Japan's Official Development Assistance White Paper 2006

Main Text > Part I JAPAN'S OFFICIAL DEVELOPMENT ASSISTANCE FOR WORLD PEACE AND PROSPERITY > Chapter 3 Aiming for Strategic, Flexible, and Effective ODA > Section 2. Improving the Quality of ODA

Section 2. Improving the Quality of ODA

As described above, while consideration was given to strategy, policy, and implementation regarding ODA, a new framework was constructed. Constant examination and improvements were conducted in order to develop the quality of assistance.

    In December 2005 MOFA, together with the assistance of outside specialists, prepared a report entitled "Examination and Improvement of ODA—Aiming for Better-Quality ODA." The report concerns the various reform measures that have been taken over the past years as represented under the revision of the ODA Charter in 2003 and the Medium-Term Policy on ODA in 2005. "Examination and Improvement of ODA" identified three stages needed to improve Japan's ODA: (1) strengthening strategic value (selection and concentration); (2) increasing efficiency (cost reductions); and (3) improving checking systems. In order to use the results of the evaluations in the planning and implementation of ODA, the report indicated where improvements were needed in each of these stages so as to establish a continuous cycle as the PDCA (Plan, Do, Check, and Act) cycle that functions unfailingly.

    As the full-scale reorganization of the implementation system described in Section 1 was decided upon after the announcement of this report, efforts to push forward reforms that surpass those aimed for in this report are currently in progress. ODA must be reviewed and improved hereafter on a regular basis. In the next section, specific ODA reform measures implemented up to the end of FY2005 will be described below in terms of the aforementioned three stages.

Box I-3. Ten New Measures by "Examination and Improvement of ODA"

Strengthening Strategic Value

The use of ODA as an important instrument of diplomatic policy requires clear identification of priority regions and sectors and the provision of assistance that is flexible and adaptable.

(1) Enhancing Functions of Field Level

In order to strengthen the strategic value of Japan's ODA, the guidelines established in the ODA Charter, the Medium-Term Policy on ODA, and sector-specific initiatives must be reflected in the actual delivery of assistance. They emphasize the need to strengthen the function of policy formulation and implementation based on the view of the field mission, and implement assistance with unity and consistence for the government as a whole.

    The Japanese government has introduced and extended Country Assistance Programs in its ODA reform process up to now. Country Assistance Programs clarify priority sectors in the medium term for four to five years ahead by taking into account political, economic, and social conditions of the recipient country as well as its development needs and its own development plans.

    The ODA Charter revised in 2003 set forth a policy of enhancing functions at field level and in the same year established country-based ODA task forces consisting of Japan's overseas diplomatic missions and field offices of implementing agencies. At present, task forces operate in 72 countries. The work of country-based ODA task forces includes the conduct of research and analysis of development needs of the target country or region, a comprehensive and accurate, understandable picture of priority issues and of contribution required for Japan. They then develop and select candidate projects for ODA, make Country Assistance Policy, and prepare assistance guidelines by priority issue and development sector.

    Chart I-19 Strategic Value of ODA

Chart I-19 Strategic Value of ODA

(2) For Achieving Strategic Objectives

To strengthen the strategic value of ODA and implement the country-based approach described above, it is necessary to set a series of objectives based on region and sectoral issues and then to allocate ODA according to its priority. Based on this fundamental approach, Japan is currently reviewing its policy from the perspective of providing assistance that harmonizes development issues and the priority of key diplomatic policies.

    Demonstrating Japan's leadership in global issues, such as contributing to the achievement of the MDGs, does not seem at first glance to offer any direct benefit to Japan; in the long term, however, it is highly significant in that it helps Japan to earn the trust and esteem of the international community.

Improving Efficiency

To respond to diversifying development needs such as the achievement of the MDGs, support for disaster prevention and reconstruction from the disaster, and measures against terrorism and piracy, it is necessary to work to implement ODA efficiently as a whole, and to draw the maximum effects. Specific measures that can be taken toward this end include: (1) coordination among the schemes of ODA; (2) cooperation with other donors or NGOs when providing assistance; and (3) efforts to reduce costs.

