[NSP Report 60] Changes in the 21st Century Development Cooperation Architecture and Korea

Professor of Political Science and International Relations, Chung-Ang University. He graduated from Yonsei University with a degree in Political Science and International Relations and obtained a Ph.D. in Political Science from the University of California at Berkeley. He has held positions as a researcher at the Institute for 통일 (Unification) Studies, a postdoctoral researcher at UC Berkeley's APEC Study Center, and an Assistant Professor of Political Science at the National University of Singapore, and an Assistant Professor of International Relations at Yonsei University. His recent publications include Northeast Asia: Ripe for Integration? (co-edited) and Trade Policy in the Asia-Pacific: The Role of Ideas, Interests, and Domestic Institutions (co-edited). He has also published numerous articles in journals such as the Korean Political Science Review, Comparative Political Studies, The Pacific Review, and Asian Survey. His main research areas are East Asian regionalism, global FTA networks, and the institutional balancing strategies of East Asian countries.

I. Introduction: The Emergence of a Complex Network of Development Cooperation

The global politics of development cooperation in the 21st century is undergoing rapid change. Following the consensus reached at the International Conference on Financing for Development in Monterrey, Mexico, in 2002, on the necessity of expanding development cooperation, the scale of Official Development Assistance (ODA), which had been on a downward trend for the previous decade, began to rise. The G8 Gleneagles Summit in 2005 further solidified this upward trend. This trend has continued, with ODA from Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD DAC) member countries reaching a record high of $128.7 billion in 2010 (OECD 2010). Contrary to general expectations that development cooperation would decrease due to recurring economic crises, subsequent economic downturns, and difficulties in securing domestic political support for aid, the scale of development cooperation has continued to grow, albeit with some fluctuations.

The paradigm shift surrounding development cooperation is significant in that it is occurring in conjunction with the quantitative and qualitative changes in the world order of the 21st century. In terms of ODA volume, traditional major powers such as the United States, the United Kingdom, France, Germany, and Japan occupy the top positions, giving the impression that the world order of development cooperation remains largely unchanged. However, it is noteworthy that major donor countries have simultaneously increased their ODA volumes despite the 2008 global financial crisis. The United States, which provided the material and intellectual foundation for the post-World War II world order, faced a leadership crisis due to the global financial crisis. Nevertheless, the U.S. sought to solidify its position as the world's largest ODA donor by providing $30.2 billion in ODA in 2009, a 3.5 percent increase from the previous year. Excluding the exceptional case of debt relief aid to Iraq in 2005, U.S. ODA saw its largest increase in 2010.

Meanwhile, China's rise and its expanding influence are becoming increasingly visible in development cooperation. China, which emerged as the world's second-largest economy in 2010, is striving to enhance its soft power commensurate with its increased economic strength and is working to secure a significant position in development cooperation (Lum, et al. 2008). In addition to traditional forms of aid, China is providing assistance to developing countries through various means such as concessional loans, debt relief, and investment. If all forms of support to developing countries are included, China can already be considered a major donor. In this context, according to one statistic, China's foreign aid volume reached approximately $31 billion in 2007 (Lum, et al. 2008). Japan, a leading donor in East Asia, is also striving to maintain its status as a key actor in development cooperation by significantly increasing its ODA by 11.8 percent in 2010 compared to the previous year, despite challenging domestic circumstances such as persistent economic stagnation and frequent changes in government. Japan is particularly strengthening its development cooperation with Southeast Asian countries to counter China's expanding influence in East Asia.

European countries, the traditional leaders in development cooperation, are also accelerating their ODA disbursements. Based on the 15 member states of the European Union (EU) belonging to the DAC, they provided $70.2 billion in ODA in 2010, a 6.7 percent increase from the previous year. This amount accounts for approximately 54 percent of the total OECD DAC ODA (OECD 2010). Notably, the average ODA as a percentage of Gross National Income (GNI), or ODA/GNI ratio, for EU countries was 0.46 percent, significantly exceeding the U.S. figure of 0.21 percent, Japan's 0.20 percent, and the DAC average of 0.32 percent. Based on this exemplary performance, EU countries, particularly Nordic countries, are leading the formation of new international norms related to development cooperation.

The reasons why European countries, the traditional leaders in the development cooperation paradigm, the largest donor the United States, Japan, which has emerged as an ODA powerhouse since the 1980s, and China, a representative emerging donor, are actively engaged in development cooperation despite domestic and international difficulties, lie in the complex nature of development cooperation. The complexification of development cooperation in the 21st century is occurring on three levels. First, it is complexifying due to the increase in actors. In terms of traditional actors in development cooperation, in addition to existing major donors like the United States, Japan, and Europe, non-OECD DAC countries such as China and oil-producing Arab states are emerging as major donors. Emerging donors tend to pursue development cooperation paradigms that are very different from those of existing donors. China's adherence to the principle of non-interference, which refrains from intervening in the domestic affairs of recipient countries when providing aid, is a prime example. The emergence of emerging donors and the consequent rise of new development cooperation paradigms are exerting negative pressure on the aid standards and conditions that developed donor countries have established over a long period, thus facing pressure for change in the development cooperation paradigm and architecture (Manning 2006). A more serious problem is that the 'rogue aid' provided by emerging donors to 'rogue states' like Zimbabwe threatens international security (Naim 2007).

