UN-DEVELOPMENT: South Korea Leaves Developing World

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Sep 30 1997 (IPS) - South Korea, blessed with one of the world’s most vibrant economies, is formally saying goodbye to the developing world.

Now a nation with an annual per capita income of more than 10,000 dollars, South Korea has dropped out of the Group of 77 (G- 77) – the largest single bloc of developing countries at the United Nations.

“We are not planning to sever all our links with the Group of 77,” Euy Taek Kim, Counsellor at the Korean Mission to the United Nations, told IPS. “We will play a bridging role between the developed and developing countries,” he added.

The only country which has transformed itself from an aid recipient to an aid donor, South Korea joined the Paris-based Organisation for Economic Cooperation and Development (OECD) late last year. At its annual ministerial meeting on Friday the G-77 formally announced that South Korea is now a member of the OECD, described as “the rich man’s club”.

According to the ground rules of the OECD, Kim said, Korea cannot maintain its fullfledged G-77 membership while being a a member of OECD. “But we plan to attend meetings on an adhoc basis,” he said.

The original G-77 members grew to 132 developing nations, fighting to protect its own economic interests. With the departure of Korea, membership dropped to 131 but picked up another member with the admission of Eritrea to the Group last week.

South Korea is only the the second country to leave the Group since it was set up in 1964. Mexico dropped out in 1994 when it joined the North American Free Trade Association (NAFTA) with the United States and Canada in 1994. Mexico’s financial problems less than one year later challenged the decision to abandon the G-77 for the OECD.

A relatively significant contributor to Third World causes, South Korea doled out 30,000 dollars last year to the Office of the Chairman of the Group of 77 in New York, another 50,000 dollars to the South Centre in Geneva and 200,000 dollars to a U.N. Development Programme (UNDP) Trust Fund for South-South Cooperation.

South Korean Foreign Minister Yoo Chong-Ha told the General Assembly Monday that although his country is now a member of the OECD, “we will participate more vigorously in South-South cooperation projects.”

In an effort to expand assistance to least developed countries (LDCs), he said, South Korea has participated in bilateral cooperation projects with the Economic Commission for Africa (ECA) since 1965. He said Korea also plans to undertake a Programme for the Development of Africa for the period 1998 to 2000.

As the world’s 13th largest economy, South Korea has made a quantum leap forward in joining the ranks of the industrial world. Korea’s per capita income has soared from 82 dollars in 1962 to 8,550 dollars in 1995 and more than 10,000 dollars in 1996.

With its rising industrial growth, South Korea is expected to reach its target of 200 billion dollars in exports by the year 2000: up from the current 133 billion dollars.

The U.S. State Department has said that over the past 30 years, South Korea has enjoyed spectacular economic growth. “Despite the need to maintain a large military, South Korea, one of the world’s poorest countries only one generation ago, is now the United States’ eighth largest trading partner and has the 13th largest economy in the world,” it said.

The United Nations has attributed Korea’s economic successes to several factors, including a well-educated and disciplined work force, a high savings and investment rate and a favourable trade environment.

In a report released last week, the Geneva-based U.N. Conference on Trade and Development (UNCTAD) said South Korea “is perhaps the outstanding example of an ’emerging donor’ with the potential for making a significant contribution to official development assistance (ODA), which could supplement the aid resources provided by the traditional donor countries.”

The study said that Korea already provides substantial amounts of non-ODA finance and private investment to other developing countries. Moreover, it has its own development experience of much interest to least developed countries (LDCs) and other developing countries, and lessons to share with them.”

UNCTAD said that Korea itself was a major aid recipient, with foreign assistance contributing significantly to its development. Since its independence from Japan in 1945, Korea has received grants totaling 4.8 billion dollars, mostly in bilateral assistance. From 1953 to 1962, such aid financed 71 percent of total imports and 80 percent of total fixed investment.

During this period, UNCTAD said, South Korea established the basis for its industrialisation later in the 1960s and 1970s. “It is a country that has successfully broken out of aid dependence,” UNCTAD concluded.