Chapter 3

3. Japan’s Medium-Term Policy on Official Development Assistance (ODA)

August 10, 1999

Introduction

Humankind has achieved an unprecedented level of development during the second half of the 20^th century. In developing countries, average life expectancy has increased by more than 20 years, while adult literacy rates, which in the 1950s stood below 50%, rose to about two-thirds. However, some 1.3 billion people continue to live in extreme poverty, 1.1 billion people do not have access to safe and clean water, and more than 800 million people are suffering the effects of malnutrition and starvation. Clearly much remains to be done. Many countries have taken large strides toward democratization and the implementation of market-oriented economic systems since the end of the Cold War. Yet during the same period, in some regions of the world, conflicts and domestic confrontations have taken on a greater intensity, often instigated by conditions of poverty and lack of development.

With dramatic advances in information technology and economic liberalization, important improvements in economic efficiency have been attained, together with a rapid growth in international interdependence. However, this wave of globalization has left many countries behind, exacerbating the gap between the rich and the poor. The Asian economic crisis of 1997 unveiled the structural vulnerability of developing economies and underlined the need for new assistance. Furthermore, the Asian economic crisis served to spotlight the close and inseparable economic ties between Japan and the East Asian region (including Southeast Asia). As such, Japanese assistance for structural reform, economic rehabilitation, and social stabilization in East Asian countries constitutes an extremely important and direct link to the prosperity of Japan and is also an important factor in the formulation of Japan’s economic policies.

Global warming and other environmental problems could potentially have a negative impact, not only on individual countries but on the Earth in its entirety. Indeed, there are numerous problems that demand a concerted effort on the part of the international community, including the problems of population growth, AIDS, food, energy resources, and drug abuse. These are problems that are intricately linked to the developing world.

With the approach of the 21^st century, the industrial countries of the world face the common challenge of supporting developing countries to achieve sustainable and environmentally sound development. As the world’s second largest economy and the largest donor of official development assistance (ODA), Japan shoulders the important responsibility of contributing to sustainable social and economic development in developing countries. This is a role through which Japan can win the confidence and appreciation of the international community. Furthermore, as a nation whose prosperity is closely linked to world peace and stability and that is highly dependent on the importation of resources, energy, food, and other basic materials, ODA plays a very significant role in ensuring Japan’s own stability and prosperity. As such, economic assistance promotes Japan’s best interests, including the maintenance of peace.

Japan is experiencing fiscal and economic difficulties and there have been major changes in the domestic and international environment for aid. It is necessary to further consider, in a more integrated manner, how to implement ODA in light of these factors. Under such circumstances, it is important to earn public understanding and support for the ODA program in order to continue to respond to the high expectations of the international community. To achieve this understanding and support, assistance must be adequately implemented in accordance with the basic philosophy and principles spelled out in the Official Development Assistance Charter (ODA Charter)^*1 and efforts must be continued to improve the effectiveness and efficiency of aid programs. Moreover, proper accountability must be established vis-à-vis the Diet and the general public, and Japan’s ODA program must be coordinated with its foreign policies and with other important policies pertaining to the national interest.

While Japan’s ODA program has generally received high marks, it is a fact that the original objectives of ODA projects are not always met and that certain improvements are necessary. This is attributable, in part, to the inherent difficulty of undertaking ODA while working jointly with countries with vastly differing histories, cultures, customs, laws, and linguistic backgrounds.

In view of the above, the Government of Japan herein sets down its basic approaches in regard to ODA, and identifies overall priority issues and sectors as well as those by region. Undertaken with a five-year time frame in mind, this medium-term policy will be subject to review and modification in response to changing domestic and international conditions.

I. Basic Approaches

1. In 1996, the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development issued its “Development Partnership Strategy” in “Shaping the 21^st Century: The Contribution of Development Cooperation.” The guidelines for future development cooperation were based on the analysis of 50 years of development cooperation by industrial countries and on the role of assistance in the international community. This document identifies the improvement of living standards as the main objective of development cooperation and formulates specific goals for social development, such as halving the proportion of impoverished populations by the year 2015.^*2 Japan played a leading role in the preparation of the Development Partnership Strategy and continues its efforts to set such an approach in motion in the international community. As a result, the Development Partnership Strategy is now becoming a common guideline for development cooperation with developing countries. Japan will continue to manage its ODA in a manner consistent with its ODA Charter and with an eye to the goals of the Development Partnership Strategy.

2. The key to realizing the goals of the Development Partnership Strategy lies in the self-help efforts and the initiatives of developing countries as they work toward economic take-off. Japan will emphasize “good governance” through the improvement of the policy management capabilities of developing countries and will work to support their initiatives in this area. Japan will also encourage developing countries to ensure proper implementation and transparency in aid projects. On the premise of such self-help efforts and initiatives, Japan will endeavor to develop partnerships through cooperation and coordination with other donor countries and international organizations.

3. The provision of aid must be based on the proper evaluation of the development agendas and the needs and wishes of individual countries. Various forms of aid must be effectively combined to ensure a proper match to the developmental stage of the recipient country. Likewise, it is necessary to undertake policy dialogues with developing countries and utilize prior studies to design effective and efficient aid projects that conform to national conditions and needs. Special attention must be paid to ensure that vested interests do not emerge in aid-receiving sectors and recipient countries. Whenever necessary, Japan will review its aid schemes, such as ODA loans, in light of changing conditions.

4. A comprehensive approach is needed to enhance the impact of aid. Specifically, the available resources of pertinent entities such as developing countries, donor countries, international organizations, the private sector, and non-governmental organizations (NGOs) must be appropriately utilized. Similarly, cooperation and an appropriate division of roles and responsibilities among these entities must be established. In view of the growing importance of trade and investment and other private-sector activities observed in Asia, Latin America, and elsewhere, efforts must be made to improve the environment for private-sector activities and the inflow of private funds. In this respect, special attention should be paid to equitable and efficient resource allocation, the amelioration of disparities, and the provision of assistance to sectors not benefiting from private flows.