It is not only state actors that have increased. Non-state actors participating in development cooperation have increased even more dramatically. As of 2006, the annual aid volume of Non-Governmental Organizations (NGOs) involved in aid was estimated at $14.6 billion, with annual budgets of major NGOs such as Oxfam, CARE, and Save the Children reaching $700-800 million. In addition, the number of international organizations specializing in aid continues to grow. There are approximately 70 aid agencies under the UN, most of which are established for specific purposes, such as the Global Alliance for Vaccines and Immunization (GAVI), the Global Fund to Fight AIDS, Malaria and Tuberculosis, and the Global Environment Facility. The situation in recipient countries is also complex. Democratization has led to an increase in local NGOs, and local governments, local businesses, and financial institutions are participating in aid distribution.

This diversification of actors leads to challenges in coordination and cooperation related to development cooperation. First, the exclusive position of governments as major actors in development cooperation is being challenged, and development cooperation based on partnerships between governmental and non-governmental actors is being emphasized. Furthermore, the emergence of new actors increases coordination costs among actors, leading to higher transaction costs in development cooperation and a greater likelihood of reduced aid effectiveness and consistency. As new methods of development cooperation, conditionalities, and evaluation approaches are introduced, harmonization and readjustment with the existing development cooperation system are necessary. The increase in the number of aid agencies also tends to reduce the scale of individual projects. The increase in the number of actors also places a significant burden on recipient countries. For example, Cambodia receives more than 400 donor delegations annually, and Nicaragua (289 visits) and Bangladesh (250 visits) face similar situations (Severino and Ray 2009). Ultimately, a new development cooperation architecture is needed to enhance the level of solidarity and cooperation among multiple actors (Fozzard et al., 2000; Andersen and Therkildsen 2007).

Second, new phenomena are emerging where development cooperation is not a single issue but is intertwined with other issues in international politics. Complexification is rapidly progressing, with various issues such as aid, development, sustainable growth, and the environment unfolding in an interconnected manner. Particularly since the 2000s, there has been a growing awareness that the world is a globally integrated economy and that global social polarization is fatal to sustainable development. New issues requiring global cooperation, such as diseases, global warming, and food crises, have continuously emerged, all of which are inextricably linked to development cooperation. The fact that large-scale funds are being invested not only in low-income countries but also in 'failed states' is closely related to the recent trend emphasizing sustainable development on a global scale.

Third, management is becoming complex. The complexification of issues has not only made existing problems such as poverty and inequality more complicated but has also necessitated global governance capable of effectively addressing them. This is because interconnected issues can no longer be managed independently but must be addressed together from a broader, more macro perspective. The 2008 global financial crisis served as a catalyst for recognizing that development cooperation issues and the development problems of developing countries are closely linked to sustainable development on a global scale. Following the global financial crisis, the perception began to take hold that the sustainable development of developing countries is essential for the effective management of global governance. As a result, the G20, which emerged as a new alternative for global governance, began to address the issues of development and aid in developing countries as major agenda items. The fact that the G20 began to seek solutions for the development of developing countries, such as agreeing to fulfill capital increase and replenishment commitments to multilateral development banks at the Toronto Summit in June 2010, promoting the launch of the Global Agriculture and Food Security Program (GAFSP) as a measure for agriculture and food security, and urging the implementation of the L'Aquila Initiative, indicates that development cooperation has begun to be managed at the global governance level.

In the 21st century, development cooperation is undergoing a full-scale complexification involving actors, issues, and the combination of hard and soft power. This has two implications. First, 21st-century development cooperation is a question of how to manage interdependence at various levels in a globalized world, as aid provision, developing country development, and the establishment of a new development cooperation architecture are closely interconnected. Specifically, it raises the issue of how to manage collective action arising from the increase in actors and how to harmonize diverse development cooperation models. Second, it can be pointed out that development cooperation itself is emerging as a key pillar for building a sustainable world order in the 21st century. Development cooperation also serves as an effective means for major world powers to enhance their respective hard and soft power. Particularly in a period of such rapid change in the world order of development cooperation, major countries are not only striving to influence the reconstruction of the development cooperation architecture but are also seeking to enhance their voice in the subsequent reconstruction of the world order... (to be continued)