(1) Strengthening Coordination among Schemes

Japan is working to coordinate the various schemes of economic cooperation such as yen loans, grant aid and technical cooperation. One specific type of coordination that is increasingly used is where, for example, support is provided through yen loans or grant aid for constructing school buildings or supplying equipment and materials, while at the same time providing technical cooperation through the dispatch of experts to train teachers or improve school administration. Japan's assistance to Iraq provides another example: immediately after the end of the conflict, Japan first provided grant aid to support reconstruction of the nation, and then as the situation stabilized and the peaceful process of nation building moved forward, projects with large funding requirements were implemented through yen loans, thereby providing smooth support with coordination among schemes.

(2) Strengthening Collaboration with Other Donors and NGOs

For implementing assistance, it is essential for the Government to work not only with JICA and JBIC, the implementing agencies of ODA, but also with NGOs, other donor countries and relevant international organizations.

    Chart I-20 Examples of JICA-JBIC Collaboration (FY2005)

Chart I-20 Examples of JICA-JBIC Collaboration (FY2005)

Box I-4. Examples of Aid Collaboration in Bilateral Assistance and Assistance Provided through International Organizations

    The international cooperation activities of NGOs play extremely important roles in delivering fine-tuned assistance that meets the diverse needs of developing countries and regions, as well as promptly and flexibly implementing emergency humanitarian assistance activities. The Government has also strengthened coordination with NGOs through, for example, Japan Platform (see Part II, Chapter 2, Section 5) for emergency humanitarian aid delivery. In addition, the Government is promoting dialogue and cooperation with NGOs. MOFA has been organizing the NGO-MOFA regular meetings between the Government and NGOs which are held to have close exchange of views. At the field level, consultations have been put in place since 2002 in the "ODA Embassies" whereby embassy, JICA, JBIC and NGOs promote dialogue between the Government and NGOs.

Box I-5. Increasing the Visibility of Japanese Aid with the Hinomaru and ODA Logo

    In some instances other donor countries and international organizations possess specialized knowledge and abilities, or have influence that Japan does not. Through collaboration with other donor countries or international organizations in such cases, assistance can be provided in a mutually complementary fashion and with greater effectiveness. For example, Japan and the United States have long engaged in partnership in the health and water sectors, and in September 2005 their respective foreign ministers agreed to cooperate in achieving the MDGs and to establish the US-Japan Strategic Development Alliance.

    In recent years, some middle-income developing countries like China, India and Thailand, which had been the recipients of assistance earlier, are now providing various assistances to other countries. At OECD-DAC, which is the principal international forum for discussions concerning development assistance, member countries are increasingly aware of the need to take into account the assistance of non-DAC countries since this could promote effectiveness of assistance and alleviate poverty in developing countries to achieve the MDGs. While the assistance of these new donors such as China and India is large enough to have an impact on development assistance of DAC members, an overall picture of the assistance of these new donors cannot be easily perceived. In international venues such as DAC, Japan has argued for the necessity to improve transparency of the assistance by non-DAC donors and ascertain their overall impact, and to see that this assistance is provided in accordance with international rules.

    Since the latter half of the 1990s, there has been a growing trend toward "aid coordination," in which several donor countries and international organizations share development strategies with the governments of developing countries and cooperate by harmonizing their assistance methods. Japan is also actively participating in this framework formed by donors and is working to improve the effectiveness of assistance.

    Efforts to impart Japan's identity in the assistance should not be confined to affixing the Japanese national flag, ODA logo, and other publicity. It has also become more important to clearly convey Japan's ideas on assistance, whereby Japanese voices can be heard, by those staff working on assistance activities who possess Japan's special knowledge when participating in aid coordination with donor countries and international organizations.