5. Economic growth is a necessary measure for the improvement of welfare, and “human-centered development” is indispensable to the realization of sustainable development. Consequently, Japan will provide assistance for balanced economic growth and social development. Based on this human-centered approach, special attention will be given to the needs of the least developed countries (LLDC).^*3 Due attention will also be focused on “human security” and the protection of individuals and communities from various dangers and threats, including environmental destruction, starvation, drug abuse, organized crime, infectious diseases, human rights infringements, regional conflicts, and anti-personnel mines.

6. The provision of ODA must be based on the understanding and support of taxpayers and the general public. For this purpose, Japan will actively endeavor to increase national involvement in and visibility of Japanese aid and promote better awareness of Japan’s assistance programs in recipient countries. Japan will also continue to contribute through multilateral agencies, which provide certain advantages not available through bilateral aid. Furthermore, efforts will also be made to further utilize Japan’s experiences, technology, and know-how, taking into consideration increased opportunities for Japanese businesses to participate in ODA projects and encouraging broad-based public participation in development cooperation through universities, think tanks, local governments, and NGOs. Through such efforts, Japan will maintain its vitality within the global community, continuing to enjoy harmonious development in the future and winning the confidence and appreciation of the international community.

II. Priority Issues and Sectors

In light of the basic approaches enunciated above, henceforth Japan will place greater emphasis on poverty alleviation programs and various aspects of social development, human resources development, policy-related assistance and other “soft” types of aid. This will be done while considering the balance with assistance aimed at economic and social infrastructure development. Japan will also continue to work actively on tackling global issues.

1. Support for Poverty Alleviation Programs and Social Development

The importance of combating poverty is fully reflected in the goals of DAC’s “Development Partnership Strategy.” This has also been confirmed in the so-called “20/20 Initiative” of the United Nation’s World Summit for Social Development of 1995, which calls on industrial countries to earmark at least 20% of their economic assistance, and developing countries at least 20% of their national budgets, to basic social needs.^*4 The “Initiative for a Caring World” proposed by Japan^*5 advocates the sharing of knowledge and experience to improve the welfare of people in developing countries.

The following factors are of special importance in the fight against poverty: equitable distribution of the benefits of economic development, implementation of economic cooperation projects directly aimed at assisting the poor, and the sharing of Japan’s own experiences of economic growth and poverty eradication with developing countries.

Assistance for basic education and health and medical services plays a critical role in poverty alleviation programs and social development projects. The perspective of “women in development” (WID) and gender issues is of similar importance for developing countries.^*6  As access to safe water constitutes a vital element in supporting human health, the scarcity of water resources could conceivably result in increased tensions in the future. For this reason, assistance for water resource development and the management and use of existing water resources has become increasingly important. To reduce regional disparities, assistance to rural and impoverished areas must be assigned greater importance. In many developing countries, large populations reside in rural areas. Thus, the elimination of poverty in such areas is of importance. The Asian currency and economic crisis has served to reiterate the importance of agriculture and of rural areas.

In light of the above, Japan will provide the following forms of support.

(1) Basic Education
Not only is access to education is a basic human right, it is a key factor in developing an effective response to the problems of poverty, population, and the environment in developing countries.

In the least-developed countries, as well as in many developing countries, access to elementary education is hampered by a lack of funds, educational facilities, teaching materials, and teachers. Consequently, nearly 860 million people throughout the world remain illiterate. The objectives of the Development Partnership Strategy include the promotion of elementary education and the elimination of gender disparities in elementary and secondary education. Japan’s assistance in the field of basic education has included the construction of school buildings^*7 and the provision of equipment and materials. For the elimination of gender disparities in Asia and Africa, Japan has been supporting the activities of the United Nations Children’s Fund (UNICEF) for the education of girls.^*8

In light of the above, Japan will provide the following forms of support.

(2) Health and Medical Care
Poverty and a lack of development directly affect people’s health in developing countries. Past development efforts have resulted in the improvement of health indicators in developing countries. For instance, Japan has actively contributed to the WHO program for eradicating polio from the West Pacific region. Thanks to such efforts, polio has almost vanished from the West Pacific region and has declined dramatically on a worldwide scale.^*9 However, nearly 12 million children under the age of five continue to die every year from preventable diseases. In order to respond to the many remaining challenges, it is essential that “primary health care” be made available to the greatest number of people possible. Humankind is also being threatened by emerging and re-emerging infectious diseases such as AIDS, tuberculosis, malaria, and various parasitic diseases. It is necessary for Japan to collaborate with WHO and with other donor countries and organizations in the fight against these epidemics.

The Development Partnership Strategy identifies as one of its goals the promotion of health care medical services for reproductive health, including the reduction of infant mortality and mortality rates in pregnancy and during delivery. In light of the above, Japan will provide the following forms of support.

(3) Women in Development (WID)/Gender in Developing Countries
Of the 1.3 billion people living in conditions of poverty throughout the world, 70% are women. Similarly, women are placed in disadvantageous positions in terms of education, employment, and health. Assistance for women is an important factor in achieving balanced and sustainable economic development in developing countries, as is the balanced participation of men and women in assistance projects and the distribution of the benefits derived from such projects. In 1995, Japan announced its “Initiative on WID” for assigning special importance to education, health, and the social and economic participation of women in the implementation of assistance projects.

In light of the above, Japan will provide the following forms of support.

2. Support for Economic and Social Infrastructure

The maintenance of sustainable economic development constitutes an essential requirement in promoting social development and poverty alleviation programs in developing countries and for working towards the achievement of the goals specified in the Development Partnership Strategy. Over the years, Japan has used its ODA loans to actively support the development of the social and economic infrastructures that underpin the process of economic growth. In this way, Japan has made a major contribution to building the foundation for economic development, particularly in the Asian region.^*10 It must be borne in mind that, while the development of social and economic infrastructure requires adequate volumes of medium- and long-term funds, only a limited group of developing countries are able to generate these funds domestically or to attract adequate private funds from overseas.

In light of the above, Japan will provide the following forms of support.

3. Human Resources Development and Intellectual Support

(1) Human Resources Development
The development of individuals is the base for the development of a country, and one of Japan’s basic aims in providing economic assistance is to support the self-help efforts of recipient countries. As such, Japan places particular emphasis on the continuing development of human resources needed for the social and economic development of developing countries.^*11

In light of the above, Japan will provide the following forms of support.

