TVET Development and ODA for Developing Countries

Scholarly Technical Education Publication Series (STEPS) Vol. 4, 2020

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TVET Development and ODA for Developing Countries

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Authors:

Lee Miyeong
Korea Tourism College,
Icheon, Korea

Lee Namchul
Ministry of Education and Science, Asuncion, Paraguay
and Seoul Cyber University, Seoul, Korea

Abstract

The purpose of this paper is to suggest developing plans for developing countries through TVET support and cooperation of Korea ODA. To this end, the concept, history, support system, and the status of Korea's ODA support were reviewed. In addition, an in-depth analysis of the ODA in the TVET field was provided to support developing countries in Korea. Based on these analyzes, the policy recommendations were proposed to coexist with international developing cooperation with developing countries through Korea's ODA in terms of TVET.

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Introduction

Recently, many countries have been increasingly shown their interest in Korea's economic development and TVET success stories. It shares its Official Development Assistance (ODA) experience in TVET development with developing countries and serves as a bridge between developing and developed countries. It has received a lot of aid from several advanced countries, mainly the United States, from liberation in 1945 to economic reconstruction. By the end of the ’50s, the United States was a major donor country, and the power of foreign aid was strong behind Korea’s continued economic growth. Grant, which began to decline to its peak in 1957, began to be replaced by loan in late 1959.

With the enactment of ‘the Foreign Investment Promotion Act’ in January 1960, active foreign investment was introduced from developed countries other than the United States and actively implemented along with the establishment of a five-year economic development plan. Korea received about $12.7 billion in aid from 1945 to 1999. In 1995, by becoming a loan graduate of the World Bank, it was virtually excluded from the recipient countries. In 1991, UNDP recognized Korea as a net donor for technical assistance, and it began to fully donor to development assistance.

Korea’s ODA was founded in 1987 by Economic Development Cooperation Fund (EDCF) and began to assist the developing countries with concessional loans. Founded in 1991, the Korea International Cooperation Agency (KOICA) has been pushing for grant assistance and technical cooperation in earnest. As an emerging donor country, ODA has been continuously increased to contribute to the development and well-being of developing countries. Its ODA scale continued to increase from $58.74 million in 1991 to $2.4 billion in 2018, ranking 16th among 30 DAC (Development Assistance Committee) member countries.

The purpose of this study is to analyze the experience of ODA on technical vocational education and training (development in Korea. Also, this paper aims to share the best practices of Korea’s efficient policies and systems as a bridge between developing and developed countries. The methods for this study analyzed of related literatures and statistical data of government and international organizations.

Research Question, Methodology and Data

Research Question

The TVET is currently the most performed project among the ODA projects promoted by the Korean government. It is a project that has a great synergy effect of ODA through TVET-linked cooperation. Since support for this will increase in the future, it is necessary to create several modules and provides comprehensive support according to the demanded country.

The paper focuses on the following research question: How will the Korean government promote effective ODA policies in the field of TVET for developing countries.

Method

The methods for this study are analysis of literatures and related data, an expert advisory meeting, interviews with public officials (Asia, Latin America) and experts in the field of TVET at home and abroad, shared research results, and previously held policy debates for verifying the validity of policy recommenda-tions.

Scope and Limitation

The researchers used the annual data for the period 1991-2020, from the Korea International Cooperation Agency(KOICA), Korea Eximbank, and Prime Minister Office. KOICA provides raw data for grant and Korea Eximbank supports for loan in terms of country, region, sector, and type of aid every year. The Prime Minister Office (Committee for International Development Co-operation) annually announces the results of the integrated evaluation of international development cooperation.

There are a few limitations to this study. First, there are time and financial limitations in directly generating national level of ODA-related statistics for TVET in Korea. Second, the ODA statistics in the field of education issued by national institutions are divided into basic, secondary, TVET and higher education. Therefore, there is a limitation to classify TVET out of the total education budget.