(3) Efforts to Reduce Costs

It is important to take steps to improve the efficiency of projects through cost reductions and the Government implements such measures on a continuous basis by setting appropriate targets and road maps. With regard to technical cooperation projects, for example, the period of dispatch of long-term experts is carefully examined and optimized, and expenses for the procurement of equipment and consulting services are reduced. As a result, for nearly all cost items in the current medium-term targets, the targeted reduction levels were surpassed. Efforts to reduce costs associated with grant aid included the establishment, in FY2006, of the Grant Aid for Community Empowerment. This program of integrated support covers areas like schools, roads, water supply, and medical care in order to provide support to develop the overall capabilities of communities that face threats to life and safe living due to poverty, hunger, and disease. With this scheme, construction projects are carried out according to local specifications and designs by using local contractors and local equipment and materials. In addition, the expansion of the number of bidding participants and the multiplication of contracts are expected to enhance competition with a view to substantially reducing costs, thereby achieving greater efficiency, and providing flexible and rapid support. By using this scheme, projects are implemented by setting quantitative cost reduction targets appropriate to the geographical area and development sector.

Strengthening Check Functions

In order to implement ODA appropriately and fulfill the obligation of accountability to the public, it is extremely important to set in place a system for checking each ODA process. With this recognition in mind, the Japanese Government is working to improve transparency, reinforce evaluation and monitoring, and strengthen measures against fraud.

(1) Improving Transparency

As stated in the ODA Charter, it is increasingly important to obtain the understanding and support of the public toward ODA through broad and prompt disclosures of information concerning the policy formulation of ODA and the evaluation relating to its implementation, as well as by ensuring full transparency and communicating public relations.

    For this purpose, the Government disseminates information by means of web site, TV public relations programs, an ODA newspaper, and an e-mail magazine concerning ODA, and by holding town meetings. Since FY2005 the Government has also provided the ODA On-Demand-Delivery Lecture.26 In addition, the Government dispatches people from the private sector—known as ODA Citizen Monitoring Program—to directly observe the sites where ODA is actually taking place (a total of 90 people participated in FY2005, and 555 persons were dispatched to 25 countries as monitors between 2000 and 2005) (see Part II, Chapter 2, Section 5 for details).

(2) Using Evaluations

In order to implement ODA more effectively and efficiently, it is important to properly understand the implementation process and the effects of ODA accurately and make improvements as necessary. To this end, ODA-related ministries and agencies, including MOFA, and implementing agencies, JICA and JBIC, are working together to conduct monitoring and evaluation. In recent years, evaluation is conducted not only on individual projects, but also on sectors, aid modalities, Country-based Assistance Programs and Priority Issues. To ensure objectivity, evaluations by the third party including experts are widely carried out. Joint evaluations with recipient countries and other donor countries are also conducted. Bearing in mind that ex-post evaluations of grant aid were not sufficient, comprehensive evaluations of grant aid were introduced by MOFA in FY2005 and the third party viewpoints were incorporated in the evaluation from FY2006. These efforts will continue in order to improve the functions of the PDCA cycle described in the beginning of this section.

(3) Strengthening Measures to Prevent Fraud

Because Japan's ODA is financed by the taxes paid by the Japanese people and aims at improving the socioeconomic development and well-being of recipient countries, misuse of the funds provided through ODA must be avoided. To prevent misconduct and corruption, the Government and the implementing agencies have ensured the transparency of the project selection and implementation process such as expansion of the disclosure of bidding-related information for each form of assistance concerning the procedures for procurement and other matters. In cases where misconduct occurs strict action is taken against the contractors involved and measures are implemented to prevent a reoccurrence (see Part II, Chapter 2, Section 5 for details).

    Thus the system of providing Japan's ODA has been enhanced and strengthened by addressing the increasing interest in ODA in Japan and various issues by region and sector. These efforts lead to effective use of the various kinds of technical knowledge and human resources possessed by Japan so as to contribute to solving such global issues as infectious disease and environmental issues. Furthermore, there is now a stronger awareness that effective use of ODA to improve the international environment surrounding Japan constitutes an important policy instrument when Japan grapples with important diplomatic issues.

    The Government of Japan intends to continue to do its utmost to further enhance the capacity to formulate and plan Japan's ODA, to make possible the implementation of effective assistance and to earn the understanding and support of the Japanese people through this series of reforms. These constant efforts are important in order to ensure that Japan's ODA is in accordance with the priority issues of diplomatic policy, that each assistance project accurately addresses the diverse needs of developing countries and is consistent with mutual interests, and that it is high in quality.

Column I-3 Nobel Peace Prize Awarded to Professor Muhammad Yunus and Grameen Bank