The medium-term policy provides a systematic and concrete ODA approach for the next five years, and lays the groundwork for the country assistance programs for each main recipient country which will be created and announced this year. Such systematic implementation in line with the ODA Charter²⁰ (approved by the cabinet in June 1992) should boost aid effectiveness and efficiency, as well as clarifying at home and abroad the basic approach and specific mechanisms of Japan's ODA.

Japan's straitened economic circumstances have increased the urgency of improving ODA quality; accordingly, no numerical targets have been given in the medium-term policy.²¹

In the process of formulating the medium-term policy, full attention was given to the views expressed by the Council on External Economic Cooperation, a consultative body to the prime minister, as well as views and recommendations on ODA reform put forward by the various sectors of society and Diet debate. The government also worked to incorporate public opinion to the greatest possible extent, engaging, for example, in exchanges of views with NGO representatives.

Section 1 Basic Approach

The medium-term ODA policy comprises an introduction and five key sections (see the outline in Chart 6, or the full text in Reference, Chapter 5).

The introduction overviews the current situation in those developing countries needing support from the international community, and also looks at global issues. In terms of the significance of Japan's aid program, it articulates the fundamental position that the provision of ODA (i) is an obligation that Japan must satisfy as the world's second-largest economy and the world's largest ODA donor, (ii) bolsters Japan's standing and credibility in the eyes of the international community, and (iii) contributes to promoting the national interest of Japan, which depends on world peace and stability, particularly given Japan's dependence on imports of resources, energy, food, and other basic materials.

The introduction is followed by an explanation of the necessity of gaining the understanding and support of the Japanese public if Japan is to continue providing effective ODA despite its current fiscal strains. To obtain improved public understanding and support, the medium-term policy declares it necessary that the government (i) pursue and implement aid projects in more appropriate, efficient, and effective manner, (ii) honor its obligations of accountability to the National Diet and the public at large, and (iii) coordinate ODA more closely with Japanese foreign policies and other policies pertaining to the national interest.

In Section I, "Basic Approaches," the following six key points are presented.

First, attention is devoted to the ideas and viewpoints contained in the Development Partnership Strategy that was put forward in 1996 by the Development Assistance Committee (DAC), a group set up among the industrialized countries forming the Organization for Economic Cooperation and Development (OECD). The new strategy states that the ultimate goal of development is to improve the well-being of people and formulates specific goals for social development,²² placing even greater emphasis on poverty alleviation and social development.

Second, emphasis is placed on the importance of promoting "ownership" in developing countries and "partnerships" with aid donors. Specifically, a commitment is made to the formation of aid frameworks and measures to strengthen coordination between donor countries and international organizations, conditioned on the self-help efforts and initiatives of the recipient countries.

Third, the policy calls for aid tailored to the needs and circumstances of each country, as determined through policy dialogues and preliminary development surveys. This will naturally demand that Japan actively pursue dialogues with each recipient. If Japan simply continues down familiar roads and fails to respond to changes in the circumstances of recipient countries, precious aid resources could be wasted. Attention must be paid to ensure that vested interests do not emerge in aid-receiving sectors and recipient countries. Aid schemes, such as ODA loans, should be reviewed, where appropriate, in light of changing conditions.

Fourth, it is noted that the advancement of developing countries will require-in addition to recipient efforts in self-help-shared roles and available resource coordination by all active agents in the development process, including the donor countries, international organizations, the private sector, and NGOs. In particular, given the growing role of the private sector through, for example, trade and investment, the tasks envisaged for ODA are improvement of the environment for private-sector activities and the inflow of private funds, and the provision of assistance to sectors not benefiting from private flows.

Fifth, emphasis is placed on "human-centered development" which is indispensable to the realization of sustainable development, and attention is given to "Human Security"²³; namely, the protection of individuals from environmental deterioration, drug abuse, organized crime, infectious diseases, human rights infringements, regional conflict, antipersonnel mines, and various other threats.

Sixth, to foster heightened public understanding and support, efforts will be made to actively pursue national involvement in Japanese aid and greater visibility²⁴ as well as a better awareness and understanding of Japan's assistance programs in recipient countries.

