(1) Position of the Philippines in Japan's ODA

Japan provides assistance to the Philippines, taking into account the following factors.

In order to support efforts for further economic and social reform, Japan announced ¥36.3 billion in co-financing with the Asian Development Bank as part of its October 1998 New Miyazawa Initiative and an aid package worth ¥186.5 billion in (including the 23rd Yen Loan to the Philippines) at the March 1999 Consultative Group Meeting for the Philippines in Tokyo. Japan also announced $1.6 billion in non-assistance capital financing through JEXIM.

The Philippines is the third largest recipient of bilateral aid from Japan (based on cumulative net disbursements up to 1998).

(2) Priority Areas for Japan's ODA

On the basis of studies and research concerning development conditions and tasks in the Philippines and its development plans, as well as policy dialogues between Japan and the Philippines, including the High-Level Mission on Economic and Technical Cooperation sent to the Philippines in March 1999, Japan has given priority to assistance in the following areas.

(3) Matters for Consideration

• Since the inauguration of the Estrada government, the move toward a free-market economy has continued, and priority has been placed on measures to support the socially vulnerable through agricultural development, the eradication of poverty and the correction of disparities.
• Consideration is to be given to the problem of decentralization of government (i.e., lack of experience and skills in this respect) and development of the southern Philippines, focused on the resource-abundant island of Mindanao, where there has been progress toward peace with Muslim forces active there.
• Efforts should be made to strengthen tie-ups with local NGOs in the area of capital and technical cooperation, as they are active in a wide variety of areas in the Philippines.
• Continuation of support for improvements in the economic infrastructure and the stabilization of the economy through the implementation of support measures in Asia.

(1) Major Economic Indicators

(2) Current Situation

The Philippine economy had been showing steady growth (with GDP growth from 1994-1997 in the 4-5% range), but a weakening of the peso in 1998 effected by the Asian economic crisis and damage to harvests from El Niño, among other problems, caused the domestic economy to slow. Applying structural reforms under IMF support in a relatively carefully manner, the lack of foreign currency inflows in comparison with neighboring countries and the relatively low ratio of short-term foreign debt served to reduce the effects of the economic crisis. However, the increasing influence of the lack of growth in the exports and direct foreign investment that had supported the Philippine economy, the increase in the inflation rate and the drop in harvests due to El Niño resulted in a GDP growth rate of -0.5% in 1998 (the lowest since 1991). In 1999, however, aggressive financing, the recovery of the agricultural sector, a firm market for exports and recovery in the investment market have served to improve the general situation, with the Philippine government estimating a GDP growth rate of 2.6-3.1%.

(3) Tasks to Be Addressed

• The Philippines needs to be developed in the light of the peace agreement with the anti-government MNLF and progress in the Mindanao peace process.
• Structural reform of the economy must be pursued through measures such as stabilizing budget expenditure and revenue, improving the current balance, resolving the problem of cumulative debts and deregulation; the promotion of trade investment and improving of the banking system must also be pursued.
• Economic infrastructure must be further improved as the base for economic improvement. Key supporting industries for high-tech industries, such as electronics, electrical equipment, and the automotive industry, must be developed.
• Steps must be taken to encourage implementation of agrarian reform, and to raise agricultural productivity.
• Corrective measures must be implemented to tackle poverty, income disparities, regional disparities and unemployment.

(1) Japanese Assistance

(2) Assistance from DAC Countries

(3) ODA from International Organizations

(1) Thailand's Position in Japan's ODA

Japan provides assistance to Thailand, taking into account the following factors.

In order to help Thailand overcome its currency crisis, Japan, on an extraordinary basis, provided yen loans, emergency aid in the form of support for Thai students in Japan and non-project grant aid with the purpose of assisting the socially disadvantaged, who were seriously affected by the crisis. Moreover, under the October 1998 New Miyazawa Initiative, Japan provided $250 million (¥30 billion) in yen loans for measures to help the socially disadvantaged and to encourage public enterprises that generate high levels of employment and $300 million in yen loans for the improvement of agricultural infrastructure. In addition to this assistance, Japan announced $1.35 billion in financing from the Japan Export Development Bank for cooperation in public financing.

Thailand is the fourth largest recipient of bilateral aid from Japan (based on cumulative net disbursements up to 1998).

(2) Priority Areas for Japan's ODA

Based on studies and research concerning development conditions and tasks in Thailand and its development plans, as well as policy dialogues between Japan and Thailand, including the High-Level Mission on Economic and Technical Cooperation sent to Thailand in January through February 1996 and subsequent policy dialogues, Japan has given priority to assistance in the following areas:

(3) Matters for Consideration

• Given Thailand's relatively high level of development, almost all general ODA grant aid to Thailand was discontinued as of FY1993 (with the exception of grant assistance for grassroots projects and cultural grant aid).
• Japan will support training of human resources needed to achieve sustainable economic growth, based on the proposal by then-Prime Minister Hashimoto at the Japan-ASEAN summit in December 1997 to start the Japan-ASEAN program for Comprehensive Human Resource Development.
• Although Thailand has recovered from its domestic financial crisis, the state of the economy remains severe. In light of this, there still remains a need for support from Asia for the implementation of economic structural reforms that will bring economic recovery to the country.

