Japan's Official Development Assistance White Paper 2010
2. Collaboration with Private Sector Resources and OOF
Given the vast development needs of developing countries, ODA funds alone are not sufficient for meeting these needs. ODA and other public funds make up a declining share of the flow of funds to developing countries, 70% of which now consist of private sector resources. Under these circumstances, it is becoming important that ODA and private sector resources are integrated to effectively meet the development needs of developing countries, including removing bottlenecks to private sector resources through ODA.
The Government of Japan will resume JICA’s Private-Sector Investment Finance (Note 9), by which support will be provided through investments and loans for the development programs implemented in developing countries by companies and other private actors. In addition, the Government will draw on the preparatory studies based on company proposals and studies for promoting partnership with BOP businesses, and support the development of businesses driven by private-sector needs.
These initiatives, prompted by ODA, are expected to increase private sector resources to developing countries and support their growth through spillover effects. Furthermore, coordination with OOF (official flows other than ODA), such as the Japan Bank for International Cooperation (JBIC) and the Nippon Export and Investment Insurance (NEXI), will be strengthened, and private sector resources will be further harnessed.
Notes:
(9) Private-Sector Investment Finance is a program which provides necessary funds as either investments or loans for development cooperation activities undertaken by the private-sector in developing countries, which are expected to be highly effective for development but have difficulties in attracting funds from existing private financial institutions. The program, which had been handled since 1960 by the former Overseas Economic Cooperation Fund (OECF), is now implemented by JICA. In accordance with the Reorganization and Rationalization Plan of Special Public Institutions, since 2002, the program’s investments and loans were provided exclusively for the projects which were approved before the end of FY2001 or those which were extended. It was then decided that the program will be re-launched within FY2010 at the 6th Ministerial Meeting on the Deployment of Integrated Infrastructure Systems on December 10, 2010. (The Ministerial Meeting, chaired by Chief Cabinet Secretary Sengoku, was held following the Cabinet decision on September 7, 2010 “Holding of the Council on the Realization of the New Growth Strategy,” for the purpose of facilitating cross-national, politics-led, and quick decision-making in providing support for the efforts made by private companies operating in the field of infrastructure systems.)