Japan will actively promote the acceptance of foreign students from developing countries and Japanese language training, both in developing countries and in Japan. Such initiatives will be pursued not only from the perspective of human resources development, but also in view of their significance in promoting mutual understanding between Japan and developing countries. Initiatives will also be pursued in terms of their strategic importance in directly benefiting Japan’s intellectual and advisory contributions to the international community. Japan will provide assistance while emphasizing the following points.

(2) Intellectual Support
The importance of intellectual support is growing, not only for economies in transition, but also for developing countries undergoing economic development against the background of rapid economic globalization. Such countries are in particular need of intellectual support that corresponds to ongoing changes in their economic and social systems. Much of the experience and know-how accumulated by Japan in the process of its own economic development can prove highly effective in supporting the progress of developing countries. Of particular importance is support pertaining to the formulation of various types of systems and policies, including the development of legal frameworks. Utilizing Japanese human resources through the dispatch of policy advisers and other experts is effective for this purpose. Against a background of growing international interdependence in the areas of trade and investment, support in respect of such advisory services will play an important role in supporting global economic systems such as the WTO-based multilateral trading system.

In light of the above, Japan will provide the following forms of support.

(3) Support for Democratization
Reinforcing the democratic foundations in developing countries will promote greater public participation in governance and development and the protection of human rights. As such, democratization is an extremely important factor in achieving medium- to long-term stability and development. Since the end of the Cold War, many countries have been endeavoring to introduce democratic institutions together with market principles. It is important to support these efforts and work toward the reinforcement of democracy.

Japan’s support for democratization includes such activities as the acceptance of trainees, the organization of seminars and the provision of personnel, and financial assistance for domestic elections in developing countries.^*13

In light of the above, Japan will provide the following forms of support.

4. Responding to Global Issues

(1) Environmental Conservation
Environmental problems such as global warming may threaten the very existence of mankind. In many developing countries, environmental problems are now jeopardizing the foundations of development. Environmental problems include serious environmental pollution as a result of the process of economic growth and rapid degradation of the natural environment as a result of population growth and poverty. These problems pose challenges that call for a global, coordinated response. DAC’s Development Partnership Strategy contains concrete goals for formulating national strategies for environmental conservation and reversing the depletion of environmental resources.

Global environmental problems have been assigned the highest priority in Japan’s diplomatic agenda.^*14 Through its own experiences, Japan has learned much about developing technologies for pollution control to achieve economic growth while preserving the environment. Both Japan’s experiences and technologies can play a significant role in promoting social and economic development and in achieving sustainable development in developing countries. Japan will support the environmental programs and efforts of developing countries and assist in the enhancement of their environmental capacities. Moreover, cooperation and collaboration with local governments and NGOs on issues regarding environmental conservation will be of vital importance.

In light of the above, Japan will provide the following forms of support.

(2) Population and AIDS
The continued growth of world population^*16 stands with the global environment, food, and energy as critical global-scale issues. Moreover, in many developing countries, population growth is directly linked to the problems of poverty, unemployment, starvation, lack of education, and deterioration of the environment. Similarly, the international spread of HIV/AIDS^*17 presents a serious obstacle to development in developing countries by severely undermining people’s health and their ability to work.

In response to these problems, Japan announced the launching of its “Global Issues Initiative on Population and AIDS” (GII)^*18 in 1994 and has been actively involved in these fields. Japan is also contributing to the international fight against AIDS, primarily through its support of the United Nations AIDS Program (UNAIDS).

In light of the above, Japan will provide the following forms of support.

(3) Food
Projections indicate that the rapid growth in world population and changing diets will result in a significant increase in food demand. Conversely, a slowdown in the growth of food production has been noted. The stability of food supplies is further complicated by such problems as continued soil degradation, limited water resources, climate change, and abnormal weather conditions.

Participants in the World Food Summit held in 1996 announced that they would cooperate in achieving global food security and halving the malnourished population of the world by 2015. In view of this goal, it is necessary for Japan to actively support developing countries in their efforts to increase food production. Furthermore, assistance for the agricultural sector, including assistance for food production and rural development, can play a crucial role in reducing poverty and achieving sustainable development.

In light of the above, Japan will provide the following forms of support.

(4) Energy
Global energy demand is projected to increase sharply as a result of economic development in Asia and other developing regions. As such, energy problems constitute a global-scale policy issue that is closely related to the response to global environmental problems and the achievement of sustainable development. Moreover, in many developing countries, securing access to adequate energy supplies constitutes a vital challenge in the realization of economic development. As Japan is heavily dependent on the importation of energy and mineral resources, the provision of assistance in these fields is important for Japan from the perspective of ensuring stable resource supplies.

In light of the above, Japan will provide the following forms of support.

(5) Drug Abuse
Both developed and developing countries face the issue of drug abuse. It is also essential to mount an internationally coordinated fight against drugs that includes the cooperation of pertinent international organizations. Drug abuse in developing countries is linked to the problem of poverty. As such, the fight against drugs must be pursued in combination with poverty alleviation measures. Based on this understanding, Japan has supported such activities as seminars on the prevention and control of drug abuse and drug-related crimes, the acceptance of overseas trainees, the promotion of substitute crops, and various related educational activities.

In light of the above, Japan will provide the following forms of support.

5. Support for Overcoming the Asian Currency and Economic Crisis and Promotion of Economic Structural Reform

In the course of the East Asian currency crisis that began in the summer of 1997, developing economies were seriously affected by the vast and rapid exit of private funds. The impact of this crisis extended to Japan and the remainder of the world’s economy. The emergency financial needs of Asian countries were met by the flow of official funds, including the facilities of the New Miyazawa Initiative (launched in October 1998), and the Asian economies are now stabilizing. In addition to these emergency measures, structural reform must be supported for sustaining recovery over the medium term in order to realize a strong recovery in real economic activities. Moreover, in view of the mutually important ties between Japan and this region, such assistance will serve to bolster the Japanese economy as well. Furthermore, encouraging the flow of private funds to these countries and supporting their economic recovery will also contribute to achievement of sound and sustainable global economic development.

In light of the above, Japan will provide the following forms of support.

