Section 4 Formulation and Implementation of the Development Cooperation Policy

This section reviews measures for enhancing the efficiency and effectiveness of ODA in three parts, which are: “Formulation and implementation of development cooperation policy,” “Increasing public participation,” and “Requirements for the implementation of strategic and effective assistance.”

1. Formulation and Implementation of Development Cooperation Policy

(1) Formulation of Consistent Development Cooperation Policy

In August 2006, the Ministry of Foreign Affairs (MOFA) established the International Cooperation Bureau, reorganizing the Economic Cooperation Bureau. The International Cooperation Bureau is in charge of the overall planning and formulation of ODA policies, while also playing a central role in inter-agency coordination within the government. In July 2009, the International Cooperation Bureau underwent organizational reform to strengthen the ODA policy planning function of MOFA. The Aid Policy Planning Division, which had been overseeing the planning and formulation of ODA policy, and the Grant Aid and Technical Cooperation Division and the Loan Aid Division, which had been overseeing aid schemes, were consolidated, and the Country Assistance Planning Divisions were strengthened. This organizational reform made it possible to provide loan aid, grant aid, and technical cooperation in a unified manner through three Country Assistance Planning Divisions under the newly established Development Assistance Policy Coordination Division.

In addition, efforts are being made to further increase the collaboration among divisions related to bilateral cooperation and multilateral cooperation (through international organizations), strengthen the strategic nature of international cooperation, and implement more effective ODA. Moreover, by sharing information and views among related agencies, the knowledge and experience of those agencies are being reflected in ODA policies.

(2) Partnership between the Government and Implementing Agencies

MOFA works with JICA, the implementing agency, to enable the prompt implementation of ODA reflecting various types of policies such as the Priority Policy for International Cooperation that MOFA revises every fiscal year.

In October 2008, JICA which had been an agency for implementation of technical cooperation and grant aid, became a comprehensive ODA implementing agency that provides technical cooperation, loan aid, and grant aid, in an integrated manner, merging the section of the overseas economic cooperation of the Japan Bank for International Cooperation (JBIC), which had been in charge of providing ODA loans and other development loans. A portion of the work related to implementation of grant aid that had been handled by MOFA was also transferred to JICA.

(3) Strengthening Policy Dialogue

Japan holds close policy dialogue with developing countries for sharing mutual recognition and understanding in order to implement more effective development assistance. As Japan implements ODA with emphasis on requests from developing countries, from the perspective of offering supports that encourage development promoted by the recipient country's own efforts, Japan attempts to harmonize those requests with Japan's ODA policy, thereby gaining a thorough understanding of the development policy and assistance needs of respective developing countries by conducting policy consultations with relevant governmental officials of those countries, at a stage prior to receiving a formal request.

(4) Strengthening Functions at the Field Level

In order to strengthen policy dialogue with the governments of developing countries, the Country-based ODA Task Force(Note 1), consisting of a Japanese diplomatic mission (Embassy of Japan), local offices of JICA and other agencies, has been established in each recipient country of Japan's ODA, in principle. The Task Force also participates in decision-making process on ODA policies such as Country Assistance Policies and Rolling Plans after gaining good understanding on the development needs of the recipient countries. In addition, the Task Force conducts consultations regarding policies with the governments of developing countries. Furthermore, while working in cooperation with other donor countries and international organizations, the Task Force makes recommendations related to collaboration and review in terms of assistance methods, as well as conducts consideration and selection of candidate projects for implementation by Japan's ODA.

Furthermore, responding to the situation in which aid coordination* gains momentum in the field of developing countries along with the work of formulating and reviewing the Poverty Reduction Strategy Paper (PRSP)*, Japan has been assigning coordinators for economic cooperation at some diplomatic missions abroad since FY 2006 to collect information and conduct research related to aid coordination. In addition, Japan has also established a system to disseminate information on Japanese ODA policies to other countries and make recommendations in the field.

