Rapid economic growth in Asia and other developing regions of the world is triggering a sea change in international aid. Countries that were once beneficiaries of assistance are now emerging as donors themselves, while traditional donors are reassessing their objectives and modalities in order to stay relevant. Nowhere is this more evident than in India.

Per capita income in India has more than doubled in the past decade with an estimated 267 million people, or 22 percent of the population, now considered middle class. Photo by Karl Grobl.

India is widely viewed as an economic success story, which is certainly true on one level. Growth for the current year is projected around 7 percent, and was averaging 9 percent before the last global economic downturn. Per capita income has more than doubled in the past decade with an estimated 267 million people, or 22 percent of the population, now considered middle class. At the same time, approximately 450 million people, or almost 40 percent of the population, still live below the poverty line. The juxtaposition of India as a rising Asian power, yet also a country with significant development challenges, is reflected in its aid policies.

Although India has long been wary of foreign aid, it has had many international benefactors over the years, including large rival programs of the Soviet Union and United States during the Cold War. The Soviet Union invested in state-run steel and power plants, while the United States favored softer assistance for agriculture, health, and education. In 2003, in an effort to streamline aid, but also to signal its growing international prominence, India asked all but five countries – Germany, Japan, Russia, the United Kingdom, and the United States – to discontinue their aid programs. Among the political imperatives was a desire to bolster India’s campaign for a permanent seat on the U.N. Security Council.

Currently, India’s economic success, on the one hand, and budget pressures within donor countries, on the other, is threatening the longevity of the remaining aid programs. Critics ask why a country with a burgeoning middle class, space program, and gross national income of $4.16 trillion annually should receive foreign aid. Britain is India’s largest bilateral donor, with an annual program of GBP 280 million (over $445 million). In 2010, Indian Finance Minister Pranab Mukherjee famously described this as a “peanut” in the country’s total development spending, sparking an international row. While both governments have since reiterated their commitment to the program, the UK’s Department for International Development (DFID) has refocused its strategy to adjust to India’s evolving circumstances. Its current five-year plan targets India’s poorest states, with special attention to women, girls, and the role of the private sector in reducing poverty. DFID is supporting new forms of financing, such as vouchers and incentive schemes, and is looking at ways that Indian experience and expertise can be used globally on issues ranging from climate change to disease control.

With a budget of approximately $100 million in fiscal year 2012 that is expected to decline in future years, the U.S. government’s aid program in India is far smaller than Britain’s. The U.S. Agency for International Development (USAID), which administers the program, is aggressively seeking to reinvent itself in India, seeking a “smooth pivot” that responds to the new environment. Like DFID, one of USAID’s goals is “to partner with Indian public and private sectors to identify innovations and best practices that have a significant impact in India and globally.” USAID and the Federation of Indian Chambers of Commerce and Industry (FICCI) have each contributed $7.5 million to the Millennium Alliance, which is investing in innovations from civil society, academia, and the private sector. They plan to work together to raise $50 million more in the coming year. USAID is also planning “triangular” cooperation with the Indian government on programs in Kenya, Liberia, and Malawi, and the establishment of centers of excellence for international training within India.

India’s own aid program (which the government prefers to call “development cooperation” in the spirit of south-south partnership) has been in existence since the 1950s when it began offering assistance to Nepal. The program expanded during the 1960s to include its flagship Technical and Economic Co-operation (ITEC) scheme, which provides training in Indian institutions for nationals of 158 countries, deputes Indian experts abroad, and funds projects, study tours, equipment donations, and disaster relief. Indian development cooperation currently exceeds $2 billion annually, about half of which goes to Afghanistan. In an effort to better coordinate its efforts, and as a precursor to the establishment of a full-blown development cooperation agency, the government has recently moved to create a Development Partnership Administration within the Ministry of External Affairs to liaison with the multiple ministries and divisions involved.

The challenges that India faces in managing its growing development cooperation program are shared with the governments of other emerging economies such as Brazil, China, and South Africa. On March 5-7, over 30 development experts representing more than 10 countries will convene in Delhi for the fifth round of the Asian Approaches to Development Cooperation Dialogue series. Countries represented include a range of both emerging and traditional donors, as well as recipient countries, from inside and outside the Asian region. The dialogue series is supported by the Korea Development Institute and The Asia Foundation, with the Delhi meeting hosted by the Research and Information System for Developing Countries (RIS), a think tank affiliated with the Government of India’s Ministry of External Affairs. Participants will discuss approaches to pro-poor growth, lessons from Asian countries’ experiences as both beneficiaries and donors, and how those compare with the approaches of traditional donors belonging to the Development Assistance Committee (DAC) of the Organization for Economic Co-operation and Development (OECD). The goal of the ongoing dialogue is to broaden sharing and perspectives among both emerging and traditional donors, assisting them to navigate the complex and rapidly changing terrain of development cooperation.

Nick Langton is The Asia Foundation’s country representative in India. He can be reached at nlangton@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

Weeks into his new post,

You have lived and worked extensively in South Korea, and you’re an expert on issues related to the region, particularly North Korea. How did you first become interested in Korea?

When I was a college student, my mother worked for United Airlines and I was lucky enough to spend my summers traveling. In the spring of 1987, I visited Seoul on the very eve of Korea’s democratization. Right outside my humble inn I could see students fighting for the freedoms I had been born with. This made a lasting impression on me. I also became fascinated by Korea’s rapid economic development. How did one of the poorest countries in the world develop so quickly?  For me, a dynamic country with friendly people was an unbeatable combination. So, when I got back to college, I immediately started studying Korean and changed my major to Asian Studies.

What do you see as the most critical issues facing the Korean peninsula now?

