Chapter 2

Section 1

2. Support for Economic and Social Infrastructure

Japan believes that ensuring sustainable economic growth as well as social development is essential for achieving sustainable poverty reduction in developing countries. Japan, which achieved post-conflict reconstruction, had an era when expansion of industry through infrastructure building was the basis of nation building and the approach of recreating this experience in the Asian region was the starting point for Japan’s assistance. Based on these ideas, Japan has been placing importance on promotion of trade and investment through support for economic sectors such as development of economic foundations, development of legal systems, and human resources development, and on support for the economic growth of the recipient country by fostering the private sector and promoting technology transfer. Japan has been pursuing these policies to promote economic growth and also carrying out economic and social infrastructure development, taking into account policies that ensure that the benefits of economic growth would reach the poor regions and the poorest segments of society.

Support for economic and social infrastructure includes development of transportation, such as ports and roads, communications, energy, river and irrigation facilities, and urban and rural living environments. Support for energy is explained in Part III, and support for the development of rivers and irrigation is explained in the “Water and Sanitation” section of the Part III. The following explains transportation infrastructure, communications infrastructure, and development of the urban and rural living environments.

(1) Transportation Infrastructure

Transportation infrastructure includes many large-scale items such as roads, railways, ports, airports, etc. that can be expected to have long-term economic benefits, so Japan’s financial cooperation is mostly in the form of loan aid (Japan’s ODA loans). Disbursements in the transportation sector in fiscal year 2002 consisted of ¥123.7 billion in Japan’s ODA loans (45% of the total ODA loans by Japan) and approximately ¥27 billion in grant aid (26.9% of the total grant aid.)

The Kizuna Bridge (Cambodia)

For the Mekong Region Development already introduced in Part I, Japan is providing support for “the Project for Improvement of the National Road Route 9 (grant aid)” for Laos, and for a variety of infrastructure development (roads, bridges, ports, tunnels, etc.) for the “East-West Corridor” and the “Second East-West Corridor” across the Mekong region for the economic development of the Indo-China region. In this assistance, the related government ministries and agencies, such as MOFA and the Ministry of Land, Infrastructure and Transport, collaborate from the early stages of each project to carry out Project Formulation Studies, development studies, dispatch of experts, etc. and implement highly effective projects utilizing Japan’s experience and technology. The bridge across the Mekong river in Cambodia completed in 2002 using Japan’s assistance was given a Japanese name: the Kizuna Bridge and can be said to be not only the embodiment of the strengthening of economic partnership within the Mekong region but also a symbol of the deepening of friendly relations both within the Mekong region and between Japan and the Mekong region.

(2) Communications Infrastructure

Concerning communications infrastructure, Japan is providing assistance, etc. for the development of the foundations of communications, such as cable, wireless, satellite, etc., and development of facilities related to media such as telephones, radio, television, the Internet, etc. For example, Japan has decided to provide ODA loans for Viet Nam’s “North-South Submarine Fiber Optic Cable Link Project” which aims to improve the reliability of communications facilities and meet the increase in demand for communications by planning to construct approximately 2,000 kilometers of seabed fiber-optic cable and 11 landing stations between Haiphong and Soc Trang. Concerning grant aid, Japan has decided to provide financing for “the Project for Improvement of Shortwave Radio Broadcasting Network,” which has the objective of ensuring means to provide information in Mongolia, which has a huge national territory, and for “the Project for Improvement of Broadcasting Equipment for Television of the Republic of Indonesia (TVRI) Makassar Station,” which has the objective of integrating and modernizing Indonesia, a multiethnic state. The characteristic features of both these projects are that they have great public benefits and many people benefit from them.

Japan is also providing communications-related assistance utilizing cultural grant aid. For example, Japan is supporting the supply of TV programs to Television Malawi in Malawi, providing broadcast-related and editing equipment, etc. to television and radio stations. Japan is contributing to the dissemination of the culture of the recipient country and of Japan widely among the people, and providing other kinds of communications-related assistance.

