Abstract
South Korea’s Rural Development Administration embarked on the Korean Programs on International Agriculture (KOPIA) in six developing countries for agricultural development assistance in 2009, and the programs were undertaken in 21 countries in 2018. The purposes of the KOPIA are to introduce new agricultural technologies by cooperative research and development, and to extend developed technologies to farmers and agricultural businesses. In this paper, the economic effects of the KOPIA are estimated in 23 recipient countries in terms of their production and value-added inducement effect. In doing so, the inter-industry relation analysis method is used with an input-output table for each country from the Eora multi-region input-output (Eora MRIO) database. From the analysis between 2009 and 2017, the production inducement effect (PIE) by the KOPIA in the 23 countries is estimated to total US$99 million, accounting for 1.7 times its total budget of US$58.9 million, and the value-added inducement effect (VIE) in the 13 countries is estimated to total US$23.9 million. More importantly, the PIE and VIE continue to be higher in some countries, and the annual VIE tends to increase in most of the countries. These findings imply that the research-led KOPIA has contributed to agricultural development and further economic growth through inter-industrial relations in the recipients.
Highlights
According to the most recent World Bank’s estimates [1], about ten percent of the world’s population of 7.4 billion as of 2015 lives on less than $1.9 per day and the majority of the global poor live in rural areas
Given the literature discussed above, this study aims to find empirical evidence of the beneficial effects, in terms of production and value-added inducement, that agricultural development assistance by the Korean Programs on International Agriculture (KOPIA) bring about in recipients’ economies
Other than 2015, the production inducement coefficient (PIC) for Myanmar continued to be estimated as the highest, over 3.0, during the period from 2009 to 2014, whereas the PIC for the Philippines was estimated to be the lowest at 1.125. This implies that developing countries with a higher PIC score—such as Vietnam, Myanmar, Sri Lanka, Thailand, and Paraguay—have well-structured industrial relations with the agricultural industry, and that research-led assistance to agriculture can eventually lead to industrial growth
Summary
According to the most recent World Bank’s estimates [1], about ten percent of the world’s population of 7.4 billion as of 2015 lives on less than $1.9 per day and the majority of the global poor live in rural areas. It is widely held that development in agriculture has a more positive effect on poverty reduction in developing countries than growth in the manufacturing and service sectors [7,8], and that agricultural income rests upon the growth of agricultural productivity [9]. Agricultural aid includes various forms, such as technological support for the improvement of agricultural productivity, institutional improvement to overhaul agricultural policies, the building of infrastructure, including irrigation and farmland arrangement, equipment supplies and storage for crop yields, and wide-scale rural infrastructure development. The World Development Report [14] puts a stress on technology in the development process, holding that technology increases productivity and creates new opportunities for jobs
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