South Koreans are watching the transition in North Korea closely. The vast majority hope the transition will be smooth and stable. Almost no one here wants a sudden collapse of the North Korean regime.

Domestic politics is also in a state of flux. There is going to be a presidential election here in December and, true to the nature of democracy, it’s too hard to tell who is even in the lead right now. Meanwhile, voting irregularities in the Seoul mayoral election and a still unfolding bribery scandal are rocking the ruling Grand National Party.

In terms of Korean society, the issue that is getting the most attention right now is the education system and in particular the problem with bullying and suicides among students. There is growing public awareness that even though Korean students are some of the best test-takers in the world, more attention needs to be paid to developing students’ social skills and civic values.

On the economic front, Koreans are very anxious about the world economy. Korea is heavily dependent on trade. If Europe goes back into recession and China slows down, that could have a serious impact on the Korean economy.

I’ve heard that Seoul’s mayor, Park Won-soon, who was just elected a few months ago, is one of the most important figures in Korea.

That’s true. Since almost half of all Koreans live in or around Seoul, the mayor of Seoul is one of the most influential positions in the country. People are paying close attention to how the new mayor performs and how that could impact the upcoming presidential election. In some ways, the election of the mayor and National Assembly elections to be held in April act like America’s primaries in that that they will shape the presidential election.

Can you talk about South Korea’s role as a donor (and host of the recent High Level Forum on Aid Effectiveness (HLF4) in Busan), and how its history as the first country to have transformed itself from an aid recipient to donor may provide lessons for other countries and their leaders?

Korea’s economic transformation is nothing short of remarkable. That a country that was among the poorest in the world 50 years ago could be a major aid donor today is really quite amazing. Korea’s overseas development assistance (ODA) agency was only created 20 years ago. And, President Lee Myung-bak has promised to double South Korea’s per capita GDP spending on ODA by 2015. He faced considerable opposition within his own government for making this such a high priority. The HLF4 in Busan was really a coming out party not just for South Korea but for other emerging aid donors and civil society. This was the first time that the High Level Forum had a significant role for non-governmental organizations. Korea doesn’t have much of a philanthropy culture – so this is a very new phenomenon.

Yet surveys show that the Korean public is aware of the critical role that aid played in their own success, and widely supports Korea’s role in assisting the development of other countries in Asia. What do think of this?

Koreans over the age of 50 can still remember receiving assistance from the United States, so that has made a big impact on the public’s psyche. Korea has developed the Korea Overseas Volunteer Corps, Korea’s own vibrant version of the Peace Corps. It has already grown to be the third largest overseas volunteer group in the world. A dozen graduate schools in Korea now offer degrees in English in international relations and development studies, so I think it is fair to say that Koreans are becoming even more aware of the importance of helping developing countries follow in Korea’s path.

Sometimes on the streets of Seoul, older Koreans will stop me and say, “Thank you for the cornbread that your government [the U.S.] provided when I was a student.” There’s also a growing recognition that it’s in Korea’s national interest to promote the prosperity of the region and the world – as countries develop, they become better trade partners.

What are your thoughts so far on North Korean leadership of Kim Jong-un?

Well, pessimists argue that Kim Jong-un is too young, the transition happened too suddenly, and the North doesn’t have experience with collective leadership. Thus, succession is unlikely to proceed smoothly or go well. While I’m reluctant to call myself an optimist, I’ve said from the start that I expected the transition to go smoothly. It is true that we don’t even know how old Kim Jong-un is; only that he is in his late 20s. He is quite young, and an untested leader. It will take time before he is able to demonstrate his leadership skills and win the allegiance of the key generals around him. But the elder Kim chose his brother-in-law and his most trusted general to serve as protectors for his young son. I think this was an insurance policy so that if he did die suddenly, there would be a succession plan in place.

North Korea’s per capita income is less than 5 percent of the South’s. What kind of issues does this raise on the Korean Peninsula and what can be done to improve this situation?

It is quite amazing that South Korea grows by the size of the North’s entire economy each year. What that means is that the gap between North and South Korea is only growing. In fact, North Korea’s population is actually growing faster than South Korea’s and that also adds to the burden. So, while I don’t think reunification is just around the corner, given that it will be a decades-long task that will cost trillions of dollars, I think it’s wise for South Korea to begin planning for reunification now by preparing the funds that will be needed once the process begins.

Some Korea-watchers criticize South Korea’s National Security Law, saying it restricts freedom of expression for a democratic nation. What are people saying in Seoul about this?  

There’s no question that the National Security Law is an infringement on freedom of expression in South Korea. But, it’s really not unlike laws that were passed in the United States after 9/11. A strong majority of the Korean public supports the National Security Law in some form. The question is, how restrictive should the law be? For example, as the law stands it is illegal to access websites that are pro-North Korea. It’s very difficult for me to read the North Korean media because most web sites are blocked. Despite that, most South Koreans recognize the need for some restrictions because the threat from North Korea is unfortunately still very real.

Peter Beck is The Asia Foundation’s country representative in Korea. He can be reached at pbeck@asiafound.org. The views and opinions expressed here are those of the individual and not those of The Asia Foundation.

In the 60 years since The Asia Foundation began, the global development landscape and accompanying aid architecture has changed dramatically. Tackling the challenge of global poverty reduction seems to be on track. In the early 1980s, more than half of people in developing countries lived in extreme poverty. Today, this figure is around 16 percent and falling. Asia is largely responsible for these dramatic figures. Asia has experienced one of the most rapid paces of development in human history and, hence, it is no wonder that political and economic pundits have dubbed this era “The Asian Century.”

Many countries in Asia also share the unique experience of being aid recipients and donors, often simultaneously. Asian countries as donors are now contributing to significant shifts in global aid architecture.

