Reciprocal Relations between Official Development Assistance Recipient and Donor Countries: Case of South Korean Overseas Construction Business and Southeast Asian Countries' Economy

Abstract

In developing countries, official development assistance (ODA) is generally perceived to be an alternative means to develop infrastructure. Donor countries may expect benefits such as increased construction project orders in recipient countries. However, it remains arguable whether ODA contributes to reciprocal relations between recipient and donor countries. The case of South Korea can provide empirical data given that its government has expanded the amount of ODA to encourage overseas construction business while supporting Southeast Asian countries. In this research, gross national income (GNI), gross domestic product (GDP), foreign direct investment (FDI), and construction project orders awarded by South Korean construction companies in Vietnam, Bangladesh and Sri Lanka are analyzed according to the variation of ODA awarded by South Korea. The analysis results show that the influence of ODA upon economic situation of recipient countries varies according to their economic volume and development policy. From the donor country's perspective, enhanced performance of construction business can be expected by means of cooperation with local construction business.