6. Conflict, Disaster, and Development

(1) Conflict and Development
The end of the Cold War did not bring an end to the regional conflicts that continue to create serious human rights problems and wreak havoc on the environment, thereby eroding the gains of past development efforts. Conflict prevention, conflict resolution and post-conflict peacekeeping and reconstruction represent crucial challenges to the global community. For example, Japan has provided assistance to the Palestinian people in connection with the Middle Eastern peace process.^*20 Henceforth, Japan must play an active role in conflict prevention and post-conflict reconstruction.

In light of the above, Japan will provide the following forms of support.

Antipersonnel land mines placed in regions of conflict and left underground present a serious and indiscriminate threat to the general populace. They are a grave concern, not only because they have been causing indiscriminate and various casualties among civilians but they also present a serious barrier to post-conflict reconstruction and development, thereby preventing the resettlement of people and rural development, among other problems. In March 1997, Japan hosted the Tokyo Conference on Antipersonnel Land mines which resulted in the “Tokyo Guidelines,” including the ultimate goal of achieving “Zero Victims.” In December 1997, Japan proposed its “Zero Victim Program”^*22 for the clearance of antipersonnel land mines and the support of victims.

In light of the above, Japan will provide the following forms of support.

(2) Disaster Prevention and Post-Disaster Reconstruction
Natural disasters can destroy the livelihoods of people and most seriously affect impoverished persons, whose livelihoods are particularly vulnerable. Abnormal climatic conditions in recent years have increased the incidence of natural disasters throughout the world. Japan has dispatched 46 Japan Disaster Relief Teams to 23 countries to provide emergency disaster aid and to cope with disaster-related humanitarian problems.

In light of the above, Japan will provide the following forms of support.

7. Responding to Issues of Debt Relief

The economic development of the least developed countries of sub-Sahara Africa is seriously hampered by the problem of outstanding foreign debt, presenting a problem that cannot be ignored by the international community. Japan has provided active support for debt rescheduling and grant aid for debt relief.^*23

In light of the decision taken at the Köln Summit in June 1999^*24, Japan will cooperate with other donor countries and international organizations to provide assistance for the resolution of the debt problem so that heavily indebted poor countries (HIPCs) and other low-income countries may achieve long-term economic self-reliance.

In light of the above, Japan will provide the following forms of support.

III. Priority Issues and Sectors by Region

Japan has extended ODA to more than 150 countries and ranked as the top bilateral donor to 47 of these countries in 1996.^*25 Through ODA, Japan has made a major contribution to the development of numerous countries. For reasons of geographic proximity and historical and present ties, Japan’s ODA assistance has traditionally been focused on the Asian region and will remain focused on those countries with whom Japan maintains close relations. At the same time, given the global expansion of economic interdependence and the need to take concerted international action to cope with such global-scale challenges as humanitarian problems and the maintenance of international stability and prosperity, Japan will continue its extension of aid to regions outside Asia.

1. East Asia

East Asia is a region of special focus for Japanese ODA, with Japan accounting for nearly 60% of the total bilateral aid to this region provided by DAC member countries during the five-year period beginning in 1992. Over the years, Japanese ODA has made a major contribution to economic growth in this region through human resources development and social and economic infrastructure building. Similarly, Japan has contributed to alleviating the problems of poverty and environmental pollution through its assistance for social development and environmental conservation.

Japan enjoys close economic and other forms of ties with East Asia and will continue to provide appropriate forms of assistance in line with the highly diverse levels of income, progress made toward market economy, the social situation, and the natural environmental conditions found among these countries. Southeast Asian countries have enjoyed high rates of economic growth in recent years, and it is highly important for Japan to provide assistance that will help these countries overcome their current difficulties, achieve economic recovery and maintain political and social stability. It is necessary for Japan to provide assistance designed to alleviate poverty and to support continued economic growth and the transition to market economies in the low-income countries of Indochina, and Mongolia. China has a population of more than 1.2 billion and its development will have a major global impact. Therefore, it is important for Japan to support China’s Open and Reform Policy while encouraging it to become a more constructive partner in the international community. Japan’s assistance to China should also be focused on its efforts, such as the elimination of regional disparities and environmental problems. Recent developments in East Asia indicate a movement toward closer regional cooperation and a regional approach to development. Moreover, East Asia is witnessing the appearance of “emerging donors” who are starting their own programs for assistance to developing countries. It is necessary for Japan to provide appropriate forms of assistance to support and promote these positive developments.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

2. Southwest Asia

Southwest Asia is home to the largest population of impoverished people in the world.^*27 With the goals of the Development Partnership Strategy in mind, Japan will continue to focus on the region’s poverty problems, provide assistance designed to encourage economic liberalization in the countries of the region, and promote regional cooperation based on economic cooperation. Following underground nuclear testing by India and Pakistan in May 1998, Japan had no alternative but to fundamentally review its assistance policies toward both countries. In continuing to seek positive reactions from India and Pakistan in the area of nuclear non-proliferation, it is necessary for Japan to continue dialogue with both nations.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

3. Central Asia and the Caucasus

Since the collapse of the Soviet Union, the countries of this region have pursued democratization and the establishment of market economies. However, the region remains beset by political and economic instability caused by vulnerable economic structures, growing unemployment and social instability, ethnic conflicts, and territorial disputes. Japan has actively endeavored to assist this region and was successful in calling for the inclusion of these nations into DAC’s list of aid-receiving countries. In view of the geopolitical significance of this region and the importance of access to its energy resources, it is vital for Japan to continue to promote its “Silk Road diplomacy”^*28 and provide support for the achievement of stability in the region.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

4. The Middle East

As Japan’s principal source of petroleum imports, the Middle East is an extremely important factor in Japan’s economic stability. Furthermore, developments in the Middle East peace process and the situation regarding Iraq could have a major impact on world peace and stability. Japan continues to actively provide support for the social stabilization of this region and for the improvement of the environment for peace. Adequate access to water resources constitutes a critical factor in maintaining the region’s stability. While the countries of the Middle East, consisting of both oil-producing countries and less-developed countries, represent a diverse range of economic conditions, the training of domestic engineers and other human resources stands as a critical challenge in the strategies for economic diversification and development of non-petroleum sectors.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

5. Africa

Various favorable developments have been witnessed in Africa during recent years. These include moves toward democratization, greater stability in southern Africa, and a growing number of countries enjoying steady economic growth. However, numerous African countries continue to face serious problems that hamper their development. These include exclusion from the process of economic globalization, local conflicts, and the spread of AIDS. The majority of African countries are LLDCs, and many are heavily indebted poor countries. It is widely acknowledged that support for efforts toward the resolution of the problems of Africa calls for a concerted international effort.