Definition, History and TVET Support System of ODA in Korea

Official Development Assistance in Korea

ODA is defined as government aid designed to promote the economic development and welfare of developing countries. Loans and credits for military purposes are excluded. Aid may be provided bilaterally, from donor to recipient, or channeled through a multilateral development agency such as the United Nations or the World Bank. Aid includes grants, ‘soft’ loans (where the grant element is at least 25% of the total) and the provision of technical assistance. This definition of ODA has been unified since the Organization for Economic Cooperation and Development (DAC) was launched in 1961. ODA can be described with the following three key questions, as shown in Table 1.

Table 1: Three keys in ODA
Notes: 1) A grant refers to a ‘free’ form of assistance in cash, goods, and/or services provided without stipulations of repayment or redemption. Certain types of costs or expenses involved in implementing given projects of assistance may fall into the category of grants. 2) A loan refers to funding provided either in cash or goods with stipulations of liabilities for repayment. Concessional loans made as part of ODA are more favorable to the recipient country than other commercially available loans in terms of interest rates, maturity, and grace periods. In order to count as ODA, a concessional loan must have a grant element of 25% or greater. Source: ODA Korea (2020).

Operating Institution

Korean development co-operation policy sits with the Ministry of Foreign Affairs(MOFA) and the Ministry of Economy and Finance(MOEF) and programmes delivered by their respective implementing agencies, the KOICA for grants and the Korea EXIMbank for concessional loans. Together these two ministries manage around 80 percent of Korea’s ODA budget, with the balance spread over a large number of government departments and institutions.

The Committee for International Development Cooperation (CIDC’), chaired by the Prime Minister, oversees Korea’s development co-operation. The CIDC makes an effort to enhance development effectiveness through better co-ordination across ministries.

The agencies that execute ODAs in Korea can be classified into financial cooperation and technical cooperation institutions according to the type of cooperation in support projects. Korea’s institutional framework of ODA consists of a coordinating body, supervising ministries, and executing ministries and agencies.

Korea’s ODA is divided into bilateral grant, technical cooperation, bilateral loan, and multilateral grant. Most of the bilateral grant and technical cooperation is carried out through KOICA, a government-funded organization under the Ministry of Foreign Affairs. However, some government ministries and agencies, such as the Ministry of Education, the Ministry of Science and Technology, and the Ministry of Information and Communication, are also play role in the delivery of Korea’s ODA especially for grants and technical cooperation. Entrusted by the Ministry of Strategy and Finance(MOSF), the Korea EXIMbank is responsible for the administrative operation of the EDCF, including appraisal of project, execution of the loan agreements, and loan disbursements. Other duties include principal/interest payments collection, project supervision, and ex-post evaluation of project operations (Korea EXIMbabk, 2020).

CIDC deliberates and coordinates major policies for Korea’s international development cooperation. It established the Country Partnership Strategies (hereafter ‘CPS’), which designated 24 countries (2016-2020) as the second major ODA partner countries in 2015. Korea’s 2016-20 mid-term strategy for development cooperation' aligns with the 2030 agenda for sustainable development. It includes a list of partner countries and identifies policy priorities, including sharing Korea’s development experience and building economic and social infrastructure (OECD, 2019). The CPS is an ODA national strategy, including key areas of cooperation such as transportation, education, health and implementation plans. Since the establishment of a CPS for 24 major partner countries, there has been a need to reflect changes such as regime change and the announcement of new development strategies. In December 2017, the CIDC approved the amendment and supplementation of CPS after interim evaluation in order to enhance its effectiveness as a country-specific ODA strategy, as shown in Table 2

Table 2: Comparison of 2nd ODA key partner countries and revised strategies

DA Programming Progress

The entire process of ODA programming consists of planning, delivering, monitoring and evaluating, and feedback process in general. In the phase of planning, the mid-term strategy and the CPS provide guidance to executing agencies to design appropriate ODA program for partner countries. Each agency identifies candidate ODA programs through consultation with partner countries and assesses feasibility from comprehensive dimension. Once the executing agencies decide ODA programs to support and establish its business plan for the next year, the CIDC review total ODA programs to prevent overlaps of programs among different agencies and to promote inter-ministerial collaborations for greater efficiency, especially in the same country or region.

