By Kunda Dixit
MANILA, Feb 26 1995 (IPS)

Overseas development assistance from traditional donors in Europe, North America and Japan may be declining, but this is being partly compensated by new aid inflows from some of Asia’s newly-industrialised tiger economies.

The level of aid from the new donors — South Korea, Singapore, Hong Kong and Taiwan — are still minuscule, but they represent a new trend in international assistance.

In addition, poorer Asian giants like China and India have been both recipients and donors of foreign aid. Even up-and-coming Thailand is now funding development projects in Indochina and South Asia.

South Korea transformed itself from a war-ravaged land to an industrial giant in 40 years. Its agriculture-based economy is now dominated by transnationals exporting electronic consumer goods and heavy industries.

Its economy is growing at eight percent a year, GNP per capita has crossed the 8,500 dollars mark and South Korea has applied for membership of the Organisation for Economic Development and Cooperation (OECD).

Seoul now says it wants to share the secrets of its success with other developing countries and this month pledged to increase aid flows. In 1994, South Korea spent 180 million dollars in bilateral development aid, mainly in Asian countries — 0.05 percent of its gross national product (GNP).

Under the new plan, South Korean aid levels will reach 0.35 percent of GNP by the year 2000 to rival the average OECD aid ratio.

“The Republic of Korea is increasing its support of economic development efforts in the Third World on the basis of its more than three decades’ experience with successful development,” a government spokesman said in Seoul.

“Korea is increasing its official development assistance to developing countries proportionate to its economic strength.”

But South Korea does not seem to see anything wrong with tied aid — linking aid with trade and sales of its products — which has tarnished the charity of traditional donors.

An official South Korean booklet on its economy states: “Efforts are being made to combine development assistance with private Korean investment, with the aim of maximising its effect, while developing two-way trade and other economic ties on a long- term basis.”

Commentators here say the increase represents a substantial financial outlay, but the government’s decision may be self- serving — to enhance its prospect of joining the OECD rather than genuine humanitarian concern.

Excerpt: