1. Kyung Wook, Hur Ambassador of the Permanent Delegation of the Republic of Korea to the OECD 1

2. - Contents - 1 Overview of Korea’s Economic Success 2 Growth Strategies by Period 3 Role of Government in Development Process 4 Korea’s Approach for Development 5 Revisiting “the Korean Path” 6 Sharing Korea’s Development Experiences 2

3. 1 Overview of Korea’s Economic Success 2 Growth Strategies by Period 3 Role of Government in Development Process 4 Korea’s Approach for Development 5 Revisiting “the Korean Path” 6 Sharing Korea’s Development Experiences 3

4. Korea ; A Small or A Big Country Korea ; A Small or A Big Country 102nd in land size 102nd in land size Divided Nation Divided Nation GDP : 1,014billion (‘10) * 15 th in the world Foreign reserves : $317billion(‘12) * 7 th in the world 20-50 club country(‘12) * 7 th country joined the club Trade $1.1trillion(‘11) * 9 th in the world 4

5. Changes within one generation 5

6. 1980 1960 1970 1996 5,00 0 10,00 0 1953 Per Capita Income ($) 1990 1945 1998 2007 15,000 2008 20,000 2011 65 79 12,197 7,355 1,000 21,695 1997-98 Financial Crisis Global Financial Crisis Joining OECD 1948 Foundation of Republic of Korea (1948) 22,489 Receiving Foreign Aid Korean War (1950-53) From LDC to OECD Member From LDC to OECD Member 6

7. Man-made Miracle 7

8. Transition of Industrial Architecture Transition of Industrial Architecture 8

9. Growth of Trade Growth of Trade Annual Export Increase 43.5% (62- 76) 9

10. Inclusive Growth Inclusive Growth 10

11. 1 Overview of Korea’s Economic Success 2 Growth Strategies by Period 3 Role of Government in Development Process 4 Korea’s Approach for Development 5 Rethinking “the Korean Path” 6 Sharing Korea’s Development Experiences 11

12. Development Strategies, 1960s-1990s Development Strategies, 1960s-1990s ; Nat’l R&D Program (‘82) 12

13. Pre-1960s Pre-1960s 13

14. 1960s ; Foundation built for Economic Growth 1960s ; Foundation built for Economic Growth 14

15. Economic Conditions in the early 1960s Economic Conditions in the early 1960s 15

16. 1960s ; Working Mechanism of Outward-looking Development Strategy 1960s ; Working Mechanism of Outward-looking Development Strategy 16

17. 1970s ; Phase of Rapid Growth 1970s ; Phase of Rapid Growth Promotion of HCI Promotion of HCI Rapid growth sustained Rapid growth sustained thanks to export increase thanks to export increase “Saemaul(New Town) “Saemaul(New Town) Movement” Movement” 17

18. 1970s ; Toward Heavy and Chemical Industries 1970s ; Toward Heavy and Chemical Industries 18

19. 1970s ; Support for HCI 1970s ; Support for HCI  Big Push to discover dynamic comparative advantages - Simultaneous, centrally coordinated, massive investment programs, with complementary interventions and reforms (rural development policies) - A race to develop scale of economies with technical prowess before financial burden becomes crushing  Pan-government committee to push “HCI development Drive” - Establish National Investment Fund(1974), which provided 56.8% of all facility investment during (1974-1981) - Policy loans/ Foreign capital - Tax Credit, All-out Drive  Human Resources Development 19

20. 1970s ; Educated Manpower 1970s ; Educated Manpower 20

21. President Park visited Kum-Oh Technical High School (1972) 21

22. Car Parade in Seoul honored Vocational Olympic Medalists (1975) President Park recognizes Medalists in Vocational Olympic at the Blue House (1975) 22

23. 1970s ; Educated Manpower 1970s ; Educated Manpower Enrollment Rate Trends (Above University) 23

24. 1970s ; 1970s ; Broad-based Development Successful rural development model - Most Important national event in Korea during the last 60 years (40.2%/ poll) Broad-based transformation by changing belief system(Can Do Spirit) and building social capital. -“Self-help, Diligence and Cooperation” -“a profound lack of hope—and not just capital, credit, skills, or food—could create and sustain a poverty trap” Merit-based approach on rewarding performances generated through competition and evaluation Green Revolution 24