For the next step, executing agencies implement ODA programs according to their own procedures, however, all agencies should follow the directions specified in the Strategic Plan such as untying aid, considering cross-cutting issue, and managing for development result. The progress of all on-going programs is monitored at the CIDC level and individual agency level. CIDC established an integrated monitoring system-a one-step-shop database for monitoring the implementation of all Koreas ODA projects built in 2011. By using the database system, each aid agency will input project details such as country, modality, volume, and period and progresses step by step. The system, which will facilitate information sharing and mutual review among development players, will be updated at least every four months or whenever necessary.

Evaluation and feedback is conducted in the middle and at the end of the intervention. There is two-track evaluation system; integrated evaluation and self-evaluation. Self-evaluation is conducted by executing agencies separately and integrated evaluation is managed by the Sub-committee for Evaluation chaired by deputy minister for national agenda of the Prime Minister’s Office under the CIDC. For the case of KOICA and EDCF, they have their own evaluation office, guidelines and mid-term and annual evaluation plan, and feedback system, however, most of other agencies don’t have well-organized evaluation system so far. The CIDC developed an integrated evaluation mechanism in 2009. The CIDC set ‘Guidelines on the Evaluation of International Development Cooperation’ and evaluates related policies and project outcomes, based on the Framework Act (Article 13). Under the integrated evaluation system, each executing agency submits its self-evaluation reports to the Sub-committee for Evaluation. Also, this committee evaluates randomly-selected projects to ensure objectivity in its evaluation (ODA Korea, 2018)

Korea’s Support Status of ODA in TVET

ODA Form

Grant and loan of development means ODA and other funds. Other funds include other public funds such as export credit and investment finance, private funds such as foreign direct investment, and private grants by NGOs, as shown in Table 3

Table 3: A Comparative analysis of the methods, types and contents of support for development assistance

Size of ODA

Korea’s ODA has grown steadily since joining the DAC, but ODA budgets and projections remain well below internationally agreed targets. Korea’s ODA in 2019 increased by $160 million from the year 2018, due to an increase in bilateral assistance. According to OECD (2019), the combined amount of ODA from the DAC member states stood at $152.8 billion, and the ODA/GNI ratio, the indicator of the level of aid relative to the size of the economy, was 0.30 percent on average. Korea’s ODA/GNI ratio was 0.15 percent, a 0.01 percentage point increase from the previous year (0.14 percent). The average annual increase rate of the Korea’s ODA from 2010 to 2019 is 11.9 percent, the highest among the member states. The Korea’s ODA more than doubled from 2010(US$1.17 billion) to 2019(US$2.52 billion).

Korea was followed by Hungary with 10.5 percent and Germany with 7.0 percent. The largest ODA provider among the DAC members is the United States, followed by Germany. Korea provided US$2.52 billion of ODA in 2019, the 15th largest among the member states of the OECD’s DAC(OECD, 2019).

In Korea, among the $2,521 million of ODA, bilateral aid was $1,903 million (75.5 percent) and multilateral aid was $618 million (24.5 percent). The ODA/GNI ratio has increased from 0.14 in 2018 to 0.15 in 2019, The Strategic Plan also projects a steady increase of the ODA/GNI ratio up to 0.20 percent by 2020, by which Korea can come close to the average level of DAC members. Among the bilateral aid, grant is $1,217 million (increase of 7.6 percent compared to the previous year), and the amount of loan that provides the concessional loan is $686 million (increase of 13.7 percent compared to the previous year)

Table 4: Provisional statistics for 2019 Korea ODA (in million dollars)

The Strategic Plan is stated to maintain the bilateral to multilateral ODA ratio at 75:25 in parallel with the steady increase in the total ODA volume by 2015. Within bilateral ODA, Grants accounted for approximately 60-70% of Korea’s bilateral ODA with slight variations in the past ten years (OECD, 2020).

