufacturing industries as well as road construction.

Building on this, Korea achieved remarkable economic growth and began full-scale Official Development Assistance (ODA) to developing countries in the late 1980s with the establishment of the Economic Development Cooperation Fund (EDCF) and the Korea International Cooperation Agency (KOICA). In 2010, Korea joined the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD), becoming an advanced donor country. Korea became the world’s first country to transition from an aid recipient to an aid donor.

However, over the past decade, the effectiveness of Korea’s aid to developing countries has not materialized. This is due to the entrenched practice of “budget sharing” among government ministries. Dozens of ministries divide the ODA budget, resulting in a proliferation of small-scale aid projects. The same situation applies to next year. The Yoon Seok-yeol administration significantly increased the ODA budget for next year to implement the “Global Hub Nation” national agenda. However, due to inter-ministerial conflicts, the splitting of the ODA budget continues, highlighting the urgent need for project restructuring and related legal amendments.

Comprehensive Analysis of 4.85 Million ODA Data Points... The History of Budget Sharing

Government ministries and agencies sharing the ODA budget. After analyzing the 2022 ODA projects using Python, they were visualized with a Voronoi treemap model.

On the 25th, an exhaustive analysis of Korea’s ODA budgets from 2010 to last year revealed that during this period, Korea’s ODA projects totaled 77,017. Typically, the government classifies ODA projects conducted simultaneously in multiple countries as a single project, but for a more rigorous analysis, the investigative team examined all detailed projects by country. The majority of ODA project implementing agencies were Korean government ministries and public institutions, accounting for 44,050 projects, followed by public organizations with 7,756 projects.

ODA refers to funds provided by developed countries to support the economic development of developing and underdeveloped countries. It is divided into concessional loans and grants provided without repayment. This analysis utilized in-depth data published by the Office for Government Policy Coordination. It covered 67 data points per project, totaling 4.85 million data points, including project agencies, types, content, and recipient countries.

During this period, the Korean government’s ODA project costs to recipient countries amounted to $26.92 billion (36 trillion KRW). This increased from $1.26 billion in 2010 to $2.785 billion last year, growing at an average annual rate of 7.7%. As the scale of ODA expanded, the number of agencies securing aid project budgets increased exponentially. In 2013, when the implementing agencies were clearly recorded, 326 agencies received government budgets to carry out ODA, but last year this number rose to 433, an increase of 107, indicating greater fragmentation.

Despite Dedicated ODA Agencies... Hundreds of Agencies Grabbed Budgets

In this process, the role of agencies specializing in ODA diminished. KOICA, responsible for grants, and EDCF, responsible for concessional loans, accounted for 37.6% and 31.3% of ODA projects respectively in 2010. However, their shares gradually declined, with KOICA at 22.3% and EDCF at 26.3% last year. Due to increased fragmentation, the dedicated agencies performed less than half of all projects. Conversely, the role of unrelated ministries expanded. The share of “others,” which lack ODA expertise, rose from 19.1% in 2010 to 34.3% last year, an increase of 15.2 percentage points.

The fragmentation of ODA budgets among dozens of ministries is a phenomenon unique to Korea. In Sweden, for example, the Swedish International Development Cooperation Agency spends $3.3265 billion (55.7%), and the Ministry of Foreign Affairs spends $2.4976 billion (41.8%). Only a few ministries receive ODA budgets. The UK allocates 68.9% of its total ODA budget, $11.3537 billion, to the Foreign, Commonwealth & Development Office. Japan’s International Cooperation Agency executes 65.3% of the total $14.34 billion. The US (59.0%) and Germany (52.6%) show similar patterns.

Korea’s practice of budget sharing in ODA began during the Lee Myung-bak administration. At that time, President Lee made ODA expansion a national agenda, and other ministries’ international cooperation projects were indiscriminately incorporated into ODA. A related ministry official, who requested anonymity, said, “The ODA target was 0.3% of gross national income at the time,” adding, “Since the budget had to be increased, the Ministry of Strategy and Finance bundled all other ministries’ developing country projects into ODA.”

