Japan's Official Development Assistance White Paper 2006

Main Text > Part I JAPAN'S OFFICIAL DEVELOPMENT ASSISTANCE FOR WORLD PEACE AND PROSPERITY > Chapter 1 The Role of ODA: Its Transition and Changes > Section 2. ODA: Expansion and Change

Section 2. ODA: Expansion and Change

Japan's ODA and its surrounding circumstances have markedly changed over the years. During the era of spectacular economic growth from the 1960s through the 1970s, Japan's gross national product (GNP) grew to take the second place next to that of the United States. Japan has also become highly influential in international affairs, participating in summit meetings since their inception in 1975. At the same time, Japan's ODA has expanded quantitatively and become more diverse in terms of the forms of assistance provided, covering a wider range of fields and geographical regions.

    Meanwhile, in the 1970s an emphasis on assistance addressing basic human needs (BHN) emerged as a prominent international trend in development assistance. In keeping with this trend, Japan has increased its assistance in the field of BHN.

    In the 1980s the balance of international payments of developing countries began to deteriorate due to the oil crises in 1973 and 1979 and the sharp drop in the commodity prices. Many countries accumulated debt to unsustainable levels for their economic conditions. For this reason, structural adjustment lending aimed at improving the economic structures of developing countries became the mainstream of development assistance, primarily through the World Bank. As a result, assistance for economic reforms seeking small governments and the liberalization of economies came to the fore. While Japan provided co-financing for the World Bank's structural adjustment lending, at the same time, Japan continued to provide assistance based upon its unique recognition that government has an important role in economic development and that project-based assistance was necessary. Such assistance from Japan contributed to the remarkable economic development in East Asia. Japan's approach has influenced international understanding about development assistance, as demonstrated by the publication of the report entitled the East Asian Miracle by the World Bank in 1993.

    In the 1990s the Cold War structure collapsed and Western countries, suffering from "aid fatigue," curtailed the amount of assistance they provided. Meanwhile, in the decade between 1991 and 2000 Japan became the largest provider of assistance in the world. In addition, amid the trend toward globalization since the end of the Cold War, attention has come to be focused on global issues such as conflicts, drugs, environmental issues, infectious diseases, and gender disparities, along with the gap between the rich and poor. Moreover, with the outbreak of the 1990 Gulf War, debate arose as to what Japan's international contribution should be in the post-Cold War international environment. Later, the frequent occurrence of conflicts in various regions due to ethnic hostilities revealed the need for comprehensive and seamless support in areas ranging from prevention of conflict to the consolidation of peace, nation building, and full-scale reconstruction and development. These new priorities spurred a review of ODA on whether it should extend beyond the existing development assistance and address such issues as democratization, human rights, good governance, human resource development, and institution building in recipient countries.

    In light of these developments, Japan enacted the Four Key Principles*1 in 1991, and in June 1992 the Official Development Assistance (ODA) Charter, the basic statement of Japan's ODA policy, was enacted. Based on the Four Key Principles and international trends, the Charter set forth Japan's unique and active philosophy for its development assistance. To the existing principles of: (1) humanitarian viewpoint and (2) recognition of interdependence among nations, the Charter added: (3) environmental conservation and (4) support of self-help efforts aimed at economic take-off in developing countries. The ODA Charter also took up Asia as a priority region and addressed global issues, including environmental issues, as one of its priority issues. Other issues specified by the Charter included strengthening policy dialogues with recipient countries, giving consideration to socially vulnerable people such as women and children, correcting disparities between the rich and poor, the prevention of fraud and corruption, and the promotion of the disclosure of information.

The second Bosphorus Bridge
The second Bosphorus Bridge

    Since that time Japan, in keeping with the ODA Charter, has worked to respond appropriately to diversifying demands for assistance. In implementing the Charter, Japan has instituted measures that reflect the basic principles of the Charter, such as the policy whereby if developing countries are acting favorably in light of its principles, such behavior should be promoted through assistance; but if developing countries are not acting favorably, they will be required to improve conditions, and assistance will be adjusted to these conditions.