Japan is committed to reinforcing this awareness and to working toward the establishment of international partnerships to support the self-help efforts of African nations. For this purpose, Japan, in collaboration with the United Nations and other organizations, hosted the Second Tokyo International Conference on African Development (TICAD II) in Tokyo in October 1998.

Based on the policies enunciated in the Development Partnership Strategy, TICAD II produced the “Tokyo Agenda for Action,” featuring a commitment to developing the self-reliance of African countries, strengthening cooperation and coordination with the industrial countries and international organizations, and promoting Asian-African cooperation. Henceforth, it is the responsibility of both African countries and the international community to act on the “Tokyo Agenda for Action” and realize its goals. It is important for Japan to coordinate its assistance efforts with international initiatives, such as the Special Program of Assistance for Africa (SPA) which the World Bank and other donors are promoting.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

6. Latin America and the Caribbean

Since the beginning of the 1990s, Latin American countries have achieved significant progress as emerging market economies through the process of democratization and economic reform. Food- and energy-resource rich countries can look forward to the further development of countries in this region in the 21^st century as strategic suppliers of food and energy resources.

The large number of Japanese migrants and their descendants have played an important role in promoting development in Latin America. In view of the fact that these migrants traditionally have acted as bridges between Japan and Latin America, it is important for Japan to support their efforts.

In view of the development of Pan-Pacific cooperation in recent years, the provision of assistance to the Pacific Basin region is growing in importance. Furthermore, due attention should be paid to the fact that effective support for promoting regional integration is needed in the Southern Cone common market (MERCOSUR), as well as in the Caribbean and Central American countries.

It must be borne in mind that economic development and democratization can be seriously hampered where basic social and economic infrastructures remain underdeveloped and extremes of wealth and poverty persist.

The Central American countries that sustained heavy hurricane damage during 1998 require support for the urgent task of restoration and reconstruction.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

7. Oceania

Japan enjoys close ties with the Pacific island countries and depends on these countries for supplies of marine and forestry products. Because of their extremely small national scales and their marked dependence on primary products, these countries are particularly vulnerable to natural disasters, fluctuations in the international prices of primary products and other external factors. Development is further hampered by other factors, such as the dispersion of landmass over large areas, the limited scale of domestic markets and the distance from international markets. The provision of adequate health care services also poses a difficult challenge. On the other hand, the vast area of exclusive economic waters held by these island nations establishes them as promising sources of marine products and underwater mineral resources.

The countries of the region share an awareness of the need to achieve economic self-reliance through economic reform and private-sector development and are involved in reforming their fiscal and administrative systems.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

8. Europe

Many of the former Soviet-bloc countries of Central and Eastern Europe are currently in the process of transforming to market economies, and it is necessary to support the efforts of these countries. The achievement and maintenance of peace through post-conflict restoration and reconstruction, such as in the former-Yugoslav region, constitutes an international challenge to which Japan will provide its share of assistance.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

IV. Aid Modalities

Implementation of ODA calls for collaboration and coordination among government ministries and agencies, as well as the active utilization of the experience and know-how of the private sector, NGOs, local governments, labor and management groups, and other entities. Likewise, active measures will be taken to promote cooperation and collaboration with other donor countries and international organizations. Furthermore, active support must be given to encouraging and expanding South-South cooperation.

1. Coordination of ODA Programs within the Japanese Government, among Implementing Agencies and with Various Schemes for Aid

2. Coordination with Other Official Flows (OOF) and with the Private Sector

Private-sector trade and investment is playing an increasingly important role in the economic development of developing countries. In light of this fact, due attention will be paid to the following points.

3. Support to and Collaboration with NGOs

Social development projects, including poverty alleviation and environmental conservation, constitute a steadily increasing share of Japan’s overall assistance to developing countries. For this reason, there is a growing demand for finely tuned assistance that directly reaches local populations. Consequently, NGOs have been playing an increasingly important role in the process of economic cooperation and there is a growing need for collaboration with NGOs in the implementation of ODA projects.

In light of the above, due attention will be paid to the following points.

It is necessary to strengthen collaborative relations with local governments that have a wealth of technical know-how and experiences in fields closely linked to everyday life of the people or that are involved in personnel exchanges with developing countries through sister-city arrangements. The active utilization of the know-how of local governments can facilitate more effective assistance and is extremely beneficial in terms of developing public participation in aid activities.

In light of the above, due attention will be paid to the following points.

4. Coordination with Other Donor Countries and International Organizations

In order to achieve greater effectiveness and efficiency in ODA implementation, it is necessary for Japan to develop closer ties of collaboration and cooperation with other donor countries and international organizations. Such initiatives must go beyond the avoidance of redundancy in aid and must aim to achieve significant synergy. In this process, it is also important to assist developing countries to enhance their coordinating capacities as aid recipients.

In light of the above, due attention will be paid to the following points.

5. Support for South-South Cooperation

The development of developing countries is a challenge that should be addressed by the entire international community. As such, donor nations should not be limited to industrial countries. Rather, it is desirable for more advanced developing countries and developing countries with adequate experiences and technologies to actively participate in helping other developing countries. This form of assistance will contribute to bolstering global aid resources and will also stimulate intra- and inter-regional cooperation.

Development assistance provided by developing countries, or “South-South cooperation,”^*33 can be particularly effective in facilitating the transfer of technologies between countries at similar stages of development or that have common backgrounds, such as language and culture. Moreover, South-South cooperation can result in significant cost reductions when undertaken between neighboring countries.

In light of the above, due attention will be paid to the following points.