In 2020, the confirmed amount of ODA is about 3.427 trillion won (KRW) , with a total of 1,551 projects being pushed by 41 institutions. It increased by 226.7 billion won from the fixed amount of 3.2003 trillion won in 2019, up 7.1 percent from a year earlier. Participating institutions are the same as 41 in 2019. The number of projects increased by 147(10 percent) compared to 1,404 in 2019.

Region and Country

Korea has had close ties with Asian countries given its geographic proximity and cultural familiarity. This has been reflected in its concentration of aid allocation to Asia. For instance, Asia received the largest portion of bilateral ODA (approximately 53 percent) during the past ten years.

As part of its commitment to join the global efforts for timely achievement of the MDGs, Korea has increased its allocations for Africa where Highly Indebted Poor Countries (HIPCs) are concentrated, with an emphasis on poverty alleviation and capacity building. The African partners received about 21 percent of bilateral ODA in the past ten years. Others including Central and South America, Middle East and CIS, and Oceania received 19 percent of bilateral ODA in the past ten years. The concentration of bilateral ODA in Asian countries has decreased in last five years, and it was 46.3 percent in 2015. On the other hand, the amount and the proportion of bilateral ODA for Africa have steadily increased, and it comprises 23.9 percent in 2015

Sector

In 2006 and 2015, about 70.2 percent of total bilateral ODA was targeted to social and economic infrastructures development, with a sectoral focus on education, health, and transportation identified as priorities in partner countries' development strategies. In 2017, $970 million (39.7 percent) of bilateral ODA commitments was allocated to economic services, while $903 million (36.9 percent) of bilateral ODA commitments was allocated to social infrastructure and services, with a focus on transport and communications ($849 million) and health and population ($406 million). Humanitarian aid amounted to $88 million. In 2017, Korea committed $1.2 billion (50.9 percent of bilateral allocable aid) to promote aid for trade and improve developing countries’ trade performance and integration into the world economy.

The ratio of bilateral cooperation to multilateral cooperation among the total ODA is about 81 to 19, and the ratio between grant and loan cooperation is 43:57. In 2019, the ratio of bilateral cooperation to multilateral cooperation increased by 3 percent points from 78 to 22. In addition, the ratio of grant and loan cooperation in 2019 was 46 to 54, and the ratio of grant cooperation increased 3 percent point compared to the previous year. In 2017, bilateral ODA was primarily focused on Asia and sub-Saharan Africa. $458 million was allocated to Far East Asia, and $283 million to South and Central Asia. $392 million was allocated to sub-Saharan Africa.

Table 5: Size of ODA by region and type in 2020

In 2020, ODA by sctor increased, which was led by transportation (13.6 percent), education (10.4 percent), and health (10.0 percent). The public administration sector’s allocation slightly increased by 1.1 percent point as compared to the previous year. This was further illustrated in Table 6

Table 6: Size of ODA by sector and type in 2020

Type

In 2020, ODA by type of support was shown in the order of volunteer dispatch (64.2 percent), training business (included scholarship support (5.7 percent ), program (5.5 percent), development program (4.5 percent), and is supported in various forms, as shown in Table 7.

Table 7: ODA by type in 2020

ODA Support in TVET Field in Korea

ODA Overview for TVET

In the field of TVET, ODA is a type of business that strengthens the capacity of individuals and society by enabling intangible and tangible social capital accumulation by acquiring knowledge and skills. In OECD/DAC, vocational training is divided into four areas such as basic education (primary education, early childhood education, etc), secondary education (secondary education, vocational education), higher education higher education, etc), and general education (teacher training, etc) is subdivided.

Recently, the concept difference between education and training has disappeared, and rather, the term of vocational education and training is used by integrating education and training. In particular, World Bank and ADB are integrating and promoting vocational education and training through TVET.

Currently, ODA projects in the field of TVET are providing policy advice to establish qualifications and other systems. In addition, the ODA of TVET project is mainly focused on project construction such as building an infrastructure for vocational training institutions, dispatching experts, and inviting trainees.

The Korean government has selected the CPS, a key area of ODA to support developing countries. In CPS, it was selected as a key field project in developing countries with many TVET and human resource development.

