A Study on the Strategies of Korea's Regional Aid for Trade towards Central Asia
Park, Yu Mi
Hankuk University of Foreign Studies. Graduate School of International & Area Studies
Kim, Bong Chul
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A Study on the Strategies of Korea's Regional Aid for Trade towards Central Asia Korea is no.1 country in DAC of OECD in 2014 in terms of growth rate of ODA and was top growth rate ODA country in DAC of OECD from year of 2008 to 2012, five years in a row. And Korea became 16th ODA country in the world with the scale of ODA assistance related tentative statistic in 2013 increased by 1.7 billion 40 million us dollars. Proportion of AfT in ODA is also growing steadily and this has a close connection with the fact that the development efficiency of ODA has been emphasized internationally these days. In this situation, Korea is also increasing AfT related support steadily. This study has drawn a conclusion of Korea's AfT plan to Central Asian countries. Central Asian countries have been formulating and implementing many economic development plans to escape from the state of least-Developed Countries ever since the collapse of the Soviet Union. Of them all, trade invigoration has been carried forward as an important key policy target and international organizations and leading donor countries are assisting it by conducting various AfT related supports in Central Asia. Countries in Central Asia commonly have been craving for economic improvement and especially the case of Korea as trade has been crucial key to successful economic development has significantly distinguished status in the eyes of Central Asian countries. Currently China is pouring aggressive support mainly for infrastructure construction to Central Asia and it is creating not only Korea but also the West to hold influence of China in check. Foreign aid of the West has standards and orders that have been established thru long history. It is being placed as excellent practice to conduct the project with recipient country's civil society organization with emphasizing the responsibility and the transparency of aid organization. However China is approaching the foreign aid issue with South-South cooperation concept by differentiating themselves from the West that has history of colonization. The foreign aid of China in depth has no regulations and it is difficult to practice independent rules consistently. Sometimes commercial understanding is involved by providing the loan with generous conditions and conducting aid program under the contract with Chinese enterprises. Lately the Central Asia people feel resistance to Chinese dealers and worry over Chinese too much expanded influence. And it was also be advised that it could be played as a window of opportunity to Korea but Korea must have aid strategy which only Korea can have the advantage that will differentiate Korea from china. Central Asia region countries being landlocked country are burdened with relatively high cost of logistic and custom clearance due to geographical disadvantage and it is causing negative impact to national competitiveness. Central Asia countries know that economic development can't be achieved without increase of trade. Such geographical disadvantage can't be overcome by single country level. But after dissolution of Soviet Union, the cooperation within the region wasn't enough not only to improve the development of transportation, Energy and natural resource but also to even maintain the previous level. Therefore it was necessary to strengthen the regional collaboration to complete the transformation and promote the long-term development and in the result of such cooperation, construction of new Silk Road and the project similar to this has been carried forward by the joint effort of Central Asia and its neighboring countries. Central Asian countries have a high potential of development in both intra and extra-area trade. Of course it is true that high growth rate in trade of some Central Asian countries is mainly rooted from improved export of natural resource such as oil and natural gas. That is why it is requested to introduce additional polices to bring forth economic growth through the diversification of trade. The possibility of the diversification of trade other than the natural resource sector can be the important indicator that whether individual Central Asian countries can achieve an economic growth through trade by overcoming geographical disadvantage. Consequently it is requested to Central Asian countries to constantly strive for potential benefit of extra-area trade by invigorating it. Hereupon, I am proposing the package program for Korea's AfT to Central Asia; one that free from simple donation based small business and will provide practical assistance to realize advanced AfT. The first is Hardware element. It is indicating all necessary material elements ranging from large scale such as material support and transportation infrastructure for trade invigoration to small scale such as equipments supply for trade. The second is Software element. Trade invigoration capability comes from human resources. Even if there is material infrastructure in placed it becomes useless when there is shortage of human power to utilize such infrastructure or they lack the capability. So they need short- and long-term education & training program, hand-down technique, support research activity, consulting and entrepreneurship education to improve human power for traders and retail dealer. The third is Strategy element. This means the activity of drawing the most proper and most necessary support program in consideration of framework condition of recipient country. For instance detail activities of strategy element can be as follows: development of national strategy, analysis of innovation system, overall plan for trade invigoration, support and draw of trade related law, policy & restriction that suite condition of Central Asian countries.