Japan's ODA in 1996 was reduced substantially (by 35%) from the previous year; for the first time since 1990, it dipped below 10 billion dollars to 9.44 billion dollars (excluding aid to Eastern Europe). This was due to three factors:

(1) The weaker yen reduced the dollar-denominated value (the yen-dollar exchange rate was 94.07 yen to $1.00 in 1995, but 108.82 yen to $1.00 in 1996);

(2) Subscriptions and contributions to international development financial institutions were at a low point between replenishment cycles in 1996 and dropped considerably from the previous year (by 65.0% on a yen-denominated basis);

(3) More funds were repaid on the past loan assistance than in previous years (33.7% more than in the previous year), reducing the net yen loan balance by 22.2% (on a yen basis) from the level of the previous year.

Especially for the reasons described in (2) and (3) above, there was a major reduction (24.6%) in the yen-denominated total, not just in the dollar-denominated total. Japan has retained its position as the world's No.1 donor of ODA for six years in a row, but its lead over No.2 donor, the United States, has narrowed.

Chart 1 Trends in Major DAC Countries' ODA (Net Disbursement Basis)