Alongside this success, however, the Asian Century faces looming challenges. These include climate change, the global financial crisis, food security, humanitarian crises resulting from devastating natural disasters, and persistent pockets of conflict and fragility. For many countries in Asia, the challenge is how to maintain a positive development trajectory, while tackling these challenges and avoiding the middle-income trap. It is fitting that the Fourth High Level Forum on Aid Effectiveness (HLF4) is being held in Asia. As host, South Korea provides a valuable, concrete example of how aid can be an effective catalyst of development.

Many countries in Asia also share the unique experience of being aid recipients and donors, often simultaneously. Asian countries as “donors” are now contributing to significant shifts in global aid architecture. Two decades ago, aid from the Organisation for Economic Cooperation and Development‘s (OECD) Development Assistance Committee (DAC) member countries constituted 80 percent of total aid. Today this amount is closer to 50 percent. Contributing to this change in composition of global development assistance is the significant increase in assistance from non-DAC countries, notably China and India.

Although often characterized as new or emerging donors, many of these countries in fact have a long history of development cooperation that has simply fallen under the radar of traditional aid frameworks for many years. Beyond resources, these emerging actors bring distinctive philosophies, expertise, partners, and modalities to their cooperation. Many operate outside of the DAC. At the same time, there has not been an effective mechanism that reflects this diversity that brings together the different interests and perspectives of the current broad range of development actors. To address this gap, for the past year, The Asia Foundation has been collaborating with The Korea Development Institute (KDI) to convene a series of policy dialogues on Asian approaches to development cooperation. This dialogue, involving development cooperation officials, policy analysts, and partners from China, India, Korea, Malaysia, Singapore, and Thailand has revealed some intriguing similarities – as well as some important differences – among these countries with regard to the philosophy, purpose, and modalities of development assistance. They have also provided insights on the relevance of current international aid frameworks for Asian approaches, and whether donor alignment around an agreed set of principles and approaches is desirable or possible.

To continue this dialogue, this week in Busan we brought together experts from China, India, Vietnam, and Korea to discuss emerging Asian approaches to development cooperation and to share mutual experiences as both aid recipients and aid donors. The event – “Emerging Asian Approaches to Development Cooperation” – was hosted by The Asia Foundation, KDI, and Vietnam’s Ministry of Planning and Investment.

In addition to the rise of important new government actors, the phenomenal growth in private philanthropy and non-government development assistance has also transformed the basic architecture of the international aid system. It is estimated that private philanthropic aid (which includes contributions to NGOs and broader civil society organizations) from developed countries ranges from $65-75 billion annually. Indeed, some INGOS are larger than some DAC donors. In 2008, private philanthropy constituted 32 percent of total aid composition. Non-state development cooperation partners bring enormous intellectual capital, financial flows, technical capacity, and decades of experience to development work. They also provide valuable access to local networks, leaders, and communities.

INGOs and CSO efforts complement traditional ODA – which tends to focus on national-level plans and building state capacity – by offering innovative, locally grounded, and responsive programs, including extensive work with local civil society organizations. When brought together these two approaches provide a more robust definition of country ownership to the dialogue on development effectiveness.

This exciting new aid ecosystem, however, poses incredible challenges for coordination, management, and measurement of effectiveness. Diverse approaches have led to increased fragmentation in aid and a proliferation of aid instruments. As the volume of aid and number of donors has increased, so has the number of projects. Moreover, projects are becoming smaller. More than half of all donors projects amount to less than $100,000. The diversity in development actors has led to new coordination forums and expanding mandates for existing ones. These include MDG Summits, OECD/DAC, G20, UNDCF, among others. While many of these forums have overlapping mandates and membership, this diversity of organizational structures is perhaps a natural outgrowth and reflection of the dynamism and innovation now taking place in international development conventions.

Ultimately, the greatest prospects for effectiveness and coordination will come from the developing countries themselves. The diversity and complexity of aid, while straining national aid management systems, has also expanded opportunities and choice for developing countries. More resources, commitment, and trust are necessary to enable countries to set their own development agendas and manage development resources accordingly. In this regard, much can be learned from the experience of Asian countries, especially Korea.

HLF4 advocates for a new paradigm for development cooperation and one that is inclusive of increasingly influential countries outside the DAC. Moving forward, Busan’s global compact has all the ingredients to establish new milestones in aid and development effectiveness.

David D. Arnold is The Asia Foundation’s president and Anthea Mulakala is the Foundation’s country representative in Malaysia and regional advisor for donor relations. They can be reached at president@asiafound.org and amulakala@asiafound.org, respectively. The views and opinions expressed here are those of the individual authors and not those of The Asia Foundation. 

It is entirely appropriate that the Fourth High Level Forum on Aid Effectiveness is being held in the city of Busan, South Korea. In many ways, Busan symbolizes the story of Korea’s transition from poverty and aid dependence to aid donor and host of the most important global meeting on development cooperation. Forum participants from around the world are marveling at the glass and steel towers and the busy port. But go back a few decades and the picture was very different.

Thousands of delegates descended on Korea's major port town, Busan, this week for the HLF4. Photo: Flickr user: LWY

During the Korean War (1950-53), Busan was the only major port that did not quickly fall into North Korean hands. Through that port, war material and humanitarian supplies flowed into the devastated country. For many soldiers, aid workers, and journalists, Busan (then spelled Pusan) was their first view of this largely unknown country, and the first impression was almost universally negative. The surrounding hillsides were covered with the shanties of millions of refugees who flowed into the enclave. Nevertheless, with massive external assistance, Korea went on to recover its lost territory and begin the arduous task of rebuilding.