In the future, along with the progress of various international development cooperation projects in each field and the demand for support and cooperation in the TVET field has increased significantly in developing countries recently. Moreover, in the field of TVET, the interest and local demand of developing countries are high, so it is necessary to prepare an efficiency and systemization plan that can respond to this.

In recent years, the type of business execution in the development cooperation field is changing from a project-oriented business to a program-type business, and from architecture and equipment-oriented hardware types to technology, experience, and know-how-oriented software types. In addition, the paradigm is shifting from development cooperation projects to strategic types such as sectoral and regional support.

Evaluation Results for TVET Projects

The prime minister office selected and evaluated 20 out of 150 projects completed in 2014-2017 in 2018. By field of project, size, region, type, and institution were considered, and were divided into basic education (2), secondary education (6), higher education (4), and vocational training (8). Table 8 describes the business targeted for vocational training.

The vocational training project is still the most carried out project, but there are many independent projects, which are limited in reflecting it in actual systems and policies. Considering the industrial structure of agricultural-oriented partner countries, there is a limit to actual performance in order for ODA business in TVET field to be linked to employment.

Table 8: Evaluation results of TVET Projects Under Korea’s ODA

ODA Promotions of TVET Projects

KOICA and EDCF are promoting the TVET ODA project individually at the request of the recipient country. Vocational training-related organizations have very little their own ODA budget. It is a form that participates in KOICA and EDCF projects depending on the situation without linkage and roles allocation between institutions.

PMC (Project Management Consulting)

PMC advises the establishment and remodeling of training institutions in the recipient country. PMC also provides training facility and equipment placement advice, and training to continuous capacity building.

Invitation Training

Invitation training projects include competency development of recipient country participant, target training by participant, training of managers and training teachers. The training projects are oriented to trainee participation and project-oriented training.

Expert Dispatch

The dispatch of experts will promote the following projects. Experts provide advice on facilities for each department (education environment conditions, equipment placement, etc), equipment lists and specifications for each department, and equipment inspection. It also advises on how to cultivate trainees and improve the employment rate, and how to improve customer satisfaction for students and businesses.

Curriculum Organization and Textbook Development

The following tasks are carried out in the curriculum organization and textbook development project. It includes the organization of curriculums for each department, the establishment of facility equipment standards, the development of training materials for each department, the development of instructional plans for each subject, and the development of instructional guidance and support for training materials(PPT, video etc).

Institutions Related to TVET

Table 12 describes specialty of the TVET and business areas of government agencies, private organizations, and national research institutes under the Government of Korea.

Table 10: Comparison of institutions, specialized fields and business fields in TVET

Recommendations

The ODA project is being decided and executed by the government. However, it is necessary to diversify programs for cooperation with civil society and expand development cooperation projects utilizing the technology of private companies. In addition, it is necessary to continuously expand the ODA size by discovering new projects and expanding the size of projects that actively reflect the demands of the recipient countries. For such policies to be established and implemented, long-term and systematic ODA policies must be established.

The proportion of ODA projects to developing countries in the TVET sector is increasing every year. The ODA business in TVET for developing countries is expected to continue to grow in the future. Korea's earliest ODA projects were centered on developing countries in Asia, but are gradually expanding to Africa and Latin America.

Strengthen the connection between the ODA project implementation institution and university

In the case of ODA's projects, the Ministry of Strategy and Finance is the main agency and the EXIM Bank is the executive agency. In the case of grant, on the other hand, the Foreign Ministry is in charge and the KOICA is the executive agency. In addition, about 30 government agencies and local governments other than the KOICA are also providing grant assistance.

Recently many universities carry out TVET ODA project for developing countries. It is difficult for universities to pursue ODA projects for developing countries by securing funds independently. With financial support from the KOICA and the EXIM Bank of Korea, it is necessary to plan a mid-to long-term support strategy in cooperation with the establishment of a system for strengthening research functions in the field of TVET. As a way to resolve these issues, KOICA, EXIM Bank of Korea and universities should sign a memorandum of understanding. It is possible to seek realization and positiveness of work through this action.

