The Direction of Inter-Korean Cooperation Fund Based on ODA Standard

Abstract

his paper aims to evaluate IKCF (Inter-Korean Cooperation Fund) based on the ODA/DAC standard. For this purpose, the ODA expenditure in IKCF is investigated, after which the trend for the past 20 years is analyzed. By comparing with the ODA guideline suggested by the DAC, this paper suggests the future direction of IKCF as follows. First, S. Korea’s humanitarian aid ratio to the North is too much compared to that of the DAC recommendation, therefore, much of it should be converted to development assistance. Second, the grant ratio is already high enough, and it is advised to use loan strategically to facilitate market economy of the North. Third, multilateral aid to the North is relatively low, and should be encouraged to grow up to the DAC standard. Fourth, untied aid ratio should be enhanced, but not to that of the DAC standard but to Korea’s untied aid ratio to the other countries.