(5) Partnership with Various Actors

Japan engages in international cooperation in partnership with NGOs, private companies, universities, local governments, international organizations, and other donor countries.

| Partnership with NGOs

Japanese NGOs implement high-quality development cooperation activities in various fields including education, medical care and health, rural development, refugee assistance, and technical guidance on mine clearance in developing countries and regions. They also provide prompt and effective emergency humanitarian assistance in the sites affected by conflict or natural disasters such as earthquakes and typhoons. In this way, Japanese NGOs are attuned to different local situations in developing countries and are able to carefully tailor responses to the assistance needs of the local people. Thus, Japanese NGOs can provide assistance at the grass-roots level, reaching out to local needs that are difficult to be addressed through assistance by governments and international organizations. Furthermore, Japanese NGOs are indispensable players in the field of international cooperation in realizing the “Visibility of Japanese Aid.” MOFA regards Japanese NGOs as important partners in implementing ODA projects, and has strengthened MOFA-NGO partnership through holding opinion exchanges and dialogues regularly. The Government of Japan advocates the promotion of partnerships with NGOs in the Development Cooperation Charter and other policies. Specifically, Japan strives to strengthen partnerships based on the three pillars of: (i) Financial support for the development cooperation activities of NGOs; (ii) Support for the capacity building of NGOs; and (iii) Holding of dialogues with NGOs on a regular basis.

Year after year, Japanese NGOs have played increasingly active role in giving policy recommendations (advocacy) on major challenges in international cooperation and diplomacy, such as development, environment, health, disaster risk reduction, gender issues, human rights, and disarmament.

a. Financial Cooperation for NGO Projects

Japan cooperates in a variety of ways to enable Japanese NGOs to smoothly and effectively implement development cooperation activities and emergency humanitarian assistance projects in developing countries and regions.

| Grant Assistance for Japanese NGO Projects

MOFA provides funding for the socio-economic development projects that Japanese NGOs implement in developing countries through Grant Assistance for Japanese NGO Project scheme. In FY2013, 57 organizations utilized this framework to implement 106 projects in 33 countries and one region in such fields as education, human resources development, medical care and health, vocational training, and rural development. The scale of this financial assistance has almost doubled over the last five years and was approximately ¥6 billion in FY2013. In addition, as of November 2014, 48 NGOs are members of the Japan Platform (JPF), an emergency humanitarian aid organization established in 2000 through a partnership among NGOs, the government, and the business community. The JPF utilizes ODA funds contributed by MOFA as well as donations from the private sector and individuals to carry out emergency humanitarian assistance, including distribution of living supplies and livelihood recovery, for example, when a major disaster occurs or a vast number of refugees flee due to conflict. In FY2013, approximately ¥3.1 billion of ODA funds was disbursed for the projects implemented by JPF member NGOs in 15 countries, including assistance for the victims of flood disaster in North India, Luzon in the Philippines and Southeast Asia, assistance for ethnic minority returnees in Myanmar, humanitarian assistance in response to the conflict in Syria, emergency assistance in South Sudan, and humanitarian assistance in Afghanistan and Pakistan.

| NGO Project Subsidies

MOFA provides subsidies to Japanese NGOs that conduct investigations for project formulation and post-project evaluations, hold seminars and workshops in and outside of Japan, and implement other activities related to socio-economic development projects. The subsidies equal one-half of the total project cost and no more than ¥2 million. In FY2013, a total of 12 organizations utilized these subsidies to implement activities, such as project formulation studies, ex-post evaluations, and seminars and workshops both within and outside of Japan.

| JICA Partnership Program and other JICA activities

In some cases, JICA's technical cooperation projects are outsourced to the private sector, including Japanese NGOs, making use of the expertise and experience of NGOs, universities, and a variety of other organizations. Furthermore, as part of its ODA activities, JICA conducts “JICA Partnership Program (JPP)”* to outsource projects that have been proposed by NGOs, universities, and local municipalities that directly contribute to the improvement of the lives of local residents in developing countries. In FY2013, JPP provided funds for 250 projects, which were implemented in 47 countries.

b. Establishing Better Environment for NGO Activities

Further measures to support Japanese NGO activities other than financial assistance include programs for establishing better environments for NGO activities. The objective of these programs is to further strengthen the organizational arrangements and project implementation capabilities of Japanese NGOs, as well as developing their human resources. Specifically, MOFA carries out the following four programs.

| NGO Consultant Scheme

In the context of rising concern over the international cooperation, an increasing number of young people have been seeking employment with NGOs, leading actors of international cooperation by citizens. However, many Japanese NGOs, either because of financial constraints or staffing shortages, cannot afford to train young workers. This program, called “NGO Intern Program,” commissions Japanese NGOs to accept and train young people interested in international cooperation in order to open up the door for potential NGO workers, and aims to expand develop multilayered international cooperation activities of NGOs through the enlargement of the workforce, In FY2013, 19 interns were accepted into NGOs through this program.