During the 1950s and 60s, the international community, especially the United States, stepped in to support Korea’s reconstruction and development with direct budget support and technical assistance. Then, aid flowed through the port of Busan in the form of the “three whites” (sugar, flour, cotton) that met the immediate needs of the people and helped re-start the economy.

When Korea’s development drive got underway in earnest, under the five-year plans of President Park Chung Hee, the flow of materials reversed, and Busan became one of the main portals through which Korea’s exports were sent out to markets around the world. This was the start of the “miracle” of rapid economic transition that eventually made Korea an advanced industrial state. In the process, Busan, like the capital Seoul, was transformed into a modern metropolis that would not be recognized by Korean War veterans from abroad or even by those, like myself, who first visited the city in 1970.

Government officials and civil society representatives from around the world frequently visit Korea to try to tease out the lessons that might be applicable in their own countries. Just a few weeks ago, The Asia Foundation hosted a delegation from Timor-Leste that wanted to know how Korea built strong institutions for planning and, by effectively guiding the use of foreign aid, how it kept, in the language of the High Level Forum, “ownership” of the development process. But more than the details of history, it seems that what the Timorese and others take away from Korea is inspiration:  to aim high, to demand results, and not to be satisfied simply with more aid.

Korea deserves recognition both for its successful economic development, but also for its strong commitment to assisting other countries that seek to follow in its path. In today’s world of recession and austerity, Korea stands out for steadily increasing its aid and for its commitment to doubling its development assistance by 2015. Also unusual is the level of public support by Koreans, across the political spectrum, for Korea to play a major role in assisting the development of other countries in Asia and beyond. Surveys show that the Korean public is aware of the critical role that aid played in their own success and they expect the country to assume responsibilities commensurate with its new status.

So, as delegates from around the world assemble in Busan this week to discuss how development cooperation can better contribute to development results, they should take time to appreciate the symbolism of the setting where they are meeting, and the successful lessons that Busan, and Korea as a whole, can teach us about overcoming great adversity and obstacles to achieve a better life for all.

Edward Reed is The Asia Foundation’s country representative in Korea. He can be reached at ereed@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

In a recent speech at the Overseas Development Institute, former UK Prime Minister Tony Blair stressed the important role that leadership plays in development.

Now, as the Forum draws to an end, the importance of leadership proves a crucial and timely message, and one that is closely tied into the growing debate about development “ownership”; for it is important to remember that ownership requires “owners.” Such owners, however, cannot be confined to the top leadership of central government, as ownership also requires action and support from leaders at the sub-national level, as well as across all sectors, including the private sector and wider interests in civil society. The new challenge for development that has been addressed in Busan – and will, hopefully, continue to be addressed beyond it – is how the international community can help to facilitate or broker processes through which these leaderships can work better together to share ownership of locally appropriate and legitimate institutions and policies.

But, while policy-makers recognize that leadership matters, they are also prone to ask the questions: “So what?” and “What can we do about it?” In light of such unanswered questions, the Developmental Leadership Program (DLP), an international policy initiative directed by an independent steering committee of partner organizations, including The Asia Foundation, funded primarily by AusAID,  works to better understand and promote the role developmental leadership plays in fostering sustainable economic growth, political stability, and inclusive social development.

However the focus on individual leaders tends to suggest that they, on their own, can directly transform a country’s economic and political well-being. But that may well be too large a claim. At DLP we recognize that leadership in development is an unavoidably political process, not simply a function of individual attributes or the work of history’s so-called “great men” or “great women.” In fact, developmental leadership has always involved forging a variety of coalitions – formal and informal, vertical and horizontal – both among individuals and organizations within the state apparatus and between them and a wide range of economic, social, and political interests within and beyond the national level. Moreover, leadership is not confined to the national, governmental, or the (narrowly understood) political domain. Rather, it is critical at sub-national levels of government, in all sectors such as health, education and agriculture, as well as in business associations, trades unions and the professions, to name a few.

In these areas of interest there is a deep synergy between the DLP and The Asia Foundation, and joint work is taking place. For example, in conjunction with the DLP, The Asia Foundation is running a series of workshops for AusAID officials and others about how to think and work in a politically informed way. And a joint Asia Foundation/DLP project is currently under way in the Philippines where a team of researchers is working to better understand the dynamics of social sector reform processes in that country and, in particular, the role of local developmental leaders and reform coalitions.

Already, DLP’s research findings have helped shed light on when, why, and how such developmental leaderships emerge. Our evidence indicates that, in fact, critical events, such as sudden threats, challenges, crises or opportunities, often trigger windows of opportunity for developmental leaderships and coalitions to form in order to work collectively to resolve issues, which they would not be able to resolve on their own.

Learning how to support the emergence and activities of developmental leaderships and coalitions thus represents an urgent challenge for the international community, but has not been especially high on the agenda at Busan. It will need to be recognized that brokering and facilitating such coalitions – in all sectors and at all levels – can contribute significantly to the processes of development to enable local leaderships to really take ownership of developmental policy and practice. As ODI’s David Booth blogged recently, this is tricky territory and may require some difficult changes on the part of donors. Our work is beginning to produce some insights that we hope can inform the international community about how to support countries in finding solutions to these long-term development challenges and issues.

Adrian Leftwich is DLP’s director of research and an Honorary Fellow in the Department of Politics, University of York. He can be reached at Adrian.leftwich@york.ac.uk. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

As thousands of development experts and leaders gathered this week in Busan, Korea, for the Fourth High-Level Forum on Aid Effectiveness, The Asia Foundation has just published a book featuring case studies from the Philippines that focus on many of the most critical development challenges being raised in Busan.

