Overview

Korea has experienced remarkable success in combining rapid economic growth with significant reductions in poverty.

Government of Korea policies resulted in real GDP growth averaging 10 percent annually between 1962 and 1994. This spectacular performance was fueled by annual export growth of 20 percent in real terms, while savings and investment rose sharply above 30 percent of GDP.

Korea is an exceptional example of an aid recipient turned a high-income country, with GNI per capita increasing rapidly from US$ 67 in the early 1950s to US$ 22,670 in 2012. Now the world’s 15th largest economy, Korea is a key development partner of the WBG and an important contributor to the International Development Association (IDA), the fund established to support the world’s poorest countries.

The Government of Korea began contributing to IDA in 1977. And as Korea positioned itself for an enhanced international role, the Government increased its contributions to IDA, entered into a co-financing framework agreement with the Bank, and created a number of trust funds.

Korea is the first former aid recipient to become a member of the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD). Korea joined  the DAC in November 2009. Korea also took the chairmanship of the G-20 summit in 2010.

Korea's experience in sustainable development, providing infrastructure and better services to improve the lives of the people, and its transition to a dynamic knowledge economy, provides lessons that can benefit many other developing countries.

World Bank Governor

Each member country is represented within the World Bank Group by a governor, who is generally the finance minister or the minister of development of the country concerned, and whose powers extend in particular to authorizing capital increases, approving financial statements, accepting or electing to suspend new members at the annual meetings. The governor for Korea is Hon. Oh-Seok Hyun, Deputy Prime Minister and Minister of Strategy and Finance.

World Bank Executive Director

The governor delegates responsibility for overseeing the day-to-day business of Korea’s interests at the Bank to the Executive Director (ED) for Australia, Cambodia, Kiribati, Korea (Republic of), Marshall Islands, Micronesia (Federated States of), Mongolia, New Zealand, Palau, Papua New Guinea, Samoa, Solomon Islands, Tuvalu and Vanuatu. EDs reside in Washington and normally meet twice a week to decide on borrowing and financial questions, projects, and policies that impact World Bank Group general operations. Michael Willcock is the current ED. Bok-Hwan Yu serves as alternate executive director.

Shares and Voting Power

The member countries of the World Bank Group have a given number of shares in the capital of the institution of which they are members; this number of shares determines their voting power when decisions are reached by the Board of Executive Directors.

Korea holds 1.39% of the shares in the International Bank for Reconstruction and Development (IBRD), with 1.34% of voting powers. It holds 0.76% of the voting power in the International Development Association (IDA). Korea has a 0.92% interest in the International Finance Corporation (IFC), with 0.90% of voting powers. Finally, Korea holds 0.45% of the shares and 0.47% of the voting power in the Multilateral Investment Guarantee Agency (MIGA).

For the latest voting status, please visit the Voting Powers page.

For information on Korea’s aid flows as a donor, please visit AidFlows.

 

The Republic of Korea became a member of the World Bank in 1955 and of the International Development Association (IDA), the Bank’s arm to assist the poorest countries, in 1961. The Bank began its operations in Korea in 1962 when it completed the first Country Economic Report and approved an IDA credit of US$17 million to expand and improve the Korean National Railroad.

By 1973, Korea’s economy had progressed sufficiently to require no further IDA assistance. The Bank then supported Korea through low interest loans, policy advice and technical assistance from IBRD, the International Bank for Reconstruction and Development. 

Over the years, from IDA and IBRD, the Bank completed 133 credit or loan projects in Korea, disbursing funds totaling $15 billion.

The Bank’s work in Korea evolved to match the country’s changing needs. In the early years, the Bank focused on lending for agriculture, irrigation, rural development, small and medium industry, transportation such as roads, ports, and railways, regional and urban development, and education. Investment in agriculture increased substantially in the 1970s, and then declined in the 1980s as the economy shifted to a greater emphasis on industrial development. Priorities in educational investment evolved as the economy demanded more skilled labor and research and development (R&D) for science and technology.

Later, social infrastructure such as urban water supply, sanitation, sewerage, and environment became a high priority as the country’s industrial sector and energy and transportation infrastructures became more developed. During this period, heavy emphasis was placed on achieving greater social equity through a fair distribution of income and wealth.

During the financial crisis of the late 1990s, the World Bank supported the Government of Korea’s reform programs in financial sector restructuring, corporate sector and labor market reforms and social safety nets through a series of adjustment loans, worth a total of $7 billion.

Currently, the World Bank Group has a series of partnerships and joint projects with Korean partners designed to enhance financial sector management, promote investment in green infrastructure and renewable energy, share know-how in information communications technology and knowledge sharing, as well as assist fragile and conflict-affected states.

For example, the Korea-World Bank Partnership Facility, launched in 2012, provides $90 million over three years to finance global and regional projects to support economic development and co-financing investments at the country level. The emphasis is on generating and transferring development best practices, with low and lower middle income countries eligible for funding under the new facility.

The World Bank Group will open a new main office and a liaison office in Korea in December, 2013. The new offices will support a broad range of development partnership opportunities with a focus on promoting best practices, by leveraging the Bank Group’s knowledge and convening power and Korea’s expertise in areas such as economic development policy, information communications technology, infrastructure and the financial sector.

In addition to the World Bank’s IBRD and IDA, the new World Bank Group office will also represent the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).