Japan's Official Development Assistance White Paper 2005

Main Text > Part II ODA DISBURSEMENTS IN FISCAL YEAR 2004 > Chapter 2 Details and New Policies about Japan's ODA: Striving for Further ODA Reforms > Section 2. Measures for Each of the Priority Issues > 2.Sustainable Growth > (1) Assistance for Economic and Social Infrastructure

(1) Assistance for Economic and Social Infrastructure

As stated in Part I, Japan believes that for poverty reduction, it is indispensable not only to implement poverty countermeasures or to provide assistance in the area of social development that could directly influence the poor, but also to promote sustainable growth. From this standpoint, Japan places importance on promoting trade, investment, and people-to-people communication through such means as the improvement of economic and social infrastructure that provides the foundation for the development of developing countries. More concretely, Japan is assisting in the development of various infrastructures, including assistance that would help to expand the scope of basic social services, such as education, health care, safe water, and housing; assistance to improve access to hospitals and schools, etc., such as transportation, communication, and other economic infrastructures, and assistance for small-scale economic infrastructures to benefit the poor population, such as agricultural markets, fishing ports, and farm roads. Furthermore, in order to foster the independence and promote sustainable growth of developing countries, private-sector activities must be promoted. Based on this perspective, Japan has actively contributed to infrastructure development for transportation, energy, information, communication, and living environments, etc., that would contribute to the development of trade and investment conditions to attract investments from the private sector.

Regarding Japan's commitments in FY2004, approximately ¥262 billion (approximately 40.0% of yen loans) was extended to transportation infrastructure and ¥3 billion (0.5% of yen loans) to communication infrastructure. Further, for 30% of transportation infrastructure projects, "Special Terms for Economic Partnership ( STEP )," which aims to make use of Japan's advanced technology and know-how, has been applied.

In the area of transportation infrastructure, for example, Japan in FY2004 provided yen loans to Vietnam to support the "New National Highway No. 3 and Regional Road Network Construction Project (Section Hanoi Thai Nguyen) (I)" and "Saigon East-West Highway Construction Project (IV)." Vietnam has faced increasingly serious road traffic problems, such as chronic traffic congestion, worsening of roadside environments, and a rise in traffic accidents, due to its rapid population increase and economic growth in recent years. Developing such road infrastructures is expected to improve the convenience and safety for road users and promote efficiency of distribution, which would help strengthen the economic foundation and stimulate well-balanced economic growth.

In the area of communication infrastructure, for example, Japan in FY2004 provided yen loans to Cambodia to assist the "Greater Mekong Telecommunications Backbone Network Project." This project is a part of the Cambodian government's plan to develop a backbone transmission channel that connects all of its provincial capitals by means of fiber optics cable or microwave. It will lay down fiber optics cable from Kompong Cham, which is a hub of economic activities where 45% of the county's population lives, through the capital Phnom Penh to Cambodia's only outer harbor, Sihanoukville. Improving the transmission function in these areas of high economic growth is expected to support sustainable growth.

The first subway line in Thailand was constructed with the yen loans provided by Japan. The photograph is of the tunnel of the subway
The first subway line in Thailand was constructed with the yen loans provided by Japan. The photograph is of the tunnel of the subway

In order to establish infrastructures in developing countries based on appropriate development policies and to manage and operate them in an adequate manner, it is essential to develop human resources to respond to such needs. Japan has been providing a wide range of technical cooperation, including the formulation of national land or city planning, the training of engineers to manage and operate constructed facilities, the provision of equipments necessary for management and operation, and the development research.

Japan has been also helping to promote institutional development related to trade and investment. Through such organizations as the Japan External Trade Organization ( JETRO ) and the Association for Overseas Technical Scholarship ( AOTS ), Japan has been dispatching experts on various areas, accepting trainees, and holding seminars in order to cultivate human resources needed for developing systems in the areas of intellectual property protection, standards and certification, streamlining distribution, environment and energy conservation, industrial human resources, and others.

Column 5 Connecting to a Bright Future: Pak-Japan Friendship Tunnel

Moreover, Japan has been utilizing its accumulated know-how regarding infrastructure development, to take active part in the "Ministers' Forum on Infrastructure Development in the Asia-Pacific Region," which has continuously provided an opportunity to discuss the main issues in the Asia-Pacific region. This forum was established in 1995 with a proposal by Japan. The fifth ministers' forum was held in January 2005 in Malaysia, in which thirteen countries and regions participated. Under the theme of "balance between infrastructure development and environment," concrete discussions were held on such topics as the promotion of international cooperation for resolution of global environmental issues.