The book, Built on Dreams, Grounded in Reality: Economic Policy Reform in the Philippines, examines both successful and unsuccessful reforms in order to draw lessons from those experiences. The five highly regarded reforms include: introducing competition and liberalization in three sectors (sea transport, civil aviation, telecommunications); privatizing water service in Metro Manila; and passing a property rights law to allow faster titling of residential lands. The book also documents two long-running reform efforts with limited success: improving tax administration for better fiscal outcomes, and reforming the National Food Authority, a government corporation responsible for ensuring food security, particularly the stability of supply and price of rice.

A number of regularities that can inform development thinking and practice emerged from the cases:

1. Institutional change is an iterative, non-linear, and context-specific process. Successful reform involves the embedding of technically sound policies within the murky and ever-shifting world of politics and coalitions. While the process is protracted and unpredictable, it can be influenced to produce positive development outcomes. The case of civil aviation provides an excellent example of this iterative process. In the initial years of the Arroyo administration (2001-2004), liberalization advocates were appointed onto the national policy body, the Civil Aeronautics Board. However, the elections of 2004 changed the policy environment when the owner of the dominant carrier is alleged to have supported the president’s election bid. In an effort to continue reform, advocates shifted strategies by combining the “open skies policy” with a political base from the president’s home province of Pampanga where there was a major airport, Clark Airport, a former U.S. military facility. Over time, an aggressive liberalization policy emerged that unleashed the development of the airport. From a low of 50,000 passengers in 2004, the airport handled about 700,000 passengers in 2010.
2. Technical and political dimensions play equally important roles for achieving reform.There is a universe of reforms, some of which are technically sound, and others politically possible. Each reform case sought the elusive option that is both technically sound and politically possible at specific moments in time, and at critical junctures amid the seeming chaos. Discerning this elusive combination is an iterative process that combines three reform elements: technical analysis, political economy analysis, and political action. An example is the introduction of the Roll-on, Roll-off(RO-RO) policy in 2003.Initial analysis pointed to the need for the regulator to undertake a “cost-based study” to determine cargo handling rates. While technically sound, it did not take into consideration the political economy dimensions. The regulatory agency actually shared part of the revenue from cargo handling rates and therefore had an incentive to annually raise rates. To counter this, reform advocates developed a broad coalition of users and transformed the issue into a national concern to be resolved by the president. In 2003, President Arroyo issued the RO-RO policy. In hindsight, it is evident that the 2004 elections played a major role in the policy reform. As a result of the policy, domestic shipping costs have been reduced by 20 percent to 60 percent on key routes. One major multinational reduced its warehouse network from 36 to 3 over a 10-year period because the trucks can hop from island to island and have been transformed into “rolling warehouses” due to RO-RO.
3. Political action is a critical ingredient for institutional change.Political action includes negotiating the complex socioeconomic and political terrain of reform, supporting coalitions, and aligning various interests toward the achievement of the developmental outcome. The goal of political action is to convince those with political capital to spend it on technically sound, politically possible solutions.The case detailing the introduction of a new property rights law, the Residential Free Patent Act, highlights the centrality of political action. In the Philippines, there are about 24 million parcels of land, of which close to half (46 percent) are untitled. Of the untitled, about 7.8 million parcels are residential. Occupiers often hold only tax declaration certificates, which cannot serve as collateral for bank loans.The case study recounts the beginnings of the effort to unleash this capital, the people who bought into the idea, and various dead ends that were encountered. This involved crafting an alternative, more politically feasible – if less ambitious – reform objective which diminished the ranks of the opposition and produced an alignment favorable to change. The narrative emphasizes the importance of political mapping of potential friends and foes, coalition building among those of kindred interests, the use of networks built in the past for other purposes, cashing in reciprocal obligations for past favors, the deployment of teams of experts with detailed knowledge of the inner workings of the land titling and legislative processes, and the role of determined individuals who kept the fire burning in lean times.The law creating an administrative procedure for the titling of residential lands was signed in March 2010. In turn, the development outcomes are emerging. Already in the first three quarters of 2011, the government has issued 20,000 titles. This has already matched the number of titles issued in the previous four years.
4. Committed local leadership is the principal driver of reform. In all cases, there are individuals, whom we refer to as development entrepreneurs, who took responsibility for the reform challenge and for seeing to the achievement of the outcome. The privatization of the government-run Metro Manila water concession provides an example of local leadership. President Ramos, apprised of the possibility of private provision by foreign players interested in acquiring and running the water service in Metro Manila, became its chief advocate. President Ramos got the Legislature to pass a law, the Water Crisis Act, which allowed difficult decisions to be made. The help of the International Finance Corporation (IFC) in the preparation of the bid papers and the concession contract was critical. Aggressive reduction of the manpower complement by 30 percent, and a substantial increase in the water tariff signaled credible commitment by the government. The appointment of a very credible administrator with a mandate to privatize the agency reinforced the signals. As a result, the private sector bidders flocked to bid aggressively, resulting in a spectacular discount and dramatically improved service for consumers.
5. Development agencies play a critical but supporting role in achieving reform. Some of the successful cases point to a promising project structure that allows development agencies to increase aid effectiveness and manage institutional risks. In that structure, development agencies work with intermediary organizations and local partners through flexible, outcome-oriented grants.

Instead of a long and rigid work plan, the grant project structure allowed local partners to identify, develop and implement strategies and activities with broad goals identified. As such the realities of context, politics, and incentives can be incorporated. The project structure has led to significant policy and development outcomes such as the liberalization of civil aviation in Clark and the introduction of the residential land titling program. Equally important, the project provided supported to legitimate local civil society partners who independently determined the reform agenda.

The Busan discussions are helping to bring much-needed attention to these new approaches to development. We hope that some of the lessons from successful reform in the Philippines can shape this global conversation.