| NGO Intern Program

In the context of rising concern over the international cooperation, an increasing number of young people have been seeking employment with NGOs, leading actors of international cooperation by citizens. However, many Japanese NGOs, either because of financial constraints or staffing shortages, cannot afford to train young workers. This program, called “NGO Intern Program,” commissions Japanese NGOs to accept and train young people interested in international cooperation in order to open up the door for potential NGO workers, and aims to expand develop multilayered international cooperation activities of NGOs through the enlargement of the workforce, In FY2013, 19 interns were accepted into NGOs through this program.

| NGO Overseas Study Program

This program offers overseas practical training for mid-career personnel from Japanese NGOs for the period of approximately one month to a maximum of six months. The training is divided into two types, namely, “Practical training” and “Training enrollment,” which makes this program unique in that it enables the NGOs to which the trainees belong to formulate an independent training plan based on the NGOs' needs. Upon returning to Japan, trainees and their affiliated NGOs must leverage the fruits of the training in the activities of the said NGOs, thereby circulating the benefits back to the organizations.

| NGO Study Group

The Government of Japan supports NGOs in organizing study group meetings to build up the capabilities and expertise of NGOs. Specifically, MOFA commissions an NGO to conduct activities such as studies, seminars, workshops, symposiums, and present reports and recommendations regarding specific improvement measures with the cooperation of other NGOs. This program is designed so that NGOs themselves strengthen their organizations and capacities by accumulating experience through above activities. In FY2013, study groups were organized on four themes: “Gender and NGO”; “Post-MDGs and International NGOs”; “Survey on NGO Partnerships from the Perspectives of Companies and Individuals”; and “Capacity-building of Rural NGOs in International Cooperation Activities.” The reports and deliverables of the activities are available on MOFA's ODA website.

In addition to MOFA's supports, JICA also provides a variety of training programs for NGO staff members, which include the following:

1. “Training for organizational strengthening through human resources development for NGOs”
   Supports the organizational strengthening of NGOs through the human resources development of NGO staff who will conduct activities both domestically and internationally.
2. “Basic Seminar on Project Management”
   Equips NGO personnel with approaches for planning, designing, and evaluating projects in developing countries using Project Cycle Management (PCM)*.
3. “Sending Advisors for Institutional Strengthening of NGOs in Japan”
   Dispatches advisors with knowledge and experience relevant to domestic public relations activities, and funds procurement and accounting in order to strengthen NGOs' abilities in these fields.
4. “Sending Advisors Overseas for Strengthening NGO Activities”
   Dispatches advisors to give guidance on strengthening the necessary capabilities for effective implementation of overseas projects.

c. Dialogue and Partnership with NGOs

| NGO-Ministry of Foreign Affairs Regular Consultation Meetings

To forge a stronger partnership and promote dialogue between NGOs and MOFA, this meeting was launched in FY1996 as a forum for sharing information on ODA and regularly exchanging opinions on measures for improving partnerships with NGOs. Currently, in addition to the general meeting held once a year, there are two subcommittees which are the “ODA Policy Council” and the “Partnership Promotion Committee.” In principle, both subcommittees are convened three times respectively a year. At the ODA Policy Council, opinions are exchanged on general ODA policies, while at the Partnership Promotion Committee, the agendas focus on support for NGOs and partnership policies.

| NGO-Embassies ODA Consultation Meeting

Since 2002, the NGO-Embassies ODA Consultation Meetings have been held to exchange ideas and opinions with Japanese NGOs that work in developing countries. The meetings have been held in 34 countries, including Nepal and Sri Lanka, to exchange views on the efficient and effective implementation of ODA among the staff of Japanese Embassies, aid implementation agencies and NGOs.

| NGO-JICA Consultation Meeting, NGO-JICA Japan Desk

Based on equal partnership with the NGO, JICA holds the NGO-JICA Consultation Meeting to promote the realization of more effective international cooperation as well as the public understanding towards and their participation in international cooperation, with JICA and NGOs working as equal partners. JICA has also established NGO-JICA Japan Desks in 20 countries outside of Japan to support the field activities of Japanese NGOs and to strengthen projects conducted jointly by NGOs and JICA.