Universities have professors who combine theory and practice in various fields, including electricity, electronics, machinery and automobiles, IT, design, hotel management and restaurant businesses. Of course, infrastructure related to this is well-equipped. Most of these areas are required for recent projects in developing countries. Therefore, if universities strategically participate in ODA in terms of TVET, it will not only improve internationalization indicators, but also help attract international students and promote universities.

In order to achieve the purpose of this study, many domestic and foreign related data were analyzed. In addition, for in-depth analysis, ODA expert interviews and meetings were conducted. The recommendations derived through this are as follows.

Utilize national research institutes and universities

According to the results of many policy evaluation studies in TVET fields, ODA is focusing on building infrastructure for vocational education and training and supporting equipment and construction of building and labotary. However, it has been pointed out that ODA has weak S/W support, including the establishment and improvement of the system and human resources development. The role of the PMC should be played by national research institutes and universities to promote the effectiveness of the ODA project. In order to strengthen the ODA business in the TVET field, the focus is on providing software rather than hardware.

Establish and utilize global partnerships to enhance TVET capabilities

It is necessary to carry out various researches and projects in cooperation with international organizations in the field of TVET. To this end, various cooperative projects such as World Bank, ILO, ADB, CPSC and SEAMEO VOCTECH etc should be maintained and expanded.

Development of ODA professional TVET training programs

Recently, the form of business execution in the field of development cooperation has diversified. The paradigm is shifting from the project type to the program type and from hardware type to software type. In line with this trend, it is necessary to develop curriculums for fostering and retraining experts in the field of ODA in specialized research institutions and universities. To this end, the government should establish and utilize a cooperative system with officials in charge of the KOICA and the EXIM Bank of Korea and various entities, including the government, private organizations and universities.

Training and utilization of evaluation experts

Private participation in the stages of project implementation is expanding, but private experts’ participation in project review and evaluation is low. It has been argued that professionalism and objectivity are insufficient. Self-assessment requires the participation of private experts, and it is necessary to continuously cultivate experts in evaluation.

Training and utilization of evaluation experts

For learners who cannot participate in TVET training in the classroom directly due to social problems or personal reasons caused by Corona 19 worldwide, training institutions need to provide online TVET training.

Establish and utilize TVET-related networks at the national

There are many political initiatives and associations in the network that work internationally to solve common challenges in the field of TVET, such as UNESCO-UNEVOC, NARRO, SEAMEO, RAVRTE, IVETA, CPSC and CINTERFOR. These international networks or organizations serve as catalysts for providing information about multinational projects in vocational education and training. In order to establish and utilize TVET-related networks at the national level, the following measures are proposed. We try to establish objective cooperative partnership agreement for the network to strengthen the impact of cooperation on improving TVET policies at the national level.

TVET Implementation via Online

For learners who cannot participate in TVET in the classroom directly due to social problems or personal reasons caused by Corona 19 worldwide, training institutions need to provide online TVET. On-line TVET should provides comprehensive education and training services tailored to learners so that learning information can be easily used by anyone, anytime, anywhere. Online education and training should contribute to the activation of education by utilizing various online delivery systems such as portal, mobile, and SNS.

Conclusions

Korea is recognized as an excellent case of a successful transition from a recipient country to a major donor country in a short period of time. In particular, Korea has a comparative advantage over other DAC donor countries because it has developed knowledge and development experience based on the actual experience of the recipient country among developing countries.

Korea shares its ODA experience in TVET development with developing countries and serves as a bridge between developing and developed countries. Korea has already established a number of TVET institutions in developing countries and is steadily promoting various policy advice.

In the TVET field, there is a growing demand for international development cooperation from developing countries, but various projects other than the invited training program have not been properly implemented. In developing countries, it is difficult to analyze the demand for technical manpower in the labor market, lack of systems involved in the TVET system and operation, and insufficient response to the demands of TVET programs. Developing countries have a relatively high proportion of younger age groups, so they have high growth potential and high geopolitical value as a new base region connecting the East and the West. Korea is in a position to serve as a bridge between developed and developing countries, and is a key country that supports economic and social development in developing countries.

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