Jaime Faustino manages the Economic Reform and Development Program in the Philippines. He can be reached at jfaustino@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

This story is one that I have shared many times before. Years ago, I found myself walking through a stunning village in Bazarak, Panjshir Valley – home of the late Ahmad Shah Massoud – over 50 miles from Afghanistan’s capital, Kabul. I was there to help monitor preparations for the 2004 presidential elections. Just after 10 a.m., when we (I had three other colleagues with me: a driver, guide, and interpreter) arrived, I was brought to the village head’s house. The site was unforgettable: a cozy traditional house, basic setting, no electricity but a generous supply of natural fresh water, possibly from melted ice flowing down from the Hindu Kush Mountain range. As soon as I walked into the house, I was introduced in Pashtu: “Herizal Hazri, election worker from Malaysia.” A stocky man (the village head) immediately shook my hand, and said through our interpreter, “Malaysia is good. … Mahathir is our leader!” (Yes, I did think of testing his conviction but again, as a foreigner, I knew better than starting a debate, especially with a village head!)

I was surprised; but not because he adored Malaysia and its former prime minister so much, but rather that this short exchange of words was happening here, in a remote village in the Pansjhir Valley, with no electricity, no internet, and largely buffered from the outside world due to war, or more precisely: many wars. I thought to myself, if only I had travelled here to measure the effectiveness of Malaysia’s foreign policy, my ratings will be largely boosted by this conversation.

Seven years later, this moment stuck with me as I sat down to co-write a chapter on Malaysia’s foreign policy and South-South Cooperation for the new book, Emerging Asian Approaches to Development Cooperation, jointly produced by the Korean Development Institute and The Asia Foundation which was just released at the Fourth High Level Forum in Busan.

It is not too much to claim that South-South Cooperation is an important tenet in Malaysia’s foreign policy. Since its independence in 1957, Malaysia’s involvement in promoting greater cooperation and solidarity among newly independent countries of Asia and Africa has been a prominent feature of its modern political history. While Malaysia did not participate in the inaugural Bandung Afro-Asian Conference in 1955, it quickly played an integral role in the formalized South movements such as its active membership in the Non-Aligned Movement (NAM), Association of Southeast Asia Nations (ASEAN), and the G77 caucus within the United Nations.

Malaysia’s commitment in championing the cause of the developing South became even more prominent by the early 1980s when ASEAN, the Organization of Islamic Conference (OIC), NAM and the Commonwealth took center stage in the nation’s foreign policy. The Mahathir Administration (1981-2003) had consistently championed the South’s cause and Mahathir charged internationally as one of the leading advocates for the developing world. He was the voice of conscience of the plight of the developing countries. Since then, over the last three decades, Malaysia’s rise as an active player in promoting self reliance of the developing countries through cultivating partnership among them, as well as consistently and at times vocally expressing the South’s agenda internationally.

Malaysia’s major initiative for South-South Cooperation was made prominent through the establishment of the Malaysian Technical Cooperation Program (MTCP). MTCP is synonymous with Mahathir even though the program was officially launched before his appointment as prime minister. He had the vision of the importance for the South to be economically and politically strong and independent, thus not having to be overly dependent on the West. Under Mahathir, Malaysia’s foreign policy has changed from one that was decidedly pro-Western and anti-Communist to one that is openly identified with Third World concerns and aspirations. It was during Mahathir’s premiership that Malaysia sought to play a more prominent role in international affairs, especially at the United Nations, in the Commonwealth as well as among the developing countries in the context of South-South cooperation.

Since its inception, more than 2,000 participants from 136 countries have participated in the various programs administered under the MTCP annually. Today, the program continues to draw interest and participation from a multitude of countries, ranging from the African continent, Europe, Latin America, and Oceania. Many of the participants have return to their home countries and contributed to their own path of development. It is not surprising for one to meet a senior academic or civil servant in South Korea who will share wonderful experiences of being trained in Malaysia many years ago under the MTCP.

Mahathir’s successors, namely Abdullah Badawi and (current) Najib Razak, have both maintained Malaysia’s commitment to the developing South. In October 2009, Prime Minister Najib launched a UNESCO-Malaysia trust fund to enhance South-South Cooperation. This new initiative was focused to capacity building in education and science for the benefit of the Least Developed Countries, Small Island States and in support of the Priority Africa agenda.

Malaysia’s assistance program was initiated with a small but noble goal of extending a hand in friendship – through training assistance and capacity building. This imperative continues to drive the MTCP and other Malaysian government’s initiatives for South-South Cooperation. Malaysia has learned a great deal through the course of furnishing assistance to more than 140 countries. Today, as Malaysia is gearing toward becoming a fully developed nation status herself, its foreign assistance framework is facing a new challenge: finding a new framework where Malaysia can provide deeper and sustainable partnerships for international development. This is even more challenging at times when the global economic system is showing much fatigue.

Whatever the future may be for Malaysia’s foreign assistance program, the nation has proven its commitment to international development. From the busy metropolis of Seoul to the serene valleys of Pansjhir, Malaysia is known and remembered for its commitment to the developing world.

Herizal Hazri is The Asia Foundation’s program director in Malaysia. He can be reached at hhazri@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

When times are tough, it’s difficult to settle into a charitable mood. At the mention of global aid, people grumble that we can’t even afford to care for our needy at home. But as with individual lives, a nation needs to look beyond immediate concerns in forging a path for the future. The tougher times are, the bolder and more resolute we must be in upholding our responsibilities. Having ascended to donor country status, we cannot sidestep or neglect our role of offering aid to countries that lag behind in economic progress.