---

1. Note 1: Excluding some countries under the direct management of JICA Headquarters.

| Partnership with Private Business

With the globalization of the economy, inflows of private finance into developing countries are currently about 2.5 times larger the amount of inflows of ODA. Therefore, it is increasingly important to promote contribution by private finance to development to address financing needs for the development in developing countries. In responding to such a situation, the Japanese government encourages the private investments through the following public-private partnerships.

The Japanese government proposes an idea that private investment should take a “people-centered” approach in order to lead to sustainable development in developing countries. In short, through partnerships with the private sector that utilize ODA, the government intends to promote “people-centered investment,”* which will lead to employment creation; the formulation of countermeasures against disaster risk reduction, climate change, and environmental issues; and the capacity building of local people.

A policy to promote this “people-centered investment” was unveiled for the first time by the Minister for Foreign Affairs Fumio Kishida at the OECD Ministerial Council Meeting under the chairmanship of Japan in May 2014. Following this, Japan has continued to make efforts to publicize the policy in order to obtain the international community's understanding and endorsement by offering its details at the Japan-ASEAN Ministerial Meeting in August and the Japan-ASEAN Summit Meeting as well as the G20 Summit in November.

a. Public-Private Partnership (PPP) for boosting growth

Japanese private companies' various projects conducted in developing countries can bring multiple impacts to these countries, by creating employment opportunities in the local context, augmenting tax revenue, expanding trade and investment, contributing to the acquisition of foreign currency, and transferring Japan's superior technology. Aiming to facilitate activities by these private companies in developing countries, in April 2008, Japan announced the “Public-Private Partnership for Growth in Developing Countries,” a new policy to strengthen partnerships between ODA and Japanese companies. Through this, the government receives consultation and proposals from private sectors related to their activities, which are conducive to economic growth and poverty reduction in developing countries, as well as public-private cooperation projects together with ODA. For example, in Indonesia, a Japanese company installed an independent solar power generation system at a primary school using the Grant Assistance for Grassroots Human Security Projects. By extending the electricity usage hours at the primary school and the surrounding area, the project enhanced the learning environment for primary education and improved lives in the surrounding area. Other than this, there is a case in which a project to utilize technical cooperation to invite a team of Mexican physicians to Japan for training of sophisticated medical technology (cardiac catheterization techniques) that had been developed by a Japanese company.

Meanwhile, Corporate Social Responsibility (CSR) activities, in which private companies aim to proactively contribute to resolving issues facing local communities they enter, and BOP business*, which aims to contribute to improving lives and resolving social issues through businesses focusing on the low-income population, are receiving attention. In order to promote cooperation between the CSR activities and BOP businesses of Japanese private companies and the activities of local NGOs, preferred slots are created to proactively adopt projects jointly implemented by local NGOs and Japanese private companies. Japan actively supports cooperation within non-public sectors and authorized 11 such projects in FY2013. In addition, Japan works on Public-Private Partnership (PPP)* that aims to implement highly public projects more efficiently and effectively through public-private cooperation, and provides consistent assistance from the planning stages of the project, such as institutional development and human resources development through technical cooperation, utilizing Private-Sector Investment Finance or ODA loans.

Furthermore, at the Millennium Development Goals (MDGs) Follow-up Meeting held in June 2011, Japan announced the establishment of the “MDGs Public-Private Partnership Network.” This network assists the smooth implementation of business and social contribution activities in developing countries by Japanese companies, and promotes their activities contributing to the achievement of the MDGs through providing them, for example, with: information on the development needs of recipient countries; assistance in creating networks through introducing domestic and overseas NGOs, international organizations, and universities; and workshops on different themes such as health and the post-2015 development agenda.