Although some recipient countries seem to have come to regard Japan's aid as a matter of course, in the great majority of cases, Japanese assistance is frequently reported by the local media and is much appreciated. In particular, during the Asian economic crisis, Japan provided an unparalleled level of assistance to the East Asian countries with which it has such close ties, and this sparked renewed awareness of the significance of Japanese aid. Naturally, Japan will also seek to increase awareness and understanding in recipient countries by developing dialogue with their governments and enhancing public relations activities.

To promote national involvement in and visibility of Japanese aid, it will be essential to involve Japanese companies and their outstanding technology in ODA programs. With the untying of yen loans,²⁵ orders received by Japanese companies as a ratio of total yen loans-local and foreign currency included-have hovered at around 30 percent for the last five years. However, as developing countries are also keen to utilize limited assistance funds as effectively as possible, Japan should maintain its basic policy on general untied loans but also develop tied aid²⁶ within the limits of international rules to make use of the special technology and management know-how of Japanese companies. Areas to which this strategy should be applied include human resources development and those environment-related projects where preferential conditions have been granted on special yen loans facilities²⁷ toward economic structural reform. It will also be imperative to actively enlist the experience of experts from universities, think tanks, local governments, and the private corporate sector. Japan has already hammered out policies for even stronger dialogue and collaboration with the many NGOs deeply involved in the development arena.

In Section II, "Priority Issues and Sectors," and Section III, "Priority Issues and Sectors by Region," tangible perspectives, viewpoints, and strategies for aid are discussed with respect to seven issues and sectors and eight regions.²⁸ It is noted that Japan will place greater emphasis on poverty alleviation programs, certain aspects of social development, human resources development, policy-related assistance, and other "software" aspects of cooperation while striving for balance with assistance in the arenas of economic and social infrastructure development. In the meantime, Japan will also continue to actively tackle various global issues. On the regional orientation of aid, The medium-term policy points out that Japan will maintain its priority on Asia as a region with which it has developed deep ties geographically, historically, and in various other dimensions.

Section IV, "Methods of Aid," underlines the necessity of action on four fronts if Japan is to implement ODA on efficiently and effectively : (i) a MoFA-led drive to strengthen coordination between government offices and agencies for the implementation of aid, (ii) active enlisting of the knowledge and experience of the private sector, NGOs, and local governments, (iii) heightened coordination and collaboration with other donor countries and international organizations, and (iv) greater assistance toward the expansion of the South-South cooperation provided by those developing countries (particularly emerging donors) which have launched assistance to other developing countries.

Section V, "Points to Be Followed in the Implementation and Management of ODA," identifies the following points as requiring due attention in implementing ODA: (i) greater understanding of the conditions in individual developing countries and the formulation of country assistance programs that give concrete form to current policies on country assistance²⁹, and (ii) reinforcement of preliminary studies, environmental considerations, monitoring of implementation, and ex-post evaluation. The medium-term policy concludes with discussion of (iii) human resources for development cooperation; (iv) promotion of public understanding and participation; and (v) promotion of information disclosure. Steps are also called for to boost the participation of volunteers from different age groups-ranging from youth to senior people-in ODA implementation, as well as to provide more information pertaining to project tender processes and individual projects.

Section 2 Implementation of the Medium-Term Policy

It will be important to press steadily ahead with the implementation of medium-term ODA policy measures. As noted above, country assistance programs will be developed and announced for around 10 countries.

Mechanisms are already in place for some of the measures identified in the medium-term policy, and these should be further reinforced. To take the example of the active promotion of student intakes, which falls within the priority issue of human resources development, grant cooperation and JICA assistance for foreign students³⁰ have been added to loans for East Asian foreign students, government exchange programs and other such existing assistance. There are also many other issues waiting in the wings. To use Japanese human resources to promote aid with greater visibility, for example, Senior Volunteer dispatches should be substantially expanded and support for NGO disaster relief activities beefed up. More effort must also be put into developing skilled human resources of an international standard in the area of development assistance through links with institutes such as policy research graduate schools and the Foundation for Advanced Studies on International Development (FASID).³¹ With the understanding and support of the Japanese people, the government will now shift into practice the approaches contained in the medium-term policy, starting with the most feasible.

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