Chapter 3

4. List of Country Assistance Plans

5. List of Major Initiatives in each Sector

6. Press Statement by the Chairman of the Development Assistance Committee (DAC)

Japan Strives to Align Policies and Resources with New Aid Vision

Japan’s net official development assistance (ODA) was US$ 9.3 billion in 2002, making it the world’s second largest donor. Japan was the largest aid donor for almost a decade, from 1992 to 2001, until economic pressures led the government to reduce the size of its ODA. The 2002 level represented 0.23% of Japan’s Gross National Income, down from 0.31% in 1991–2. At the Monterrey conference, Japan was one of the few aid donors unable to commit to increase its level of aid.

The OECD Development Assistance Committee (DAC) Peer Review of Japanese development co-operation noted positive reforms in Japan’s aid strategy and management. Most importantly, Japan revised its ODA Charter, incorporating new strategic priorities more in tune with current international and domestic realities, including poverty reduction, sustainable growth, the need to address global issues and peace building. It also made changes to the two leading agencies that implement its aid: the legal status of the Japan International Cooperation Agency (JICA) changed in 2003 to make this technical co-operation agency more autonomous and efficient and, in 1999, two former loan agencies were merged into the Japan Bank for International Cooperation (JBIC). Finally, the Ministry of Foreign Affairs is now legally mandated to co-ordinate the diverse and often compartmentalized implementing institutions of ODA.

The review centered on the implications which implementing the new ODA Charter will have on Japan’s aid system at headquarters and in the field. Specifically, the discussion addressed questions relating to fuller integration of crosscutting themes like poverty reduction into Japan’s development strategy. It strongly encouraged Japan to increase its overall aid volume. It noted Japan’s efforts to respond to crises. It urged the government to strengthen public support for sustained ODA and for achieving the Millennium Development Goals. The Committee encouraged Japan to consider raising the share of grant assistance in its ODA for low income, highly indebted countries. Other key topics included the need to improve policy coherence for development across ministries including the issue of agriculture. It also noted the utility of further streamlining and decentralizing Japan’s aid management along the lines of promising approaches now being tested in Tanzania and Vietnam, which will require more and higher level staff. In this regard the Committee recognized Japan’s support for co-ordination and harmonization of donor practices in developing partner countries.

The review welcomed the stronger Japanese role in shaping the international consensus on development and the increasing convergence of views on economic growth and poverty reduction.

The DAC Peer Review of Japan’s development co-operation policies and programs took place on 12 December, 2003. The meeting was led by the DAC Chair Richard Manning and the Japanese Delegation was headed by Motohide Yoshikawa, Deputy Director General, Economic Co-operation Bureau, Ministry of Foreign Affairs. The examiners for this Peer Review were the United States and the European Commission.