In addition, international organizations, such as the United Nations Development Programme (UNDP) and the United Nations Children's Fund (UNICEF), draw on their extensive experience and expertise in developing countries to promote inclusive businesses* by Japanese companies. For example, UNDP experts gave advice to Japanese companies promoting the cultivation of organic cotton in India by utilizing the Japan-UNDP Partnership Fund. As a result, this project to support the transition to organic farming was selected for Business Call to Action (BCtA), an international initiative that encourages businesses that simultaneously achieve corporate profits and development objectives.

| Cooperation Preparatory Surveys for PPP Infrastructure Projects and BOP Businesses

JICA implements two types of preparatory survey based on proposals from the private sector in order to encourage Japanese companies with excellent technologies, knowledge and experience, and have an interest in overseas expansion, to participate in the field of development. Specifically, this is a survey scheme based on proposals from the private companies aiming to support their plan formulation in which JICA calls for proposals widely from the private sector for a feasibility study on PPP infrastructure projects and BOP businesses, respectively, and commissions a feasibility study* to the companies that submitted such a proposal. Thus far, JICA has selected 55 PPP infrastructure projects such as expressway, and water and sewerage system projects, and 83 BOP business projects in the areas of health and medical care and agriculture. Some of these projects were authorized as Private-Sector Investment Finance projects and ODA loan projects. Through this scheme, JICA will utilize the specialized knowledge, funds, and technologies of private companies to the socio-economic development of developing countries as well as support the overseas expansion of private companies.

| Partnership with Japanese Small and Medium Enterprises (SMEs) and Other EntitiesInfrastructure Projects and BOP Businesses

For the future growth of the Japanese economy, incorporating the rapid economic growth of emerging and developing countries is of crucial importance. In particular, although Japanese SMEs possess numerous world-class products and technologies, etc., due to insufficient human resources, knowledge and experience, many businesses have not embarked on overseas expansion. On the other hand, it is expected that such products and technologies of Japanese SMEs and other entities will be useful for the socio-economic development of developing countries.

In response to these circumstances, MOFA and JICA proactively support the overseas expansion of Japanese SMEs and other entities using ODA. Specific examples include: surveys that take into account the establishment of development assistance projects that make use of a product, technology, etc. of an SME or other entities (Needs Survey); surveys for collecting basic information and formulating project plans necessary for the overseas business of an SME (a business undertaken by direct entry into the country) that contributes to resolving the issues of developing countries (SME Partnership Promotion Survey); surveys for studying the feasibility of using an SME's product or technology in a developing country, based on a proposal from an SME, etc. (Feasibility Study with the Private Sector for Utilizing Japanese Technologies in ODA Projects); and surveys to verify ways for enhancing a product or technology's compatibility with a developing country and thereby disseminate the product and technology, based on a proposal from an SME, etc. (Verification Survey with the Private Sector for Disseminating Japanese Technologies).

These projects aim to achieve both the development of developing countries and the activation of Japanese economy by utilizing Japanese SMEs' excellent products and technologies through ODA. In FY2012 and FY2013, MOFA and JICA supported surveys and the Verification Survey with the Private Sector for Disseminating Japanese Technologies by 155 SMEs. These projects have yielded various outcomes. For example, approximately 30% of SMEs secured new clients and approximately 10% of SMEs started local production about one year after the implementation of Project Formulation Surveys.

Approximately 60% of SMEs are conducting ongoing “Verification Survey with the Private Sector for Disseminating Japanese Technologies” one year after the implementation of the project formulation survey. As many participating companies and other participants have expressed their requests regarding the further expansion of such initiatives, Japan will continue to proactively support the overseas expansion of SMEs and other entities through ODA.

Furthermore, Japan provides funding to import supplies necessary for the socio-economic development of developing countries at no cost to them, and utilizing this fund, Japan implements the Non-Project Grant Aid for Provision of Japanese SME's Products in which Japan provides Japanese SME's products to developing countries.

The Non-Project Grant Aid for Provision of Japanese SME's Products does not only support socio-economic development in developing countries through the provision of Japanese SMEs' products to developing countries based on their requests and development needs, but it also strongly supports the overseas expansion of Japanese SMEs by raising the profile of these SMEs' products and creating sustained demand for them.

Additionally, to assist the development of global human resources required by SMEs, the “Private-Sector Partnership Volunteer System”* in which staff from SMEs are dispatched to developing countries as Japan Overseas Cooperation Volunteers (JOCV) or Senior Volunteers (SV) while keeping their affiliation to their companies was established in 2012. Through this system, Japan proactively supports SMEs in building networks within developing countries.