We live in a borderless global community interlinked by networks created by globalization, not to mention our connectivity in terms of computers and communication. No countries can survive cut off from these global fetters. A country’s problems and challenges are no longer restricted to its own borders. They become global problems and concerns that require regional or international solutions.

War and peace, struggles for democratization, sustainable economic development, and environmental challenges are common endeavors members of the entire world community in the 21st century must address together for the viability of the planet, regardless of where they live. We learned from our own experience a century ago that self-exile and estrangement from the global mainstream can cost a country its very sovereignty. This is why we have endeavored over the years so desperately to get into the front-runners’ group in global society.

Wealth inequalities can trigger social unrest and conflict in wealthy as well as poor countries when economies around the globe are in synchronized trouble. Advanced and developing economies alike are battling the risks that undermine stability and growth. Inequalities not only within individual countries but among different countries and continents threaten global peace and prosperity.

The Fourth High Level Forum on Aid Effectiveness, under the auspices of the Organization of Economic Cooperation and Development, will be held in late November in Busan. It aims to bring together donors and developing countries to consider ways of improving and reaffirming commitment to effective aid.

Over 2,000 people, including top government officials from 170 countries, will be attending the conference. Nearly 200 signatory countries to the United Nations Conventions to Combat Desertification met in Changwon, South Gyeongsang last month to address desertification, land degradation, and drought problems that affect lives of two billion people.

Our economic size and social maturity demand that we show more interest and make greater efforts in the areas of global aid and the fight against land degradation. We have already reached a social consensus to set an example by sharing growth at home with less fortunate countries abroad. Our choices and actions in this regard will give a boost to our national prestige and dignity – as well as benefit our national interests and welfare.

Since liberalization from Japanese rule a half-century ago, Korea has received colossal amounts of aid – $12.78 billion – from the international community. In 1995, the country changed its status from World Bank aid recipient to donor, and in 2009, Korea became the first major recipient of official development assistance from the OECD to turn into a major donor. The country’s first ODA of $5.7 million in 1991 has expanded to exceed $1 billion in less than two decades.

But the country’s overseas donations are still below the UN recommended target and the OECD average. Bill Gates, Microsoft chairman and well-known philanthropist, singled out Korea as exemplary because of our global commitment to providing international aid.

We must be more sincere and active in overseas assistance and aid, but according to our means. Our society has the extraordinary and unfinished mission of unification. Instead of trying to match other advanced economies in the scale of aid we give, we must try and concentrate on providing substantial aid in the areas where we can help the most.

We must enhance the effectiveness of aid by providing skills and technology for reforestation, ecology protection, education and medical care for children in impoverished societies. The world is becoming a tougher place in which to live. We have seen how the sincere devotion of a single man – Father John Lee Tae-seok – can bring about change not only in a small community but in an entire country from the late Korean priest’s honorable work in Sudan. Inspired by the selfless work of Father Lee and others like him, let us be wise and generous in supporting the development efforts of other societies in our global community.

Lee Hong-Koo is former prime minister of Korea and a member of The Asia Foundation’s board of trustees. This article first appeared in Korea Joongang Daily, and is republished here with the author’s permission.

On October 13, President Obama will host President Lee Myung-bak of South Korea for a state visit in Washington. President Lee will also address a joint session of the United States Congress. As only the fifth head of state to be given such full honors by President Obama, one would think that Koreans would follow this summit meeting with their closest ally with great interest. So far, however, it seems that the Korean media and the general public are not paying much attention.

On October 13, President Obama hosts President Lee Myung-bak of South Korea for a state visit in Washington. Photo: Flickr user KOREA.NET

One reason for this apparent low level of interest is that the U.S.-Korea relationship, at least at the official level, is in great shape. The two governments are closely aligned in their policies toward North Korea and other security interests in the region. President Obama has repeatedly praised South Korea for assuming a larger leadership role in the global community – such as hosting a G20 meeting last year and the High Level Forum on Aid in Busan later this year. The one challenging issue that has been linked to this visit is the long-delayed ratification of the Korea-U.S. Free Trade Agreement (FTA). Lee and Obama have advocated for the ratification, and Obama submitted the KORUS FTA, along with FTAs with Panama and Colombia, to the U.S. Congress where it was approved today by a bipartisan majority.

However, U.S. ratification of the FTA may be a mixed blessing for President Lee. He has also pressed the Korean National Assembly to follow U.S. action with swift ratification. But the opposition party and civil society are already mobilizing to call for renegotiation or rejection of the pact, or at least to make the political debate very difficult, as Korean parliamentarians and demonstrators are wont to do.

Koreans have not forgotten President Lee’s first official visit to Washington in March 2008, shortly after he assumed office, when he was received by President George W. Bush at Camp David. To pave the way for a successful visit, the new Lee administration quickly inked an agreement to re-open the Korean market to U.S. beef exports, banned here and in other countries since 2003 because of fears over BSE, or mad cow disease. This triggered massive (even by Korean standards) street demonstrations that lasted for several months and almost drove Lee from office. There were genuine concerns about the safety of U.S. beef; but more importantly, the perception that the Lee administration had rushed into an unbalanced agreement without consultation in order to please his American hosts galvanized the progressive opposition to Lee’s election. Recent exposure by WikiLeaks of U.S. Embassy reports to Washington in the period leading up to that debacle have stoked suspicions about the Lee administration’s ability to represent Korean interests to Washington.

Of course, it’s different this time. Or is it? Simmering uneasiness about the close relationship with the United States, and mixed feelings about the need for American troops to be stationed on Korean soil 60 years after the end of the Korean War, are constant, though latent, factors in Korean politics. Although North Korea’s recent aggressive stance has muted these feelings, Korean unease has increased in recent weeks with headline reports of two cases of alleged violent rape of Korean women by U.S. servicemen. This has revived calls by demonstrators and political observers for revision of the Status of Forces Agreement (SOFA) between Korea and the United States. Both governments are wary about the possible resurgence of anti-U.S. sentiment that such incidents have triggered in the past. Meanwhile, Koreans’ ambivalence about the role of foreigners in the economy has again been heightened by fears that the U.S. economic slump may be exported to Korea through the FTA and by suspect practices on the part of U.S. companies.