25. Villagers cooperated and volunteered labor in building roads, bridges, and making composts 25

26. Post 1980s Post 1980s Deregulation, Opening and competition across all sectors Benefits of “3 Lows” Launching of ODA Development of Social Welfare Policy Real Growth : 8.7% Political & social advancement Economic crisis and financial reform Per capita income reaches $10,000 (‘95) Joining OECD (‘96) Stable growth overcoming unfavorable conditions GDP : 1,014billion (‘10) * 15 th in the world Foreign reserves : $317billion(‘12) * 7 th in the world 20-50 club country(‘12) * 7 th country joined the club Trade $1.1 trillion (‘11) * 9 th in the world 26

27. 1 Overview of Korea’s Economic Success 2 Growth Strategies by Period 3 Role of Government in Development Process 4 Korea’s Approach for Development 5 Revisiting “the Korean Path” 6 Sharing Korea’s Development Experiences 27

28. Big Government ? Big Government ? 28

29. Navigator ; Leadership Navigator ; Leadership “Modernization of Motherland” “Industry & Export-based National Development” “Exportization of All Industries” “Heavy and Chemical Export Promotion” Vision Inclusive Growth Anti-Corruption Leading by Example Support of People Close Partnership with Private Sector Monthly Export Promotion Ministerial Meeting (177 times, ‘63-’79) Implementation & Monitoring 29

30. Good Planner ; 5-Year Economic Development Plan Good Planner ; 5-Year Economic Development Plan Nurturing import substituting industry Shifting to export & industry-oriented economy 1 st 5-Year Plan : 1962-1966 Strengthening international competitiveness of light industry Localization of industrial materials 2 nd 5-Year Plan : 1967-1971 Heavy and Chemical Industrialization Plan "Big Push“ for maximization of export 3 rd 5-Year Plan : 1972-1976 Promotion of plant industry Industrial Rationalization 4 차 : 1977-1981 Plant export promotion Enhancing skill level of private companies 5 차 : 1982-1986 30

31. Resource Provider and Distributor Resource Provider and Distributor Productive use of foreign aid (ODA received until ‘80s : $16.4bil) Government’s guarantee for foreign borrowings Strategic investment of the resources for infrastructure, industrial facilities Efficient Utilization of External Resources Tax revenue dramatically increased by 66.5%(‘66), 48.3%(‘67), 50.5%(‘68) National Investment Fund ( 56.8% of all facility investment during 1974-1981) Mobilization of Domestic Resources The real deposit rate remained in low or negative through ‘70s Government directly decided the amount of credit and interest rate for each company based on its past performances - Policy loan in all banks’ portfolio : 40%(‘75) ->50%(‘79) - Export sector/ HCI sector Policy-driven Financing 31

32. Good Supporter Good Supporter Building favorable environment for private sector engagement Focusing resources on infrastructure for electricity, communications and traffic -> Maximizing external economy Establishment of infrastructures 32

33. KIST (Korean Institute of Science & Technology/ 1962) KOTRA(Korea Trade –Investment Promotion Agency/ 1962) - 111 Korea Business Centers in 76 countries KDI(Korea Development Institute/ 1971) Daedeok Science Town (1973) - E stablished by president Park with the opening of the KAIST. - Over 20,000 researchers in 60 major research institutes EXIM Bank (Korea Export and Import Bank/ 1976) - Export loans, Trade finance, Guarantee programs Institution Building 33

34. Human Resources Development Good Supplier Good Supplier 34

35. University Entrance Rate Good Supplier Good Supplier 35

36. 1 Overview of Korea’s Economic Success 2 Growth Strategies by Period 3 Role of Government in Development Process 4 Korea’s Approach for Development 5 Revisiting “the Korean Path” 6 Sharing Korea’s Development Experiences 36

37. Korean Approaches for Development Korean Approaches for Development 37

38. Korean Approach for Development Korean Approach for Development 38

39. Implications Implications Asian Values ? Asian Values ? 39

40. 1 Overview of Korea’s Economic Success 2 Growth Strategies by Period 3 Role of Government in Development Process 4 Korea’s Approach for Development 5 Revisiting “the Korean Path” 6 Sharing Korea’s Development Experiences 40

41. The Role of Government  The Role of Government ☞ Market-friendly vs Development State View Industrial Policy : HCI Development Drive  Industrial Policy : HCI Development Drive ☞ Still effective after catching-up period ☞ Risk of not discovering “dynamic comparative advantage” ☞ Risk of public-private partnership - Implicit government guarantee - Bailout and moral hazard - Financial repression Slippery slope : walk away from the market  Slippery slope : walk away from the market ☞ Risk of de-control without de-protection ☞ Opening up and liberalization increase volatility Revisiting “the Korean Path” Revisiting “the Korean Path” 41

42. 1 Overview of Korea’s Economic Success 2 Growth Strategies by Period 3 Role of Government in Development Process 4 Korea’s Approach for Development 5 Rethinking “the Korean Path” 6 Sharing Korea’s Development Experiences 42