Similarly, as an initiative contributing to the development of global human resources required for the overseas expansion of Japan's SMEs, the Ministry of Economy, Trade and Industry (METI) supports such a move taken by SMEs by launching the new Global Internship Program to dispatch young business persons and co-hosting a symposium on fostering global human resources with JICA in November 2012. Additionally, in February 2014, MOFA and METI launched the “Fast-Pass System for Overseas Expansion”* to facilitate SMEs' access to the aforementioned programs.

| Private-Sector Investment Finance

Private financial institutions are often reluctant to finance projects in developing countries due to the high risk involved, among other reasons. Considering such a situation, Japan uses JICA Private-Sector Investment Finance* (PSIF) to directly invest in and provide loans for, and thereby, assist the development projects implemented by private companies in developing countries. The “Reorganization and Rationalization Plan for Special Public Corporations” announced in December 2001 stipulated that in principle no investments and loans would be made, except for projects authorized before the end of FY2001. However, due to the increased need to respond to new demand for high development impact through the private sector engagement, JICA resumed on a pilot basis the provision of PSIF to private companies. For example, PSIF was provided for an industrial human resources development project in Viet Nam and a microfinance project for the poor in Pakistan in March 2011. JICA fully resumed PSIF in October 2012. To date, a total of five investment and loan agreements have been signed, including for the Thilawa Special Economic Zone (Class A Area) Development Project in Myanmar. In June 2014, in order to reduce the exchange rate risk of Japanese companies participating in overseas infrastructure projects, improvements were made to JICA's PSIF scheme to allow loans to be denominated in the local currency, as well as in yen as before.

| Collaboration Program with the Private Sector for Disseminating Japanese Technology for the Economic and Social Development of Developing Countries

This public offering-type program aims to deepen the understanding of excellent products, technologies, and systems of Japanese companies as well as examining the feasibility of their application to the development projects in developing countries. JICA calls for proposals from private companies, and the implementation of selected projects is commissioned to the company, which made the proposal. This program brings an effect that the project and the private company's subsequent execution of the project can contribute to resolving the challenges of developing countries. From the standpoint of private companies, expected effects include enhanced profile of their own technologies, products, and systems in the relevant country, specific expansion of highly public businesses, and the formation of human networking with government officials in developing countries.

In FY2013, 15 proposals and 12 proposals were selected in the first and second call for proposals, respectively. Contents of the proposed projects extend beyond individual products or technologies in sectors such as health and medicine, agriculture, energy, and the environment, and also cover diverse areas from Japanese systems, such as postal service and nutritionist certification, to complex systems, such as traffic control and disaster risk reduction.

| Infrastructure System Exports*

The Japanese government holds the Ministerial Meeting on Strategy relating Infrastructure Export and Economic Cooperation to support infrastructure system exports by Japanese companies and discuss key issues of external economic cooperation, and implement it in a strategic and efficient manner. The Strategy for Exporting Infrastructure Systems was established in May 2013 and was revised in June 2014. Based on the strategy, MOFA supports infrastructure development in developing countries by improving and utilizing the various schemes of economic cooperation, including ODA loan, grant aid, and technical cooperation. At the same time, MOFA also leverages Japan's technologies and know-how in partnership with the relevant ministries and agencies, JICA, JBIC, NEXI-related organizations, private companies, local governments, among other entities. Infrastructure orders in 2013 doubled to 285 from 137 in the previous year. As far as the amounts known are concerned, a significant increase from approximately ¥3.2 trillion in the previous year to approximately ¥9.3 trillion was recorded. (Researched by the Cabinet Secretariat)

b. Improving ODA Loan Arrangements

ODA loans are expected to provide Japan's advanced technologies and know-how to developing countries, thereby improving people's living standards. Simultaneously, it is also required that Japan incorporates the growth of emerging economies including those in Asia, which have a particularly close relationship with Japan, also leading to the vitalization of the Japanese economy. The arrangements for ODA loans need further improvements for the scheme to become more attractive to both developing countries and Japanese private companies.

