Deputy Prime Minister Choo, Secretary Uy, distinguished guests and colleagues, let me welcome you to the 10th anniversary celebration of the World Bank’s Korea Office.
Korea joined the World Bank in 1955, almost 70 years ago.
Our first financing arrangement came in 1962, when representatives of Korea and the World Bank signed an agreement for the International Development Association to provide $14 million in financing for railroad projects.
These first projects included completing the Hwanji line, procuring new rolling stock and establishing a modern accounting system for the National Railroad.
At the time of this project, Korea was still one of the poorest countries in the world and in great need of foreign capital to finance investment.
From these first projects, the relationship between Korea and the World Bank grew. In the following years, Korea borrowed from IDA to build highways, irrigation projects, schools, universities and – more railways.
Within a decade of signing the agreement for those first railroad projects, Korea had graduated from IDA. And only five years after that, in 1977, Korea became a contributor to IDA.
This is a remarkable transition. Within 15 years, Korea went from IDA recipient to IDA donor. Korea is the textbook example of how IDA financing can be a catalyst for economic development and poverty reduction.
Although Korea quickly graduated from IDA, its relationship with the World Bank did not end there. Most of you will know that the next tier of assistance for countries comes through the International Bank for Reconstruction and Development, or IBRD – the arm of the World Bank focused mainly on providing development finance to middle-income countries.
This is where Korea moved after its graduation from IDA. And as Korea’s economy grew in size and complexity, the type of support it demanded from the World Bank became more sophisticated.
In place of the infrastructure projects of the 1960s and 1970s, Korea increasingly sought to work with the World Bank on issues like industrial development, workforce skills and education, and research and development.
This continued through to the mid1990s, by which time Korea had repaid all the financing it had received from the IBRD over previous decades. The financing relationship resumed after the Asian Financial Crisis of 199798, but these loans were repaid quickly as Korea’s economy recovered.
So, overall, this was an extraordinarily successful partnership. I am proud that the World Bank could play this influential role in Korea’s development story.
And since then, Korea has continued to go from strength to strength. In the six decades since 1960, Korea’s per capita GDP rose from $158 to nearly $35,000, representing average annual growth of more than 7 percent. Literacy rates rose, poverty rates fell.
Korea’s journey is an inspirational example for other developing countries. The power of Korea’s example is not just that it is now highincome, but that the transition from low to highincome happened so quickly — in fact, within the living memory of many current Korean citizens.
It is possible to get firsthand accounts of the process of Korea’s development — of the things that worked well, and the things that didn’t work so well. We can still talk to the people who were working in public policy, the private sector and academia at the time this process was happening.
Recognizing the power of this example, and the demands from other countries to hear about Korea’s development experience, the Korean Government and the World Bank partnered again in 2013 to set up an office in Incheon, whose tenth birthday we are celebrating today.
Our team works with Korean partners to ensure the lessons of Korea’s development experience are available to other World Bank member countries and are used to inform the design and implementation of World Bank projects, particularly in East Asia and the Pacific.
The office focuses on the application of technology and innovation to development problems, an area in which Korea’s success is recognized around the world. It has been a fruitful partnership, and one that I hope continues for many years to come.
So, let me thank you all for joining us today — both our partners from Korea and those who have come from around the world. I hope you enjoy today’s discussions.
Let me finish by thanking the Korean Government, particularly Deputy Prime Minister Choo and his staff in the Ministry of Economy and Finance, for their continued support of the World Bank Group. Your knowledge of development, and your willingness to share that knowledge, allows the World Bank to support deeper development impact in our client countries.