Country_12_SouthKorea_EN

South Korea

Commitment to Development Index 2012

South Korea David Roodman and Julia Clark

The Commitment to Development Index (CDI) ranks 27 of the world’s richest countries based on their dedication to policies that benefit poor nations.

Looking beyond standard comparisons of foreign aid flows, the CDI measures national policies in seven areas that are important to developing countries: aid, trade, investment, migration, environment, security and technology. This report reviews South Korea’s performance on the 2012 CDI. For more details, visit cgdev.org/cdi.

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Overall Score

South Korea’s 2012 CDI Performance n Overall rank 2012: 27 n Overall score 2012: 2.7 n Change since 2008: +0.6 (using 2012 methodology) South Korea ranks 27 overall in 2012. South Korea’s overall score is brought down by a very small foreign aid program, steep barriers to developing country exports, and limited migration from developing countries. South Korea also contributes little to international peacekeeping operations and has high greenhouse gas emissions and fishing subsidies. South Korea’s strongest contributions to development come through its policies to promote investment in poor countries as well as policies that support innovation at home and diffusion of technological advances abroad.

South Korea’s CDI Performance, 2008–12 2008

Aid

2012

Trade Investment

th

Migration Environment Security Technology Overall

-4

www.cgdev.org/cdi

0

4

8

12

South Korea Country Report

Aid

Aid quality is just as important as aid quantity, so the CDI measures gross aid as a share of GDP adjusted for various quality factors: it subtracts debt service, penalizes “tied� aid that makes recipients spend aid only on donor goods and services, rewards aid to poor but relatively well-governed recipients, and penalizes overloading poor governments with many small projects.

n Score: 1.0 n Rank: 24

Rich-country investment in poorer countries can transfer technologies, upgrade management and create jobs. The CDI includes a checklist of policies that support healthy investment in developing countries.

n Score: 5.6 n Rank: 8 Strengths

Weaknesses - Very low net aid volume as a share of the economy (0.11%; rank: 24) - Contributes to project proliferation: small average project size (rank: 27) - Large share of tied or partially tied aid (64%; rank: 23) - Large share of aid to less poor and worse-governed recipients (selectivity rank: 22)

Trade

International trade has been a force for economic development for centuries. The CDI measures trade barriers in rich countries against exports from developing countries.

n Score: -1.3 n Rank: 27 Strengths - Low agricultural subsidies (equivalent to a tariff worth 2.9% of the value of imports; rank: 2)

Weaknesses - High tariffs on non-agricultural commodities (11.2% of the value of imports; rank: 27) - High barriers against corn (389.8% of the value of imports; rank: 27) - High barriers against rice (315.0% of the value of imports; rank: 26)

Center for Global Development

Investment

- Employs tax credit arrangements to prevent double taxation of corporate profits earned abroad - Does not impose restrictions on pension fund investments in emerging markets and provides official support for outflows of portfolio investment

Weaknesses - Political risk insurance agency does not screen projects for social impacts - Does not participate in the Extractive Industries Transparency Initiative (EITI)

Migration

The movement of people from poor to rich countries provides unskilled immigrants with jobs, income, and knowledge. This increases the flow of money sent home by migrants abroad and the transfer of skills when the migrants return.

n Score: 1.3 n Rank: 24 Strengths - Large share of foreign students from developing countries (95%; rank: 2) - Tuition for foreign students the same as for nationals

Weaknesses - Small number of immigrants from developing countries entering South Korea (rank by share of population: 25) - Bears small share of the burden of refugees during humanitarian crises (rank: 27) - Decline during the 1990s in the number of unskilled immigrants from developing countries living in S. Korea (rank by share of population: 24)

South Korea Country Report

www.cgdev.org/cdi

Environment

Rich countries use a disproportionate amount of scarce resources and poor countries are most vulnerable to global warming and ecological deterioration, so the CDI measures the impact of policies on the global climate, fisheries, and biodiversity.

n Score: 4.2 n Rank: 24

Technology

Rich countries contribute to development through the creation and dissemination of new technologies. The CDI captures this by measuring government support for R&D and penalizing strong intellectual property rights regimes that limit the dissemination of new technologies to poor countries.

n Score: 7.0 n Rank: 2

Strengths

Strengths

- High gas taxes ($1.19 per liter; rank: 8)

Weaknesses - High tropical wood imports ($16.17 per person; rank: 25) - High fishing subsidies ($3.40 per person; rank: 24) - High greenhouse gas emissions per capita (14.5 tons of carbon dioxide equivalent; rank: 23) - Poor compliance with reporting requirements under multilateral environmental agreements relating to biodiversity (rank: 22)

Security

Since security is a prerequisite for development, the CDI rewards contributions to internationally sanctioned peacekeeping operations and forcible humanitarian interventions, military protection of global sea lanes, and participation in international security treaties. It also penalizes arms exports to poor and undemocratic governments.

n Score: 1.4 n Rank: 26

- High government expenditure on R&D (rank by share of GDP: 2) - Large tax subsidy rate to businesses for R&D (rank: 7) - Revokes unused patents - Provides patent exceptions for research purposes

Weaknesses - Large share of government R&D expenditure on defense (rank by share of GDP: 25) - Allows patents on software programs - Imposes strict limitations on anti-circumvention technologies that can defeat encryption of copyrighted digital materials

For More Visit cgdev.org/cdi for the complete 2012 edition of the Commitment to Development Index. There, you can explore the numbers with our interactive graphing tool, view additional publications and background papers, and dive deeper into the CDI methodology by downloading our data and code.