Japan unveiled the “Improvement Measures for the Strategic Use of ODA Loans” in April 2013 and announced follow-up improvements to the ODA loan arrangements in October 2013. First, in April's improvements, past priority areas were consolidated into “environment” and “human resources development,” and then “disaster risk reduction” and “health and medical care” were added to create four priority areas. Furthermore, loans in these four areas were given a greater concessional character (more relaxed requirements through lower interest rates and longer repayment periods). Japan has also decided to make further use of ODA loans for developing countries, which have income levels equal to or higher than those of middle income countries. Additionally, improvements were made to the Special Terms for Economic Partnership (STEP) scheme that was introduced to promote the “Visibility of Japanese Aid” through leveraging Japan's advanced technologies and know-how as well as transferring technologies to developing countries. These improvements included expanding the scope of application of STEP and lowering interest rates. At the same time, Japan has established the Stand-by Emergency Credit for Urgent Recovery (SECURE)(Note 2) and taken additional measures. Following October's improvements, Japan introduced the Equity Back Finance (EBF) ODA loan(Note 3) and the Viability Gap Funding (VGF) ODA loan(Note 4) to appropriately meet the huge infrastructure demand in Asia in particular. These instruments are designed to support, as needed, the development and application of effective measures to promote the steady formulation and implementation of PPP infrastructure projects by recipient governments.

In June 2014, Japan decided to initiate full use of the “Sector Project Loan” that provides comprehensive ODA loans for multiple projects in the same sector, etc. Japan also decided to further accelerate ODA loan implementation by integrating the pre-qualification and project tender processes for ODA loan projects, which can expect the involvement of Japanese companies.

| Partnership with Universities and Local Governments

Japan utilizes the practical knowledge accumulated by universities, as well as local governments to implement more effective ODA. JICA implements technical cooperation and promotes ODA loan projects jointly with universities to enable them to work on the issues that developing countries face, utilizing the specialized knowledge possessed by universities. In addition, JICA works in cooperation with local governments to facilitate more active international cooperation projects carried out by local governments through the collaborative utilization of their operational know-how on urban infrastructure and other insights, as well as through the enhancement of the quality of ODA projects and implementation of training of human resources, who will engage in development cooperation.

In March 2013, utilizing the framework of the JICA Partnership Program (JPP), the Japanese government announced its policy to revitalize Japan at the regional level through the international cooperation efforts of local governments as a special framework for the invigoration of local economies.

| Partnership with Local Governments and NGOs of Developing Countries

Partnership with local governments and NGOs in developing countries leads to the strengthening of not only the economic and social development of developing countries, but also of the capacity of civil society and NGOs in those countries. Japan supports economic and social development projects implemented by these development cooperation partners mainly through the Grant Assistance for Grass-Roots Human Security Projects. This financial cooperation has received high praise in developing countries as a precise and rapid form of assistance that provides direct benefits at the grass-roots level, including the construction of schools, upgrading of basic medical equipment at hospitals, and digging of wells.

| Partnership with International Organizations and Other Countries

In recent years, various countries as well as aid organizations and groups have been working to coordinate in the formulation and implementation of their development cooperation policies. This trend is based on the perspective of aiming at improving the quality of development cooperation and effectively conducting development cooperation in order to achieve international development goals such as MDGs, based on the Paris Declaration and the Accra Agenda for Action (AAA), Busan Partnership for Effective Development Cooperation, and the items agreed upon by the Global Partnership for Effective Development Co-operation (GPEDC). Currently, working groups have been formed for various development sectors such as health and education in many recipient countries, and program-type assistance is being implemented in accordance with the sector development strategy of the recipient countries. Japan participates in many of these programs, such as the reform of local administration in Tanzania. Furthermore, the Joint Cooperation Strategy (JCS) to Bangladesh was formulated in June 2010 with the participation of 18 international organizations, following the joint strategic partnership for Bangladesh to support the country's poverty reduction strategy (PRS) formed in 2005 between Japan, the World Bank, the Asian Development Bank (ADB), and the UK's Department for International Development (DFID). Through these initiatives, Japan promotes cooperation and collaboration for the implementation of more effective and efficient cross-sectoral development cooperation (which uses a link beyond different sectors such as the health and education fields). Likewise, as specific cooperation with the Multilateral Development Banks (MDBs), the Enhanced Private Sector Assistance for Africa (EPSA) was set up in 2005 together with the African Development Bank (AfDB), and to date cooperation of over $1 billion in ODA loans has been provided to ensure the smooth flow of funds to Africa's private sector and encourage private sector investment for the improvement of roads and electricity conditions, etc. At the G20 Los Cabos Summit (Mexico) in 2012, Japan announced the provision of a new $1 billion ODA loan under this initiative. In January 2014, Prime Minister Abe pledged to double this amount to $2 billion in his policy speech on Japan's diplomacy towards Africa delivered in Ethiopia. Furthermore, in 2012, together with the Inter-American Development Bank, Cofinancing for Renewable Energy and Energy Efficiency (CORE) was set up as a co-finance framework with a vision of providing a maximum of $1 billion worth of cooperation over five years.

