Japan's ODA: Accomplishment and Progress of 50 Years | Ministry of Foreign Affairs of Japan

Official Development Assistance (ODA)

50 Years of Japan's ODA
1954-1976
System Development Period
Japan started technical cooperation in 1954, when it joined the Colombo Plan. From 1954 to 1976 the government of Japan actively developed its own aid implementation systems.

1954-1976
Joining the Colombo Plan
Hayato Ikeda, Minister of State at the time, leaving for the session of the Colombo Plan as a representative of Japan in 1958, with Eisaku Sato, Minister of Finance at the time.
Hayato Ikeda, Minister of State at the time, leaving for the session of the Colombo Plan as a representative of Japan in 1958, with Eisaku Sato, Minister of Finance at the time.
On October 6, 1954, the Cabinet approved a resolution for Japan to join the Colombo Plan for Cooperative Economic and Social Development in Asia and the Pacific. Later that month, having secured the mediation of the United States, which wished to see Japan reintegrated into the international community, Japan participated as an official member at the 6th Consultative Committee Meeting of the Colombo Plan. From the year after joining, Japan began to provide government-based technical cooperation programs in the form of trainees and dispatching experts.

Economic cooperation provided in tandem with postwar reparations
The launch of government-based financial cooperation, however, can be traced to October 1954 and the signing of the Japan-Burma Peace Treaty and Agreement on Reparations and Economic Cooperation. After that, a succession of reparations treaties was signed-with the Philippines, Indonesia, and the Republic of Vietnam (South Vietnam). Other than these, though not reparations in the strict sense, grant aid etc. (known as "quasi-reparations") has been provided to Cambodia, Laos, Thailand, Malaysia, Singapore, Korea, and Micronesia.

    The historical background of Japan's financial assistance-starting as providing reparations and economic cooperation in tandem therewith to Asian countries-combined with the basic policy of placing emphasis on providing cooperation for Asian countries that have close links with Japan, became the model for the subsequent Asia focus of Japan's ODA.

Local people waiting at a Japan medical center in Cambodia, built as part of the country's 'compensation' for wartime damage.
Local people waiting at a Japan medical center in Cambodia, built as part of the country's "compensation" for wartime damage.

Commencement of yen loans
The Suez Canal is made wider and deeper with the help of a series of Japanese yen loans, thus making it possible for large ships to pass through the canal. This is the opening ceremony of the 'new' Suez Canal in 1980.
The Suez Canal is made wider and deeper with the help of a series of Japanese yen loans, thus making it possible for large ships to pass through the canal. This is the opening ceremony of the "new" Suez Canal in 1980.
In 1958, Japan extended to the first yen loan, to India, thus commencing full-fledged economic cooperation. This was conducted independently of the issue of atoning for the war through reparations, and had a groundbreaking significance in the sense that it was the start of financial cooperation with concessional conditions.

    Japan's reparations and extension of yen loans in the 1950s and 1960s had the objectives of expanding export markets for Japan and securing imports of important raw materials, and there were high expectations of a beneficial effect from these actions for the Japanese economy. This stance was also reflected in the tied aid rate, which was almost 100% until the end of the 1960s.

Development of aid implementation systems
Japanese experts dispatched from Japan Asian Association working in Ceylon (now Sri Lanka).
Japanese experts dispatched from Japan Asian Association working in Ceylon (now Sri Lanka).
Japan's aid implementation systems were gradually developed in line with the start of such provision of reparations and aid. First, the Society for Economic Cooperation in Asia was established in 1954 as the implementation agency for technical cooperation. And the Overseas Economic Cooperation Fund (OECF) was established in March 1961 as the implementation agency for yen loans. Overseas Technical Cooperation Agency (OTCA) was founded in 1962, and in 1974, OTCA became Japan International Cooperation Agency (JICA).

    Japan actively participated in the activities of international organizations as a donor country. In March 1960, Japan Joined the Development Assistance Group (DAG), and in 1961, when DAG was reorganized and became the Development Assistance Committee of the Organization of Economic Co-operation and Development (OECD-DAC), Japan joined as one of the founding member countries. Also, the Ministerial Conference for the Development of Southeast Asia, which was advocated by Japan, was held in 1966. Furthermore, Japan played a key role in the establishment of the Asian Development Bank (ADB).


Institutional Change of Implementing Agencies

Institutional Change of Implementing Agencies

Improving Japan's international position and strengthening its aid implementation system
In 1966, the first 12 members of JOCV boarded a plane to Manila, the Philippines at Haneda Airport, Tokyo, Japan.
In 1966, the first 12 members of JOCV boarded a plane to Manila, the Philippines at Haneda Airport, Tokyo, Japan.
From the late 1960s to the 1970s Japan gained a better reputation in the global arena as the country achieved dramatic economic development. Departing from war reparations, Japan's aid was increasing and its aid implementation systems were becoming more varied. A total of US$115.8 million in 1964 grew to US$1.1049 billion in 1976. In other words, Japan's ODA became 10 times larger during this period.

    As for aid systems, a food aid program started in 1968 and a grant aid program in 1969. The yen loan programs also introduced new kinds of loans, such as a two-step loan and a loan-in-kind. In 1965, Japan Overseas Cooperation Volunteers (JOCV) was established.


Note:
A two-step loan is designed to provide financial assistance for small- and medium-sized companies and farmers as well as agricultural cooperatives. The loans are given through the recipient countries' development banking organizations.

A loan-in-kind is designed to provide financial assistance to import commercial goods based on an agreement between Japan and its partner country, and are used to support the partner country's trade balance and/or stabilize its local economy.

Breakaway from export-oriented ODA
Trend of 'tied' yen loan rate
Trend of 'tied' yen loan rate
Japan enjoyed a high economic growth period in the 1960s, thus discouraging Japan's ODA to be optimized for helping promote the country's export industries. In 1972, the introduction of "untied" yen loans was approved at a cabinet meeting, and many yen loans have been provided "untied" since 1980, maintaining a more than an average "untied" loan rate among DAC member countries.


To the previous page

To the next page
    Contents
[Japan's ODA: Accomplishment of 50 Years]
Japan's ODA Contributing to World Development...4
East Asia's Economic Development and Japan's ODA...5
Japan's Contribution in Human Resource Development...6
[Progress of 50 Years of ODA]
System Development Period (1954-1976)...8
Systematic Expansion Period (1977-1991)...10
Policy and Philosophy Enhancement Period (1992-2002)...12
(Original ODA Charter Period)
Meeting the Challenges of a New Era (2003-Present)...14
(Revised ODA Charter)