A Study on Multilateral Development Bank Projects: Focusing on Promoting Overseas Construction of Korean Businesses

1. Background

ㆍInternational construction projects financed by multilateral development banks (MDBs) have increased while participation of Korean businesses in these projects is still low.

- Total lending of the World Bank increased to $14 billion in 2012 from $12 billion in 2008, while the share of Korean businesses recorded only about $300 million.

- Bidding for an MDB project not only means a business opportunity but also acquisition of information on the development needs in developing countries. 

ㆍA need for a practical framework and support measures is high to improve participation of Korean businesses in the construction projects funded by MDBs. 

2. Purpose

ㆍTo have a comprehensive and objective research on construction projects funded by MDBs including sectoral, regional analysis, project forecasts and procurement system and conditions

ㆍTo identify projects in demand and the procurement requirements 

ㆍTo provide policy recommendation to enhance participation in the construction projects by MDBs

ㆍTo provide R&D strategies for Korean businesses and help them develop their capacity for MDB procurement

3. Project Description

ㆍAn analysis on MDB-financed procurement and challenges for Korean businesses to participate in the procurement explaining:

- financing of MDB construction projects and reasons to participate in these 

- requirements and capacity of Korean businesses and R&D directions in Korea for overseas construction market

ㆍAn analysis on construction projects financed by MDBs such as the World Bank, Asia Development Bank, Inter-American Development Banks

ㆍPolicy recommendations with specific support measures including:

- solutions to improve participation of Korean businesses

- differentiated approaches for different procurement systems of MDBs

- recommendations on strategies and support measures for businesses and the government

4. Impacts and Benefits

ㆍThis study provided forecasts of construction projects funded by MDBs and systematic mechanisms of MDB procurement procedure

ㆍPolicy solutions proposed in this study will enhance the expertise and performance for MDB project bidding.

ㆍR&D strategies have been specified in two categories: project development and technical assistance. 

ㆍThe strategies proposed in this study, which are different from those of global corporations will be able to encourage bidding of Korean businesses in MDB procurements.