“Don’t Touch It”… Budget Office Helpless Against Rigid Regulations

Government ministries and agencies sharing the ODA budget. The 2024 ODA budget projects are visualized using a tree map model.

Calls to eliminate the budget sharing practice have grown under the Yoon administration. President Yoon has repeatedly sent messages to stop dividing budgets and invest decisively where needed. When preparing the 2024 budget, the Ministry of Strategy and Finance was ordered to conduct a fundamental review. In fact, the research and development (R&D) budget, which President Yoon directly criticized as “dividing and sharing,” was reduced by 5.2 trillion KRW (16.6%) from 31.1 trillion KRW, with investments concentrated in advanced bio, artificial intelligence (AI), and quantum fields.

However, ODA was not restructured in the 2024 budget. Thirty-four ministries secured the 6.5317 trillion KRW ODA budget for next year, with the Ministry of Foreign Affairs receiving 2.8964 trillion KRW (44.3%) and the Ministry of Strategy and Finance 2.7057 trillion KRW (41.4%). The remaining 929.6 billion KRW was divided among 32 agencies. Except for the Ministry of Agriculture, Food and Rural Affairs (185.7 billion KRW), Ministry of Education (161.4 billion KRW), Ministry of Trade, Industry and Energy (97.9 billion KRW), and Ministry of Health and Welfare (93.5 billion KRW), other agencies received less than 1% of the ODA budget. The National Election Commission (800 million KRW), Public Procurement Service (500 million KRW), Board of Audit and Inspection (300 million KRW), Anti-Corruption and Civil Rights Commission (300 million KRW), Fair Trade Commission (100 million KRW), and National Tax Service (100 million KRW) each received single-digit ODA budgets.

The reason ODA budgets were not fundamentally reviewed is due to regulations. Each ministry’s ODA projects are decided through first review by the Ministry of Foreign Affairs and second review by the Office for Government Policy Coordination. Then, the International Development Cooperation Committee (IDCC) finalizes the comprehensive implementation plan for ODA. The Ministry of Strategy and Finance mostly approves the ODA budget according to the IDCC’s decision. This is because of the regulation stating, “The Minister of Strategy and Finance must respect the comprehensive implementation plan when preparing the budget.” This means that even if there are inefficient projects, the Ministry of Strategy and Finance finds it difficult to cut the budget.

Clashes Between Ministry of Strategy and Finance and Ministry of Foreign Affairs... ODA Reform Remains Distant

A Ministry of Strategy and Finance official said, “The practice of multiple ministries dividing the ODA budget is clearly problematic,” but added, “To solve the budget splitting issue, the way the Ministry of Foreign Affairs and the Office for Government Policy Coordination approve projects must be changed.” Another official lamented, “The regulation to respect the budget seems abstract but is very powerful. If the Ministry of Strategy and Finance’s budget office restructures ODA projects, it risks being seen as disrespecting the Ministry of Foreign Affairs and the Office for Government Policy Coordination, making it practically impossible.”

To eradicate ODA budget sharing, the allocation method must be changed, but no one dares to act due to sharp inter-ministerial conflicts. The Ministry of Strategy and Finance and the Ministry of Foreign Affairs have clashed over ODA project leadership for over a decade. In the past, high-ranking officials such as vice ministers from both ministries exchanged harsh words and raised voices at meetings chaired by the Prime Minister. There are concerns that cutting the Ministry of Foreign Affairs’ ODA budget could reignite long-suppressed conflicts.

Experts point out that with Korea’s ODA budget greatly increased, a review for efficient execution is necessary. Lee Tae-ju, Dean of the College of Liberal Arts at Hansung University, criticized, “In the UK, Germany, the US, and Japan, at most two ministries handle ODA. Korea’s structure, where ministries freely spend a huge amount like 6.5 trillion KRW, is problematic.” He advised, “Since taxpayers’ money is involved, ODA should now be managed as a national integrated strategy.”

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This project was supported by the Press Promotion Fund, funded by government advertising fees.

This content was produced with the assistance of AI translation services.