Weaknesses - Small financial and personnel contributions to internationally sanctioned peacekeeping and humanitarian interventions over last decade (rank by share of GDP: 27) - Has not ratified the Ottawa Treaty to ban anti-personnel landmines or the Convention on Cluster Munitions (CCM) - Fails to report arms exports to poor and undemocratic governments

Center for Global Development

South Korea Country Report

www.cgdev.org/cdi

Commitment to Development Index 2012 Country Denmark Norway Sweden Luxembourg Austria Netherlands Finland New Zealand United Kingdom Portugal Canada Germany Belgium France Spain Australia Ireland Switzerland United States Italy Greece Hungary Slovakia Czech Republic Poland Japan South Korea

Rank 1 2 3 4 5 6 7 8 9 10 11 11 13 13 15 15 17 18 19 20 21 22 23 24 25 26 27

Aid 11.5 13.0 12.6 13.0 3.1 9.5 6.6 3.3 6.8 3.1 5.0 3.9 6.4 4.2 4.0 4.3 7.5 5.2 3.2 1.3 1.6 0.8 0.8 1.1 0.7 1.6 1.0

Trade 5.3 1.1 5.8 5.3 5.6 5.9 5.8 8.1 5.5 5.6 6.2 5.5 5.5 5.6 5.5 7.4 5.2 1.5 6.7 5.7 5.3 5.4 5.8 5.5 5.6 0.1 -1.3

Investment 4.7 6.1 5.3 4.2 4.8 6.3 5.1 4.3 6.3 5.2 6.1 6.3 5.3 6.1 5.9 6.1 2.9 4.4 5.0 5.4 4.0 3.6 2.9 3.9 4.1 5.2 5.6

Migration 6.2 9.9 7.8 6.8 11.7 5.5 4.4 6.4 4.7 4.0 7.0 6.9 5.0 4.0 5.4 4.2 2.8 8.6 5.2 4.7 6.4 1.7 0.6 1.3 0.6 1.9 1.3

Environment 6.8 3.2 7.3 5.5 6.2 6.7 7.4 6.2 7.2 7.2 2.5 6.9 7.0 6.9 6.4 3.8 6.5 5.8 4.3 6.7 5.9 7.9 8.3 7.2 7.4 4.5 4.2

Security 7.7 7.6 1.2 5.0 6.1 3.2 6.6 7.3 5.4 6.0 5.7 3.7 3.6 3.7 3.4 5.1 6.9 4.4 4.6 5.0 5.7 5.4 5.5 1.6 3.8 4.5 1.4

Technology 6.6 5.7 4.7 4.2 5.7 5.4 5.9 4.8 4.3 7.4 5.5 5.0 4.6 6.6 5.8 5.2 3.9 4.8 4.9 4.2 2.8 3.4 2.6 5.3 2.7 6.1 7.0

Overall Score 7.0 6.6 6.4 6.3 6.2 6.1 6.0 5.8 5.7 5.5 5.4 5.4 5.3 5.3 5.2 5.2 5.1 5.0 4.8 4.7 4.5 4.0 3.8 3.7 3.6 3.4 2.7

Change since 2003 -0.2

+0.7 -0.3

n/a +0.7 -0.1

+0.1 0.0 +0.7 +1.1 +0.3 +0.5 +0.5 +1.0 +0.7 +0.2 0.0 +0.2 +0.8 +0.7 +0.7 n/a n/a n/a n/a +1.3 n/a

The above table lists scores for each of the 27 CDI-ranked countries across seven policy areas. A country’s overall performance is the average of its seven component scores, each of which are scaled so that an average score in 2012 equals 5.0. The final column shows the change in each country’s overall score since the CDI began in 2003 (using 2012 methodology).

About The CDI The Commitment to Development Index has been compiled each year since 2003 by the Center for Global Development (CGD), an independent think tank that works to reduce global poverty and inequality through rigorous research and active engagement with the policy community. CGD senior fellow David Roodman is the chief architect of the CDI, and collaborators have included William R. Cline on trade; Theodore H. Moran on investment; Jeanne Batalova, Kimberly A. Hamilton, and Elizabeth Grieco on migration; Amy Cassara and Daniel Prager on environment; Michael E. O’Hanlon, Adriana Lins de Albuquerque, Mark Stoker and Jason Alderwick on security, and Keith Maskus and Walter Park on technology. The Index is supported by the CDI Consortium.

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