The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Lee Duk-hoon, “Korea Eximbank”) announced on May 11 that the Bank signed a Memorandum of Understanding (MOU) with International Fund for Agricultural Development*(President Kanayo F. Nwanze, "IFAD") regarding financial cooperation on agricultural development in developing countries.

* IFAD is a United Nations agency specializing in rural development, providing long-term concessional loans and subsidies to its developing Member States to finance the development of rural infrastructure; improvement of agricultural produce storage, processing, and distribution systems; and development of the livestock and fishery industries. Founded in 1977, IFAD has a total membership of 172 countries across the world.

Korea Eximbank Senior Executive Director Shim Seop met with IFAD Vice President Michel Mordasini at IFAD's headquarters in Rome on May 9, and signed the above MOU.

The two institutions have thereby agreed to cooperate by sharing each other’s knowledge and experience in the field of rural development and by identifying suitable projects to be co-financed between them.

Of particular significance is the fact that IFAD, the leading multilateral financial institution in the field of rural development, agreed to jointly implement the integrated agricultural and rural development model established by EDCF*.

* The Economic Development Cooperation Fund (EDCF) was established by the Korean government in 1987 to promote economic exchanges with the developing world and to assist developing countries in achieving industrialization and economic stability through the provision of long-term, low-interest credit. Korea Eximbank currently manages the fund as its trustee.

EDCF's integrated agricultural and rural development model is an approach to rural development designed to achieve tangible results in a short period of time by simultaneously building the entire range of infrastructure* necessary for agricultural production, harvesting, and sales in the target area.

In implementing this model, EDCF intends to apply the methods of the Saemaul Movement, the driving force behind Korea’s rural development, in order to promote self-sufficient and sustainable growth** in developing countries led by local residents.

* Agricultural education centers, irrigation facilities, rural roads and bridges, rice processing complexes (RPCs), produce markets, etc.

** This would be made possible by introducing an incentive system so that the rural population may actively participate and compete in development projects, and by setting aside part of the increased rural income to pay into a rural development fund or to repay concessional loans.

At the "Asia Learning Series" Forum examining Korea's development lessons, an event hosted by IFAD on the same day as the signing ceremony, Senior Executive Director Shim remarked, "IFAD's participation in EDCF’s integrated agricultural and rural development projects will mark a significant turning point in spreading the model of the Saemaul Movement to other developing economies."