Japan's Official Development Assistance White Paper 2006

Main Text > Part II ODA DISBURSEMENTS IN FISCAL YEAR 2005 > Chapter 2 Details about Japan's ODA > 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

Japan believes that for poverty reduction, it is indispensable not only to implement measures to reduce poverty or to provide assistance in the areas of social development that could directly influence the poor, but also to promote sustainable growth through economic growth. In this regard, Japan places importance on the improvement of economic and social infrastructure that provides the foundation for the development of developing countries. For example, Japan is committed to the improvement of economic infrastructure in transport, communication, and other areas, such as roads, ports, and airports, in order to expand exchanges between urban and rural areas, ensure security against disasters, and to promote trade and investment from overseas. Japan's commitment also includes the improvement of infrastructure that contributes to the fulfillment of basic social services such as education, health care, safe water, shelter, and better access to hospitals and schools. Japan also works on the improvement of small-scale infrastructure such as agricultural and fishery markets, fishery ports, and agricultural roads, aiming to vitalize local economies.

    In the area of transport, Japan committed ¥216.9 billion in FY2005, among which ¥194.2 billion represented yen loans and ¥22.7 billion accounted for grant aid. Further, for ¥56.5 billion in yen loans for transportation infrastructure and other projects, the Special Terms for Economic Partnership (STEP) have been applied.13

    As a specific example of projects to improve infrastructure, as part of STEP projects, in FY2005 Japan carried out assistance for the Nhat Tan Bridge (Viet Nam-Japan Friendship Bridge) Construction Project (I), a STEP project in Viet Nam. In the backdrop, Viet Nam has been undergoing an increase of road traffic due to economic development in recent years. However, delays in road improvement work have led to chronic traffic congestion in the city of Hanoi. This project is designed to build a bridge over Song Hong (Red River) and other facilities as part of the plan to complete the ring road around the city. This road is expected to ease the traffic congestion in the center of the city by providing detours for vehicles that would otherwise pass through the city. The road would also help enhance the development of the city's northern areas covering an airport and newly developed sites by directly connecting them to the established urban areas in the south in the city. Further, for Hanoi which is due to mark the 1,000th anniversary of its status as the national capital in 2010, the project is expected to serve as a monument of the city's development and a symbol of Japan-Viet Nam friendship. Also in FY2005, Japan provided Laos with grant aid for the Project for the Improvement of the Vientiane No.1 Road (1st Phase). This road serves as the arterial frame in the capital's (Vientiane country borough) inner-city road network of Vientiane. The road furthermore connects the city center to two major gateways to the country: Wattay International Airport and a bridge over the River Mekong connecting to Thailand. About 60% of foreign visitors to Laos enter through this Mekong bridge, while over 10% come via this airport. However, the Vientiane No.1 Road currently suffers extremely poor conditions. The road fails to cater to safe and smooth transportation, economic and social activities, and daily life activities due to the progress of deterioration of the road surface and an unrestricted mixture of different types of vehicles running on the lanes. The plans of the project encompass the improvement of the Vientiane No.1 Road and its drainage facilities. Progress expected from these efforts includes the ensuring of safe transportation, enhancement of the arterial route, improvement of the transportation of people and goods, vitalization of economic and social activities, and improvement of the health and sanitary environment along the road based on the improved drainage functions.

    In order to establish infrastructure in developing countries based on appropriate development policies and to maintain and operate them in sustainable manners, 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 equipment necessary for management and operation, and development research.

    Recently, attention is being paid to effects created by the establishment of infrastructure on the purpose of poverty reduction and the research for infrastructure has been actively made by donors including international organizations and Japan. For example, a set of Guiding Principles has been drawn up to outline what should be practiced by donors, as a result of discussion on infrastructure held since 2003 by the Network on Poverty Reduction, an affiliate of the Organisation for Economic Co-operation and Development-Development Assistance Committee (OECD-DAC). Specifically, the principles present suggestions on assistance for infrastructure aimed at poverty reduction such as planning and implementing such assistance in accordance with the development plans of the recipient countries and improving access by the impoverished population to infrastructure services. In 2005 JBIC compiled Connecting East Asia: A New Framework for Infrastructure, jointly with the World Bank and the ADB as a result of their study on the establishment of infrastructure in East Asia. This report gives a positive evaluation to the establishment of infrastructure based on its contribution to the economic growth and poverty reduction in East Asia. The report also suggests measures to respond to future needs for infrastructure. Also in this context, Japan and the UNDP jointly studied the importance of infrastructure in terms of poverty reduction in developing countries. The joint study was compiled in a report entitled Making Infrastructure Work for the Poor, released in March 2003.14 This joint study reviews the experiences of establishing small-scale infrastructure in Zambia, Senegal, Bangladesh, and Thailand. The study thereby demonstrates how the establishment of infrastructure can contribute to poverty reduction and human security. Furthermore, in May 2006 Japan and the World Bank jointly hosted the meeting of the Annual Bank Conference on Development Economics (ABCDE) in Tokyo. The overall theme of the meeting was "Rethinking Infrastructure for Development;" thereupon participants discussed the establishment of infrastructure in relation to economic growth and poverty issues. Representatives from Japan introduced their study results based on the country's experiences in Asia, while experts from various countries examined the role infrastructure plays in development.

Column II-3 The Project on Mekong Riverbank Protection Works with the Use of Japanese Traditional Methods