V. Points to Be Followed in the Implementation and Management of ODA

1. Understanding of the Conditions in Individual Developing Countries and the Formulation of Country Assistance Programs

2. Preliminary Studies, Environmental Considerations, Monitoring of Implementation, and Ex-Post Evaluation

(1) Preliminary Studies and Environmental Considerations

(2) Monitoring

(3) Ex-Post Evaluation

3. Human Resources for Development Cooperation

Successful implementation of assistance ultimately depends on the skills of people. Thus, the availability and utilization of individuals with appropriate skills stands as extremely important requirement for the efficient implementation of assistance. Efficient implementation should involve both the employment of experts with outstanding knowledge and skills in specific fields and undertakings, and the use of local experts with specialized knowledge of local conditions. Furthermore, it is necessary to maintain effective communications and collaborate with personnel on project sites, local executing agencies, and educational institutions.

In light of the above, due attention will be paid to the following points.

4. Promoting Public Understanding and Participation

To establish broader understanding and support for ODA, it will be necessary to promote public relations activities, the disclosure of information both domestically and abroad, and enlist the cooperation of the various strata of society and organizations in project implementation. From the perspective of increasing national involvement in and visibility of Japanese aid, it will be extremely important to expand Japan’s personnel contribution to the international community by effectively utilizing Japan’s own human resources.

In light of the above, due attention will be paid to the following points.

5. Promoting Information Disclosure

Japan’s disclosure of ODA information has received high marks in the international community as evidenced by the “Peer Review Report on Japan’s ODA” (1995) compiled by the OECD’s DAC. However, further progress must be made in disclosing information to the public in order to gain support and understanding.

In light of the above, due attention will be paid to the following points.

Japan’s Medium-Term Policy on Official Development Assistance (ODA) — Explanatory Notes

Introduction

*1 The Official Development Assistance Charter (ODA Charter)
The ODA Charter, approved by Cabinet on June 30, 1992, constitutes the most important basic document concerning Japan’s ODA policies. It was formulated to clarify Japan’s ODA philosophy and principles and is based on past achievements, experiences, and lessons. The Charter consists of six sections covering the following areas: basic philosophy, principles, priorities, measures for effective ODA implementation, measures for promoting understanding and support at home and abroad, and the ODA implementation system. The following four key elements are identified under “basic philosophy”: (1) humanitarian considerations, (2) recognition of global interdependence, (3) the importance of self-help efforts, and (4) environmental conservation. Under “principles,” Japan commits itself to the following four points while “taking into comprehensive account each recipient country’s requests, socioeconomic conditions, and Japan’s bilateral relations with the recipient country”: (1) environmental conservation and development should be pursued in tandem, (2) use of ODA for military purposes or for aggravation of international conflicts should be avoided, (3) full attention should be paid to trends in recipient countries’ military expenditures, their development and production of weapons of mass destruction and missiles, and the export and import of arms, and (4) full attention should be paid to efforts for promoting democratization and the introduction of a market-oriented economy and to the situation regarding the securing of basic human rights and freedoms.

I. Basic Approaches

*2 OECD/DAC “Development Partnership Strategy”
In May 1996, the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD) adopted a document entitled “Development Partnership Strategy (Shaping the 21^st Century: The Contribution of Development Cooperation),” which identified certain goals and objectives for development assistance in the 21^st century. The document aims to improve the living standards of all humankind and sets forth concrete goals and schedules for the achievement of these goals. The specific goals are as follows: (1) by 2015, a reduction by one-half of the proportion of people living in extreme poverty, (2) universal primary education in all countries by 2015, (3) elimination of gender disparity in primary and secondary education by 2005, (4) reduction by two-thirds in infant mortality rates by 2015, (5) reduction by three-fourths in maternal mortality rates by 2015, (6) access to reproductive health services by 2015, (7) formulation of national strategies for sustainable development by 2005, and (8) reversal of the deterioration in environmental resources by 2015. The document states that cooperation between the advanced and developing countries is indispensable to the achievement of these goals, and emphasizes the importance of global partnership.

*3 Least among Less Developed Countries (LLDCs)
LLDC refers to the least developed group of developing countries and is defined by the United Nations Development Program Committee on the following basis: per capita GDP (below $899 as of 1999), human resources development (average life expectancy, etc.), and vulnerability of economic structure (share of manufacturing in GDP, etc.). Currently, 48 countries are recognized as LLDCs (33 countries in Africa, eight in Asia, five in the Pacific, and two elsewhere).

II. Priority Issues and Sectors

1. Support for Poverty Alleviation Programs and Social Development

*4 The “20/20 Initiative” for Social Development
Under this initiative, developing countries are to commit 20% of their national budget, and developed countries 20% of their ODA, to such areas in social development as to be given priority to human development (basic education, basic health services, drinking water, family planning, etc.). Proposed by the United Nations Development Program (UNDP), it was decided at the World Summit for Social Development (hosted by the United Nations in March 1995) that the goals of the 20/20 Initiative would be implemented by countries in agreement with the initiative’s objective. Japan has met the goal of this initiative, as the annual share of social development commitments in its bilateral development assistance has exceeded the 20% mark in every year from 1993 to 1998.

*5 The “Initiative for a Caring World”
Proposed by then prime Minister Hashimoto at the Lyon Summit in June 1996, the “Initiative for a Caring World” is aimed at finding solutions to the problems of various countries by sharing the knowledge and experiences of developed, as well as developing, countries concerning social security policies, covering such areas as public sanitation, health insurance, and pension systems.

Current projects targeting the developing countries include: promoting measures for global parasitic disease control; sharing of knowledge and experiences through international conferences for high-level administrators of social security; and, personnel training, dispatch of experts and acceptance of trainees for promoting the development of social security systems in developing countries.

*6 The Women in Development (WID) Perspective
For details, see section (3) Women in Development (WID)/Gender in Developing Countries.

(1) Basic Education
*7 Assistance for the Construction of School Buildings
In the five-year period beginning in fiscal 1993, Japan provided assistance for the construction of approximately 16,000 school buildings. In Jordan, for instance, ODA loans have been used in the construction of 9% of all primary and secondary school buildings. In Nepal, Japanese grant assistance has been used to provide materials needed for the construction of school buildings, with entire communities participating in the actual construction work. Following this initiative, elementary school enrollment ratios in Nepal climbed from 64% in 1990 to 75% in 1994.

*8 Japan’s Contributions to UNICEF Activities for the Education of Girls
Since fiscal 1993, Japan has annually contributed US$1 million to UNICEF related activities.