Recently, Japan has also been proactive in cooperation and collaboration with international organizations and other donor countries. Amid the decreasing trend of the ODA budget of all major donors, it is becoming increasingly important to cooperate and collaborate with international organizations and other donors to effectively utilize the limited ODA budgets of each country for the development of developing countries.

In recent years, Japan has further deepened its cooperation and collaboration with the United States. When U.S. Vice President Joseph Biden visited Japan in December 2013, the two countries announced the launch of a new, regular, senior-level Japan-U.S. Development Dialogue in the “Fact Sheet on United States-Japan Global Cooperation.” The major focus of this cooperation included humanitarian assistance/disaster relief, Southeast Asia, the Pacific, Africa, and empowerment of women. In February 2014, the First Japan-U.S. Development Dialogue was held, and the two countries discussed bilateral cooperation for a wide range of development challenges. When President Barack Obama visited Japan in April of the same year, the two countries unveiled the “Fact Sheet: U.S.-Japan Global and Regional Cooperation,” which set out concrete coordination efforts in Southeast Asia, Africa, and other parts of the world. Since then, the two countries have successfully carried out concrete collaboration on supporting the activities of women entrepreneurs in Africa and UN Women's programs for the creation of Indian communities safe for women. Japan considers that strengthening Japan-U.S. development cooperation will expand the breadth of Japan-U.S. relations and contribute to the further advancement of the Japan-U.S. alliance.

Members of the Development Assistance Committee (DAC) of the OECD have been taking a leading role in carrying out development cooperation in the international community. In recent years, however, non-DAC members, namely “emerging donor countries” such as China, India, Saudi Arabia, and Brazil have increased the significance of their influence in dealing with the development issues of developing countries underpinned by their funding ability. This trend also appears within the framework of the G20—consultation on development issues is now conducted, not only by the developed countries but also by a mixture of countries including emerging and developing countries. Japan facilitates discussions by encouraging the participation of emerging donor countries in various meetings to ensure that their development cooperation does not conflict with other international efforts.

In April 2014, the First High-Level Meeting of the Global Partnership for Effective Development Co-operation was held in Mexico City, Mexico. The participants shared the view that solving the development issues of developing countries requires inclusive efforts participated not only by the governments of developed and developing countries, but also by a variety of organizations and groups engaged in development, including civil society organizations (CSOs), the private sector, and parliaments. The participants also discussed the effective use of developing countries' domestic funds to finance development projects in addition to ODA, by improving their taxation systems, for example, in order to achieve the post-2015 development agenda. Furthermore, the participants also discussed the contribution of South-South cooperation and triangular cooperation to development, and the importance of making effective use of private funds and of the catalytic role of ODA for this purpose (e.g., use of ODA to develop infrastructure in developing countries, and thereby attracting private investment).

Similarly, the Fifth Asia Development Forum* was held in Hanoi in September 2014 to have in-depth discussions on the future implementation of development cooperation based on the Asian experience on the theme of “Challenges and Strategies towards Sustained Growth of Asia.”

---

1. Note 2: A scheme in which Japan signs ODA loan agreements in advance with developing countries where natural disasters are expected to occur in the future, making the swift lending of funds for recovery possible if a disaster does occur.
2. Note 3: If a Japanese company is among the implementers of a PPP infrastructure project, which the government of a developing country, state enterprise, and other parties have a stake in, then an EBF ODA loan is provided for the investment portion of the government of a developing country in the Special Purpose Company (SPC), the entity responsible for the public works project in the developing country.
3. Note 4: In principle, if a Japanese company has a stake in a PPP infrastructure project implemented by the government of a developing country, then a VGF ODA loan is provided to help finance the VGF that the developing country provides to SPC, in order to secure the profitability expected by SPC.

---

<< Previous Page　　　Next Page >>

Main Text | Statictics and Reference Materials | Stories from the field | Master Techniques, From Japan to the World - | ODA Topics