Photo: Korea.net (Flickr)
Before it began producing Samsung Galaxy tablets and Hyundai cars, the Republic of Korea was a recipient of International Development Association funds for the world’s poorest. Today, industrialized Korea is using its wealth to increase its support for less-developed countries through IFC.
During the Spring Meetings in April, Korea donated $1 million to support the IFC-led Group of 20 finance agenda for small and medium enterprises. The agreement between Korea and IFC is yet another important milestone in the growing relationship between its government and the World Bank Group. Korea became an official donor to IFC and has taken a leading role in the G-20 process since the grouping’s summit in Seoul in 2010.
The funding will help support operations of the SME Finance Forum, a G-20 initiative managed by IFC that is designed to improve access to financial resources for small and medium enterprises. It will also be used to support winners of the G-20 SME Finance Challenge, a competition that catalyzes small and medium enterprises financing models and best practices on a sustainable basis.
Korea joined IDA in 1961 and received aid until 1973. By that time, Korea’s economy was growing rapidly. Investment in industries - automobiles, steel, petrochemicals, ships and electronics – powered its economic transformation. In 1996, Korea joined the Organisation for Economic Co-operation and Development, a group of mostly industrialized economies. It also became the first former IDA recipient to join the Development Assistance Committee of the organization.
Today, IFC’s activities related to Korea primarily consist of mobilization of funds from various government agencies and investors and management of IFC’s relationships with Korean banks and companies for South-South partnerships.
Since its first investment in Korea in 1968, IFC has undertaken investments totaling about $1 billion.