Concerning IT-related assistance, refer for details.

(3) Development of the Urban and Rural Living Environments

Japan’s direct assistance for the development of the urban and rural living environments includes supports for development of educational and health facilities and equipment for stable and sanitary water supplies. In addition to development of economic infrastructure, assistance for the development of social infrastructure improves the social aspects of people’s lives and contributes to the reduction of disparities within developing countries, so it plays an important role in achieving sustainable economic growth in developing countries, as well as the development of economic infrastructure. The status of implementation of social infrastructure development is described in Part III in the section entitled “Assistance for the Poverty Countermeasures and Social Development Sector.”

In the transportation infrastructure sector, Japan is not only providing assistance contributing to urban development, but is also providing assistance that contributes to rural development, such as development of roads and landslide control measures, etc. for poverty reduction and to reduce regional disparities, and is implementing projects that spread the benefit of assistance to poor regions and the poor segment of society. For instance, Japan is providing support for the “Small-Scale Pro Poor Infrastructure Development Project” in Viet Nam, the “Provincial Road Improvement Project” in Sri Lanka and other projects with ODA loans. The first of these projects aims to improve access by the poor of basic infrastructure and to achieve poverty reduction in the regional rural areas of Viet Nam by developing small-scale infrastructure in those areas. The second of these projects carries out repair of regional roads and bridges with the objectives of upgrading mobility in the Central and Sabaragamuwa Provinces by upgrading the cursoriality of vehicles, revitalizing regional economic activities, and promoting regionally harmonized development. Japan is also using grant aid to support, for example, the “Le Projet de Developpement d’un Village de pêche à Sidi Hsaine” in Morocco and carrying out cooperation, including development of fishing port facilities.

Lima-Callao Metropolitan Area Water and Sewerage Improvement Project (Photo: Japan Bank for International Cooperation (JBIC))

(4) “Soft” Assistance Related to Infrastructure Development

The above mainly explained economic and social infrastructure development through financial cooperation. In order to develop this infrastructure based on an appropriate development policy in developing countries and to appropriately manage and operate it, it is indispensable to develop human resources. A wide range of assistance through technical cooperation is being carried out, including formulation of urban planning and national land planning, training of technicians to operate and manage the infrastructure facilities that have been built, provision of the equipment necessary for management and operation, and development studies.

In order to facilitate the economic activities of developing countries, facilitation of traffic—the flow of people and goods—through transportation infrastructure assistance and intellectual assistance, such as institution and rule building for the development of the trade and investment environment are important. As assistance for trade and investment-related institution development, Japan has been providing “soft” assistance mainly to the Asian region through the Japan External Trade Organization (JETRO), Association for Overseas Technical Scholarship (AOTS), etc. The assistance includes the development of standards and certification systems needed to disseminate intellectual property rights institutions and promote industrial competitiveness, and human resources development designed to improve efficiency of distribution systems. Specifically, concerning the development of intellectual property rights institutions, Japan has provided assistance to increase the efficiency of office processing at the Viet Nam and Malaysia intellectual property rights agencies and to strengthen the functions of private intellectual property promotion organizations in Thailand. Concerning assistance for standards and certification systems, Japan has provided assistance for the dispatch of experts and for the acceptance of trainees in the various sectors of standardization, standardized evaluation and standardized measures based on the “Association of Southeast Asian Nations (ASEAN) Standardization and Certification Cooperation Program.” Concerning the efficiency of distribution, Japan has also provided assistance for training in logistics7, unit load8, etc. and for the dispatch of experts in distribution to private organizations in Thailand and Viet Nam. Provided together with infrastructure assistance, this kind of assistance through trade-related technical cooperation contributes to the development of the trade and investment environment in the developing countries eventually leading to the promotion of economic activity between Japan and developing countries.

7. Development of comprehensive mechanisms for more efficient distribution. Includes production management, information management, etc.
8. Cargo gathered as a unit on one pallet or in one container for the sake of mechanization, labor-saving, speed, prevention of damage to the goods, etc.

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