After the end of the cold war, outlook for world peace and shared prosperity still remains murky. The world has to contend with a number of serious international problems, such as frequent eruption of regional conflicts, unabating poverty in developing countries, political and economic problems standing in the way of democratization and the introduction of market economy in former socialist countries, and the growing seriousness of global issues such as worsening environment, exploding population and the rampancy of AIDS, etc. Under such circumstances, one of the potent tools Japan can employ in making positive contribution to world peace and prosperity in the remaining years to the 21st century is official development assistance. Japan has become the largest donor country in the world. However, we should not rest on our laurels. It is incumbent on Japan to play the leadership role in providing official development assistance to needy countries not only in terms of quantity and quality of aid but also in terms of the relevance and efficiency of aid policy planning, and grapple with the problems plaguing developing countries in close partnership with recipient countries.