(2) Health and Medical Care
*9 The Number of New Cases of Polio
The annual global incidence of polio has dropped from approximately 35,000 cases in 1988 to approximately 3,200 cases in 1998. Japan has identified East Asia and the Pacific region as priority areas for assistance in polio control. Since fiscal 1993, Japan has implemented assistance totaling approximately ¥2.8 billion for providing polio vaccines, cold chain portable refrigerator for vaccines storage, and diagnostic and monitoring equipment. (This assistance amounts to approximately 35% of all assistance provided to these regions in the fight against polio.) As a result of these efforts, polio has been almost totally eliminated from these regions.

2. Support for Economic and Social Infrastructure

*10 Examples of Japan’s Assistance through ODA Loans in Asia
In the fields of transportation and communications, Japan’s ODA loans accounted for 38% of the total electrification of China’s railways, approximately 32% of the construction of the highways in Bangkok, approximately 15% of the installation of all telephone lines in the Philippines, and the construction and expansion of the port of Colombo, which handles approximately 89% of all cargo shipments in Sri Lanka. In the area of energy, Japan has cooperated in the construction of about 24% of all power generating facilities in Malaysia, 18% in Indonesia, 15% in Thailand, 44% in Vietnam, 18% in Bangladesh, and 20% in Egypt. Japanese ODA has accounted for 60% of the water supply facilities in the city of Jakarta, and 56% of the sewerage treatment facilities in the Republic of Korea.

3. Human Resources Development and Intellectual Support

(1) Human Resources Development
*11 Since 1954, Japan has accepted more than 160,000 trainees. The geographic distribution of trainees accepted during fiscal 1997 (totaling 7,263 persons from 152 countries and regions) is as follows: 6,214 from Asia (50.6% of total), 2,381 from Latin America (19.4%), 1,046 from the Middle East (8.5%), and 1,602 from Africa (13%). Distribution by field is as follows: 2,440 in human resources development (19.9% of total), 2,340 in planning and administration (19.1%), 2,049 in public and public-sector enterprises (16.7%), 1,971 in agriculture, forestry and fisheries (16%), 1,398 in health and medical services (11.4%), and 991 in mining (8.1%).

*12 Third-country Training
Third-country training refers to the acceptance of trainees by developing countries under financial and technical assistance from Japan. Such arrangements provide the advantage of training in neighboring countries with similar social and cultural environments. For instance, using technologies transferred from Japan, third-country training was provided in Thailand to trainees from Vietnam and Laos with Japan supporting this transfer of technologies from Thailand to third countries. During fiscal 1997, some 1,836 trainees participated in third-country training programs offered in 23 countries, including Thailand and Singapore in Asia, and Brazil, Chile, and Egypt.

(3) Support for Democratization
*13 Disbursements for Support for Democratization
At the Lyon Summit held in 1996, Japan announced its initiative for “Partnership for Democratic Development” (PDD) aimed at supporting the democratization of developing countries. Specific forms of assistance include assistance for elections, reinforcement of civil society and human resources development. During the five-year period beginning in fiscal 1994, Japan has accepted 765 trainees in the field of democratization and has provided financial assistance to elections in 27 countries and regions.

4. Responding to Global Issues

(1) Environmental Conservation
*14 ODA in the Environmental Sector
At the 1992 United Nations Conference on the Environment and Development (the so-called “Earth Summit” held in Rio de Janeiro), Japan announced that it would increase its environmental ODA commitments to between 900 billion yen and 1 trillion yen for the period of fiscal 1992–1996. The actual amount of assistance came to approximately 1,440 billion yen during this period. This trend has continued in recent years. For example, of the 28 projects contained in Japan’s fourth ODA loan package for China, 16 projects are focused on the environment in response to environmental deterioration triggered by economic growth. Japan is also promoting the “Japan-China Environmental Model Cities Plan” (covering the three cities of Chongqing, Gui Yang, and Dalian). The aim of this initiative is to develop successful examples of air pollution control and air quality improvement and present these as model cases for the rest of China.

*15 Kyoto Initiative (Providing Assistance to Developing Countries for Combating Global Warming)
In view of the third session of the Conference of Parties to the United Nations Framework Convention on Climate Change held in Kyoto in December 1997, Japan committed itself to environmental ODA initiatives focused on the problem of global warming as follows: (1) capacity development in fields relevant to global warming, (2) provision of ODA loans related to global warming on the most concessional conditions, and (3) provision of Japanese technology and experiences (know-how). In fiscal 1998, the most favorable ODA loan terms were applied to 20 global-warming related projects amounting to ¥243.3 billion, while about 1,000 people received JICA technical training in related fields.

(2) Population and AIDS
*16 The Change in the World Population
According to the joint United Nations Population Fund (UNFPA), the world population is projected to grow from about six billion in 1998 to more than eight billion by 2025. Most of this growth will occur in developing countries.

*17 The Number of People Infected with HIV/AIDS and AIDS Patients
According to the Joint United Nations Program on HIV/AIDS (UNAIDS) and the World Health Organization (WHO), there were approximately 33.4 million people living with HIV/AIDS in the world as of the end of 1998, and approximately 2.5 million people died of AIDS during 1998.

*18 The “Global Issues Initiative on Population and AIDS (GII)”
Japan announced GII as an independent initiative in 1994, which involved the commitment of approximately $3 billion in population and AIDS-related assistance to developing countries during a seven-year period beginning in fiscal 1994. From the perspective of reproductive health, GII contains direct assistance for population and family planning. In addition, GII supports a comprehensive approach to basic health and medical services, primary education for women and children, and the empowerment of women. In Indonesia, for instance, a project has been implemented that uses “mother and child health handbooks,” which has resulted in lower maternal and infant mortality rates. As of the end of fiscal 1998, the cumulative amount of GII-related assistance reached approximately $3.7 billion to already exceed the seven-year goal established in 1994.

5. Support for Overcoming the Asian Currency and Economic Crisis and Promotion of Economic Structural Reform

*19 Special ODA Loans to Support Economic Structural Reform
This scheme was announced in December 1998 at the Meeting between ASEAN Heads of State/Government and the Leaders of Peoples Republic of China, Japan, and the Republic of Korea. The aim of the scheme is to stimulate the economies of Asian countries, to promote job creation, and to support infrastructure development conducive to economic structural reform. This program features a special facility of a maximum total of 600 billion yen to be provided over a three-year period on concessional terms. For the time being, the interest rate will be set at 1%, with a repayment period of 40 years.

