Korea’s Cooperation with ASEAN and the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) Republic of Korea (ROK) Cooperation Fund (BKCF)
Hong Sun-beom (Former head of KOICA office in Busan)
To date, the concept of ‘ASEAN’ has been generally recognized as ‘Southeast Asian countries’ apart from scholars or relevant individuals to the region. Nonetheless, interests in ASEAN have increased significantly in the past 10 years or so. The three ASEAN-Korea Commemorative Summits (2009, 2014, 2019) and the 1st Mekong-Korea Summit (2019) held in Korea drew public attention towards ASEAN. In particular, interest in Jeju (2009) and Busan (2014, 2019) as the host cities of those events were very high.
In addition, ASEAN has rapidly begun to attract the attention of Korea as a strategic partner for win-win development, starting with the previous Korean administration's New Southern Policy. Taking the “2022 ASEAN Summit” held in Cambodia last year as an opportunity, the newly launched Korean government participated in ASEAN-related multilateral summits such as the ASEAN-Korea Summit, ASEAN+3, and the East Asia Summit (EAS), and strongly expressed our will for cooperation with ASEAN. Indeed, our country has recognized the importance of cooperation with ASEAN, and has steadily developed strategic diplomatic relations. Korea has also sequentially established partial dialogue partners (1989), full dialogue partners (1991), comprehensive cooperative partnership (2004), and strategic partnership (2010), and reached an agreement with ASEAN to upgrade the relationship to a comprehensive strategic partnership in 2024 during the 35th anniversary of the establishment of dialogue relations with ASEAN. This is the highest level of partnership with the ASEAN dialogue partner.
Why are we paying more attention to ASEAN? Some notable reasons include: First, diplomatically ASEAN is an important partner on issues related to the Korean Peninsula given that all of its member countries have diplomatic relations with South and North Korea simultaneously. In addition, ASEAN is Korea's 1st visit, 2nd trade, and 3rd investment destination (as of 2021) in terms of people-to-people exchanges and economic activities. Above all, ASEAN is also an Official Development Assistance (ODA) partner for Korea. Among Korea's 27 ODA priority partner countries, six ASEAN countries (CLMV + Indonesia and the Philippines) account for about 29% of Korea's total ODA. Based on Korea’s Official Development Assistance (ODA) strategy and the development policies and demands of ASEAN countries, the Korean government selects key cooperation areas such as transportation, water, health-sanitation, education, environmental protection, and energy, and implements ODA. ODA is the Korean government's cooperation strategy with ASEAN, and is actively being used for mutual assistance and mutual cooperation in politics, economy, and security.
The Korean government has also initiated three cooperation funds as a financial basis for strengthening practical cooperation with ASEAN. As of 2022, the ASEAN-ROK Cooperation Fund (AKCF, 1990) deposits $16 million annually in the ASEAN Secretariat and has been actively utilized to implement various education, training, exchange, and cooperation projects for 10 ASEAN countries. The Korea-Mekong Cooperation Fund (MKCF, 2012) donated $5 million annually to the Mekong Institute, and it is being used to alleviate the development gap between the five Mekong countries (Cambodia, Laos, Myanmar, Vietnam, and Thailand), improve connectivity, and strengthen cooperation between Korea and the Mekong. The BIMP-EAGA-ROK Cooperation Fund (BKCF, 2021) is the most recent fund. Additionally, by reflecting the common demand for development in the environmental sector of the four member countries, the Global Green Growth Institute (GGGI) has been designated as the depository, and an annual fund of 3 million dollars is being operated. It is being used for environment, tourism, connectivity (transportation, trade, investment, ICT, energy infrastructure, etc.), agricultural and fishery cooperation projects. These funds will be significantly increased over the next five years, doubling their current size.
*GGGI is an international organization established in Seoul to support low-carbon, green growth strategies in developing countries (Non-profit foundation in June 2010 → Certified as an international organization in June 2012)
Meanwhile, within ASEAN, there are various subregional cooperation organizations including the IMS-GT (1989), the IMT-GT (1993), the GMS (1992), and the BIMP-EAGA (1994). Among these, the BIMP-EAGA experienced a period of stagnation due to the Asian financial crisis (1997), but it has recently established a full-fledged cooperative relationship with Korea. Korea has been exerting efforts to accelerate cooperation with the BIMP-EAGA in earnest by creating the BIMP-EAGA-ROK Cooperation Fund (BKCF) in 2021.