(1) Major Economic Indicators

(2) Current Situation

After the currency crisis of July 1997, confidence in the Thai economy was restored after the introduction of IMF structural adjustment measures. Thailand has pulled out of its currency crisis, with a surplus in its currency balance and a recovery in the value of the baht due to a lowering of interest rates by industrial nations in early 1998. In real terms, however, domestic demand remains low, export growth slow and liquidity insufficient. A dropping inflation rate, low interest rates and positive industrial indicators suggest that Thailand has seen the worst of the crisis pass. Whether the Thai economy will be able to get back on track will depend whether the country can stimulate domestic consumption, invest in plant and equipment, increase exports and dispose of bad credit. There is also concern that the long recession will exacerbate the unemployment rate and the social aspects of the effects of the economic crisis.

(3) Tasks to Be Addressed

• Macroeconomic stabilization, financial sector reforms, further privatization, resolution of bad loans
• Efforts must be made to foster human resources development (technical experts, skilled labor and government administrators) and small- and medium-sized industries and supporting industries.
• Measures must be enacted to control environmental pollution, including air pollution and water conservation, and to protect the natural environment.
• Economic infrastructure must be improved to provide a base for economic development.
• Steps must be taken to rectify regional imbalances.
• Relief for the socially vulnerable and job creation

(1) Japanese Assistance

(2) Assistance from DAC Countries

(3) ODA from International Organizations

(1) Viet Nam's Position in Japan's ODA

Japan provides assistance to Viet Nam, taking into account the following factors.

In order to support the continued economic growth of Viet Nam, Japan is providing yen loans and grant aid in FY1998. The amount of this support is the largest that Japan has ever provided to the country. Viet Nam is improving and currently the 13th largest recipient of bilateral aid from Japan (based on cumulative net disbursements up to 1998).

(2) Priority Areas for Japan's ODA

Based on studies and research concerning development conditions and tasks in Viet Nam, development plans and policy dialogues between the two countries, including the High-Level Mission on Economic and Technical Cooperation sent to Viet Nam in October 1994 and subsequent policy dialogues, Japan has given priority to assistance in the following areas.

(3) Matters for Consideration

• Bearing in mind the need to accelerate Viet Nam's economic reforms, further improvement in implementation of and procedures for ODA is necessary on the Vietnamese side.
• Bearing in mind the development of Indochina as a whole and taking a broad geographical approach, there is need to provide effective assistance that organically supports cooperation in various forms.
• While cooperating in the building of infrastructure and other material aspects of assistance, Japan will implement assistance in less tangible areas such as the formulation of key policies (juridical structures) and apply the results of Japanese-Vietnamese research based on the comprehensive policy making (macroeconomic management) undertaken between 1995 and 1998.
• In connection with the New Miyazawa Initiative, Viet Nam is working toward effecting policies for the development and implementation of programs for private-sector development, the inspection of large-scale public enterprises and the removal of non-tariff barriers.
• Cooperation for human resources development in Viet Nam is progressing under the Japan-ASEAN Program for Comprehensive Human Resource Development proposed by then-Prime Minister Hashimoto at the Japan-ASEAN summit in 1997 and through the reforms announced at that same summit by Vietnamese Prime Minister Khai. Additionally, the establishment of the Japan-Viet Nam Center for Human Resources Development has also served to promote human resources development in the country.
• The correction of regional and class differences that come with the progress of economic reform.

(1) Major Economic Indicators

(2) Current Situation

Since 1986, when Viet Nam began moving towards the implementation of a market economy under the Doi Moi Policy, the country has managed a generally favorable macroeconomic performance (with a 1992-1996 GDP growth rate of 8.9%), although its overall economic performance standards remain low. The indirect effects of the Asian economic crisis and the country's chronic trade deficit, along with a stagnant export market for manufactured goods, a large drop in investment in private enterprises by foreign firms, a high unemployment rate and a rise in prices, have served to considerably slow economic growth. Meanwhile, structural problems with the financial system and public sector enterprises have also affected the rate of economic growth. Government leaders, in response to the dangers presented by these problems, are making efforts to deal with the present situation by working out concrete measures that encourage the inflow of foreign capital and promote exports.

(3) Tasks to Be Addressed

• Improving the socioeconomic and agricultural infrastructure
• Promoting institutional reform in the fiscal and monetary areas, reform of state-owned enterprises and private sector development
• Building a legal system oriented towards the market economy and promoting development of human resources
• Reducing the widening gap between the rich and poor (correcting disparities between urban areas and rural areas)
• Preventing various illicit practices

(1) Japanese Assistance

(2) Assistance from DAC Countries

(3) ODA from International Organizations