6. Conflict, Disaster, and Development

(1) Conflict and Development
*20 Japan’s Assistance to the Palestinian People
Over a five-and-half-year period beginning in 1993, Japan provided $436 million in assistance to the Palestinian people. Assistance was provided through international organizations for strengthening administrative organizations, for the development of water and sewerage facilities, school building and other infrastructure projects, and improvement of education and basic health care services. In 1996, Japan began providing direct assistance to the Palestinian Authority and has provided a wide range of assistance toward improving living standards. In October 1997 and June 1998, Japan decided to assist in the construction of ten primary and secondary schools in the Gaza Strip.

*21 A Specific Recent Example of Japan’s Humanitarian Assistance: Assistance for Kosovo
In April 1999, a Japan aid package of approximately $200 million for Kosovo was channeled through the United Nations High Commissioner for Refugees (UNHCR) and other multilateral and bilateral means. This contribution is intended as humanitarian assistance for Kosovo refugees and displaced persons, assistance for affected neighboring countries, and support for the reconstruction of Kosovo.

*22 Clearance of Anti-personnel Land Mines and the Support of Victims
On a monthly basis, there are approximately 2,000 land mine casualties among non-combatants throughout the world. In September 1997, the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on Their Destruction was adopted. The Tokyo Conference on Anti-Personnel Land mines, held in March 1997, adopted the Tokyo Guidelines for achieving “zero victims.” To work toward the achievement of this goal, in November 1997 Japan announced that it would provide approximately $10 billion in assistance over a five-year period beginning in 1998.

7. Responding to Issues of Debt Relief

*23 Grant Aid for Debt Relief
In accordance with the resolution adopted in 1978 by the Ninth Trade Development Board (TDB) of the United Nations Conference on Trade and Development (UNCTAD), Japan has been providing grant aid for debt relief to LLDCs with whom Japan has ODA loan arrangements, and to the countries most seriously affected by the oil crisis (MSAC). In the case of LLDCs, whenever repayments are received on ODA loans (according to loan arrangements signed during or before fiscal 1987), Japan provides scheme grants corresponding to the amount of principal and interest payments received. Japan has provided grant aid for debt relief amounting to approximately 340 billion yen in the period between fiscal 1978 and 1998.

*24 Decision Taken at the Köln Summit to Provide Assistance for Heavily Indebted Poor Countries (HIPCs)
It was decided at the Köln Summit that international debt relief should be provided to the most heavily indebted poor countries (HIPCs) under the existing framework for international debt relief (the so-called “HIPCs Initiative”). The debt reduction ratio was increased to 100% in the case of bilateral ODA, and other measures of debt relief were expanded and improved.

III. Priority Issues and Sectors by Region

*25 Japan is the leading bilateral ODA donor for 17 countries in Asia, five in the Middle East, six in Africa, 14 in Latin America and the Caribbean, and five in the Oceania region (as of 1996).

1. East Asia

*26 South-South Cooperation
This refers to economic cooperation provided by relatively advanced developing economies in the South to other developing countries in the South. For details, see section IV, Methods of Aid 5. Support for South-South Cooperation. Third-country training described in footnote 12 is a typical form of support for South-South Cooperation.

2. Southwest Asia

*27 The Impoverished Population of Southwest Asia
The impoverished population of Southwest Asia exceeds 500 million and is larger than that of sub-Saharan Africa (approximately 220 million). Of the seven Southwest Asian countries, four are recognized as LLDCs.

3. Central Asia and the Caucasus

*28 “Silk Road Diplomacy”
The “Silk Road region” covers five Central Asian countries and three countries of the Caucasus. The “Eurasian diplomatic initiative,” announced in 1997 by the then prime Minister Hashimoto, presented Japan’s policy of actively seeking to develop closer ties with this region. The principal points of the initiative are as follows: (1) promotion of political dialogue to strengthen mutual confidence and understanding, (2) economic assistance for supporting regional prosperity and assistance for development of resources, and (3) support for promoting peace through nuclear non-proliferation, democratization, and stabilization.

5. Africa

*29 Support for Poverty Alleviation and Social Development in Africa
At TICAD II, held in October 1998, Japan announced that it would provide grant aid amounting to 90 billion yen over a five-year period for education, health and medical services, and water supply development.

IV. Methods of Aid

2. Coordination with Other Official Flows (OOF) and with the Private Sector

*30 Other Official Flows (OOF)
This refers to non-ODA government-funded economic cooperation provided to developing countries. Included in OOF are export financing and loans for direct foreign investment provided to the private sector by the Export-Import Bank of Japan and the Bank of Japan’s purchase of bonds issued by the World Bank.

4. Coordination with Other Donor Countries and International Organizations

*31 Sector Programs
Under this approach, a recipient country takes the initiative in formulating a development plan for a specific sector (such as education, health and medical care). The plan is then discussed by the recipient country and the agencies of donor countries, and necessary adjustments are made.

*32 The Japan-US Common Agenda
This refers to common issues identified by Japan and the United States from a global perspective for assisting the development of developing countries. The Common Agenda, launched in July 1993, provides for joint Japan-US action with regard to global-scale problems such as the environment, population, and health and medical services. Currently, various types of projects are being implemented in 18 different fields, which come under the following four major concerns: “promoting health and human development,” “responding to challenges to the stability of human society,” “protection of the global environment,” and “the advance of science and technology.” Activities in these fields are reviewed in annual plenary meetings held at the deputy-ministerial level.

5. Support for South-South Cooperation

*33 Efforts Toward South-South Cooperation
Japan has taken advantage of various opportunities to promote South-South cooperation. For instance, Japan held a meeting for “emerging donors” (developing countries who have made progress in economic development and are simultaneously aid recipients and aid donors) to discuss future directions. This South-South Cooperation Meeting was held in May 1998 in Okinawa. At the 2^nd International Conference on African Development (TICAD II) hosted by Japan in October 1998, a decision was made to promote Asian-African cooperation as a concrete form of South-South cooperation. In fiscal 1997, Japan contributed $4 million to the United Nations Development Program (UNDP) to support South-South cooperation through UNDP.