Looking at the latest trends, through the Korea and the BIMP-EAGA Senior Management Meeting (SOM, 2021, 2022), discussions over the increase in the BIMP-EAGA-ROK Cooperation Fund (BKCF), especially in the environment (including climate change response and renewable energy), connectivity, and tourism sectors took place. The ‘Mindanao Cacao Growers Help Project’ and the ‘Research Project on Establishment of a Renewable Energy Certification System’ were selected in the 1st project competition of the BIMP-EAGA-ROK Cooperation Fund (BKCF). Meanwhile, in the 2nd project competition, a total of eight proposals were selected in the fields of environment and tourism, such as photovoltaic power generation, water supply improvement, and ecotourism.
Looking at the current status of the operation of the BIMP-EAGA-ROK Cooperation Fund (BKCF), there are several noteworthy points. First, it is a project selection by public offering (competition). Projects are selected and funded through a public competition targeting Korea and the BIMP-EAGA government departments, public institutions, universities, research institutes, and NGOs. Second, the size of the fund is small compared to other ASEAN-related funds. As it is a start-up fund, it is currently about 300 million dollars, and the budget is relatively small compared to the ASEAN-Korea Cooperation Fund (AKCF, 16 million dollars) and the Korea-Mekong Cooperation Fund (MKCF, 5 million dollars). Third, the project period is short, namely 1-2 years, and the number of project selections compared to the budget is high. According to the project cost support regulations of GGGI as the fund management agency, depending on the project proposal period, the amount of support ranges from $50,000 to $300,000 for one year and $100,000 to a maximum of $300,000 for two years. In the case of multinational projects, up to $200,000 per country can be supported. In summary, the annual subsidy per project is at least $50,000 to $100,000 (approximately 65 million won to 130 million won), and a maximum of $300,000 (approximately 390 million won). Through this, it is possible to estimate the scale of the eight projects selected in the recently held second project proposal competition.
For effective partnership and cooperation between Korea-BIMP-EAGA, it is necessary to think more about whether it has sufficient competitiveness in relation to strategic and efficient management plans for the Cooperation Fund (BKCF). A differentiated strategy is required to secure competitiveness such as ODA projects of other overseas donor institutions within the BIMP-EAGA on the higher scale, existing loan-free ODA projects to ASEAN by the Korean government, and the ASEAN-Korea Cooperation Fund (AKCF). Since it is still in its early stage, there is no clear mid- to long-term strategy, and it is somewhat regrettable that there is no strategic difference between them. The good news is the government's strong will to expand the fund is expected.
In order for the BKCF to develop and grow in the future, it would be good to solidify the existing shape, and to try the following changes and efforts. First, ODA in the maritime and fisheries sector should be strengthened. It is necessary to develop maritime and fisheries fields such as aquaculture, processing, storage, and fisheries cooperatives as specialized industries in line with the fund focusing on maritime cooperation in Southeast Asia. Considering the current form of fund management, it would be a strategic field that has a great ripple effect and fits the vision of the BIMP-EAGA. Second, it is necessary to break away from dependence on public offering projects. If we rely entirely on public offering projects or get caught up in selecting too many projects, the original strategic direction of the cooperative fund may be lost. In addition, efficiency or ripple effects may not be felt and thus we should be vigilant. If needed, it is also necessary to promote a separate ‘strategic-planning project’ apart from the competition project. Third, it is necessary to lead the balanced participation of member states. When four Southeast Asian countries are proposing a public competition project, efforts to induce and coordinate participation are also necessary so that participation can be balanced without being biased.
There is still not enough public consensus or awareness of the cooperation between Korea and the BIMP-EAGA. In addition to local support projects for economic growth in ASEAN member countries, domestic awareness-raising activities in Korea are also needed through academic events and online promotion. Moreover, through the expansion of exchange and cooperation with the BIMP-EAGA, if regional understanding of the BIMP-EAGA and close follow-up studies are followed, it is expected that the BIMP-EAGA-ROK Cooperation Fund (BKCF) will greatly contribute to the development of the BIMP-EAGA and the growth of Korea and ASEAN as mutually beneficial and cooperative partners.
