From recipient to donor country: evolving relationship between ADB and Korea
Skyscrapers are seen beyond the roof of a hanok, a traditional Korean-style house, in Songdo, Incheon, Monday, where the 56th annual meeting of the Asian Development Bank is being held. Korea Times photo by Choi Won-suk
ADB's annual meeting kicks off in Incheon, a city transformed by economic aid from the bank
By Lee Yeon-woo
During the 1960s, when Korea was still recovering from the 1950-53 Korean War, developing infrastructure such as highways and ports seemed like an impossible dream.
At that time, the country's gross domestic product (GDP) per capita was around $150, and there was barely enough money to support the population's basic needs, including food. Still, infrastructure development was crucial for the country's economic improvement, given its heavy reliance on exports.
The silver lining came from the Asian Development Bank (ADB), which Korea joined as a founding member. Established in 1966, the bank is dedicated to accelerating the social and economic development of its members.
The bank loaned 1.9 billion won ($1.42 million) to construct the Gyeongin Expressway, the country's oldest highway that connects Seoul and Incheon, out of the total project costs of 3.2 billion won. Several years later, another 30.3 billion won was injected from the bank to expand Incheon Port twice, playing a pivotal role in the country's trade.
Dignitaries participate in the opening ceremony for the Gyeongin Expressway in this 1969 photo. Korea Times file
The bank loaned $2.33 billion to the country from 1968 to 1988 when Korea marked an end to its recipient country status, and an additional $4 billion in 1997 at the time of the Asian financial crisis. Based on that aid, Korea was able to lay the foundation for leaping into the top 10 list of the world's most advanced economies. Korea remains the only member country to have switched its status from recipient to donor.
In Incheon, the city where the ADB has contributed its growth, the 56th annual meeting of its board of governors is being held from May 2 to 5. Around 5,000 people, including finance ministers and central bank governors around the world, are attending the meeting, which is the largest in scale, according to the bank.
This is the third time for Korea to invite the bank's member countries, following the previous two meetings held in Seoul in 1970 and Jeju Island in 2004. The country is serving as the chair country for one year until the end of 2023, leading discussions on development agendas such as reducing poverty and boosting inclusive growth.
The 37th Asian Development Bank annual meeting is held on Jeju Island in this May 2004 file photo. Yonhap
“Korea's vast facets of development experience, ranging from the K-pop sector to its successful transformation from a previous recipient country until 1988 to a donor country, could be shared among member countries at the meeting,” ADB President Masatsugu Asakawa said in his congratulatory message last year when Korea was named as the next chair country.
The country holds the eighth-highest number of shares among member countries and contributes to economic cooperation through various channels such as the Asian Development Fund and the Technical Assistance Special Fund.
Performers promote Korea's hosting of the 56th Asian Development Bank's (ADB) annual meeting during the 55th meeting in Manila, the Philippines, in this September 2022 photo. Courtesy of ADB
Another economic leap expected during meeting
Under the theme of “Rebounding Asia: Recover, Reconnect and Reform,” the Korean government plans to use this year's ADB meeting as an opportunity to inject vitality into its economy again, which has been showing signs of weakening recently due to sluggish exports.
A promotional event and one-on-one consultations for Korean companies are scheduled during the meeting, providing them with overseas bidding know-how. Information sessions about Indonesia's new capital construction project are planned for interested companies as well.
The meeting is also expected to stimulate domestic spending, bolstered by an influx of foreign visitors. To this end, Korean food culture and tourism promotion halls are operated within the ADB meeting venue, along with a Korean Culture Night event featuring the world-famous K-pop group NewJeans.
A nightscape view of Incheon's Songdo, where the 56th Asian Development Bank's annual meeting takes place / Courtesy of Incheon Tourism Organization