Even if President Lee has a successful high-profile visit to the United States and returns home carrying a U.S.-ratified FTA without sparking a domestic blowup, there is a good chance that Koreans will not give him much notice. The dominant issue in Seoul now – as in the U.S. – is domestic politics. The election season has been moved forward in Korea with the scheduling of a special election on October 26 to fill the seat of Seoul mayor, considered the second most important political post in the country. This will be followed by elections for a completely new National Assembly in April, and then the presidential election in December next year. The Seoul mayoral race will be the topic of another piece, but in brief, the emergence of an independent frontrunner from the civil society sector has upended the political landscape here like no other development in Korean politics in the last 20 years. It will be the top story for the next two weeks and threatens to scramble the contest for selecting the next president. This promises to be much more exciting than the old story of U.S.-Korea relations.

Edward P. Reed is The Asia Foundation’s country representative in Korea. He can be reached at ereed@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

Over the past year, The Asia Foundation in partnership with the Korea Development Institute (KDI) has convened a series of dialogues on Asian Approaches to Development Cooperation to discuss the experience and perspectives of six Asian countries: China, India, Korea, Malaysia, Singapore, and Thailand. The dialogues, involving development cooperation officials and policy analysts, from each country, reveal intriguing similarities across these countries on the philosophy, purpose, and modalities of their assistance. They also provide insight on the relevance of current international aid frameworks for their approach to development cooperation and whether donor alignment around an agreed set of principles is desirable or possible.

Outcomes from the series suggest that it is unlikely that Asian donors currently outside the tent will respond to the overtures to welcome them in. Fundamentally, Asian countries conceptualize development differently from traditional donors. This largely stems from the following:

• Their experience of being both aid recipients and aid donors – often simultaneously – often creates an aversion to using the donor-recipient dichotomy. “Aid” is rarely used to describe Asian cooperation partnerships and most countries do not consider themselves donors.

• Millennium Development Goals (MDGs) are not often used to describe either the goals or indicators of development cooperation in Asia. Rather, Asian countries in many cases tend to focus on mutual benefit with partners, respond to partner country requests, and emphasize shared and sustained growth.

• A more explicit linking of development cooperation with foreign and economic policy objectives, but with fewer policy conditionalities for cooperation partners.

• Many Asian nations view the notion of development as an investment rather than an altruistic contribution. Development is viewed as more than aid, encompassing trade, investment, and technology as part of the cooperation equation.

Cooperation modalities and sectoral preferences are also dissimilar between Asian countries and traditional donors. Asian countries prefer interest free loans, concessional loans through Export-Import banks, export credits, and other hybrid forms of development finance to provide project support usually to economic infrastructure investments. Technical assistance and training in or by the Asian country is also a significant cooperation modality, particularly among smaller countries like Malaysia and Singapore. These preferences are in contrast to traditional donors’ use of grants and program aid to support social sectors and governance-related programming.

Given this gulf in philosophy and practice, it is perhaps not surprising that many Asian donors have an aversion to adopting aid effectiveness frameworks and principles that they did not conceive. Amid the complex aid architecture with differing bodies focusing on different issues and development paradigms (MDGs, OECD/DAC, G20, UNDCF, South-South Cooperation Forums), Asian countries struggle to identify which, if any, of these bodies align with their interests. Korea – an Asian donor and a member of the DAC since 2010 and host of the Busan HLF4 – holds a unique and potentially pivotal role in finding convergence between diverse actors. The Korean government has made explicit its commitment to a new global compact for development cooperation which is inclusive of increasingly influential countries outside the DAC and which links the UN narrative of MDGs with the G20 narrative on sustainable and inclusive growth. Though Korea’s development approach is more akin to those of its regional neighbours than its DAC counterparts, it has taken the bold step to influence development practice and thinking from inside the DAC tent. Some common ground is emerging. For example, China currently participates in a China-DAC Study Group and has released a White Paper on foreign aid. India has announced plans to establish a development agency. Neither country is interested to join the DAC, however.

Perhaps the greatest prospects for alignment will come from partner/recipient countries and the principle of country ownership. The diversity and complexity of aid, while straining national aid management systems has also expanded opportunities for developing countries. In Sri Lanka (a recipient participant in The Asia Foundation/KDI dialogue series), traditional aid programming is declining while non-traditional development finance is rising. The Sri Lankan government’s desire for fair, non-extractive partnerships that promote sustainable results and non-political interference is increasingly met from non-traditional partners like China and India. At the same time, the government wants to drive its own development agenda and manage its resources from all channels. Asian cooperation partners, alongside traditional donors, are encouraged to make their country strategies for Sri Lanka explicit and transparent so that the government can match donors to projects according to its preferences. The voice of partner countries at Busan could play an influential role on Asian country perspectives on alignment.

HLF4 advocates for a new paradigm and new partnerships in international development cooperation. With Korea as its host, HLF4 has already gone farther than previous forums to expand the space for new actors and their approaches. Space however does not guarantee consensus. If traditional donors are hoping that China and India will follow Korea’s lead and embrace a set of Busan principles, they may be disappointed.

This piece was originally published on September 12 in The Broker, an independent international magazine on globalization and development.

Anthea Mulakala is The Asia Foundation’s country representative in Malaysia and regional advisor for donor relations. She can be reached at amulakala@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.