43. Knowledge Sharing Knowledge Sharing ■ Fish vs Know-how to catch fish ■ Importance of Knowledge - “Delivering, expanding, and testing the knowledge is the most important part of our work ” (Zoellick, World Bank President ) - “Sharing Knowledge is the greatest of all callings. There is nothing like that in the land” Why Knowledge? 43

44. Knowledge Sharing Knowledge Sharing Why Knowledge? ■ An Idea whose time has come - ODA amount will suffer : “Value for Money” - Capacity Development / Institution Building / HR ; Knowledge * MDB as “Knowledge Bank” - G20 Seoul Summit, Development Consensus for Shared Growth - OECD Strategy on Development 44

45. Knowledge Sharing Knowledge Sharing ■ Trend Being Humble ; Democratization of Development Economics New Knowledge Source ; South – South Cooperation / Triangular Cooperation Non-DAC Countries Open Platform & Networking Why Knowledge? 45

46. Knowledge Sharing Knowledge Sharing Korea’s Knowledge Sharing  Why Korea? Unique and Successful Development Experience Commitment to Development  Payback to the global community  Becoming DAC member (2010) - One and only “Recipient turn Donor” country  G20 Seoul Development Consensus (2010)  Hosting Busan HLF- 4 46

47. Knowledge Sharing Knowledge Sharing Korea’s Knowledge Sharing ; Essential Part of our ODA  Korean ODA ; Small but most rapidly increasing country Korea’s ODA volume Change - (1987) US$ 20m → (2015) US$ 3,000m * Green ODA - (2015) US$400~700m - (2020) 30% of Total ODA 47

48. Knowledge Sharing Knowledge Sharing KDI, Korea’s Knowledge Agent ■ Knowledge Warehouse on Korea’s Development Experience - Think Tank for Economic & Social Development Policies Since 1971 ■ Executing Agency of Korea’s Knowledge Sharing Program ■ Window of KSP with International Organizations * MOU for Co-work with 5 MDBs + OECD, Mexico(February 2012) and Vietnam(March 2012) 48

49. Knowledge Sharing Knowledge Sharing  KSP ; 3 Major Activities Korea’s Development Experience Co-consultation (with WB & other MDBs) Policy Consultation (100 Major Policy Experience) Bilateral Policy Consultation  Korea & World Bank Co-consulting(2011) - Green Trade Promotion Policy - Public Private Partnership 49

50. Knowledge Sharing Knowledge Sharing  Flow of Modulerization Implication - International comparison - Possibility of application under current environment Implication - International comparison - Possibility of application under current environment Evaluation - Output against goals - Socioeconomic impact Evaluation - Output against goals - Socioeconomic impact Policy Contents - Institution, organization - Functions of organization - History Policy Contents - Institution, organization - Functions of organization - History Why What How-to Evaluation Implication Background of the policy - Domestic and external environment - Policy objectives Background of the policy - Domestic and external environment - Policy objectives Implementati on Methods - Laws & regulations -Financing - Governance for execution Implementati on Methods - Laws & regulations -Financing - Governance for execution 50

51. Knowledge Sharing Knowledge Sharing ■ General Experience vs Special Experience Difference in endowment, culture, history, etc No “one-size-fits-all” policy in development ■ Deliver Failure cases as well as success stories One can learn as much from failure as from success.  The Dos and Don’ts 51

52.  A new comprehensive approach to development across the OECD, endorsed at the Ministerial Council Meeting on 23-24 May 2012 :  to strengthen OECD partnerships and mechanisms for knowledge sharing and policy dialogue with developing countries - responding to the growing importance of developing countries in the global economy as world’s center of economic gravity and key drivers of global economic growth  to apply OECD evidence-based approaches to development by mainstreaming development across OECD sectors OECD Strategy on Development OECD Strategy on Development 52

53.  Policy Coherence for Development(PCD) strengthening OECD Members’ capacities to design policies consistent with development  Knowledge sharing with developing countries Multi-dimensional country review, platforms for regional economic monitoring, etc.  Contributions to international processes and global development architecture 53

54.  Strengthening the existing cooperation and creating new synergies - to complement and link with the work of the WB - to avoid duplication by focusing on areas where the OECD has core competences and adds value  Complementary roles : not technical assistance agency - OECD’s expertise on diagnostics, country and thematic reviews, peer learning methodology, etc.  Establishing regular dialogue channels at strategic and technical levels to identify areas for cooperation such as green growth, infra, etc. OECD Partnership with the WB OECD Partnership with the WB 54

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