Part III Assistance for Each Region
Based on the economic and social backgrounds of the problems faced by each region, Japan strives to support solving the problems in developing countries through providing more prioritized support and development cooperation in a strategic, effective, and flexible manner while coping flexibly and responding to rapidly changing situations. Part III will introduce such assistance for each region.
1. East Asia
East Asia consists of a variety of nations, which include countries such as the Republic of Korea and Singapore, which have already attained high economic growth and transitioned from the category of aid recipients to that of donors; least developed countries (LDCs) such as Cambodia and Laos; countries such as Indonesia and the Philippines, which still show large income disparities domestically despite dramatic economic growth; and countries, such as Viet Nam, which are shifting to a market-driven economy. Japan has close relationships with these countries in all aspects of politics, economy, and culture, and the stability and development of the region also significantly impacts the security and prosperity of Japan as well. From this perspective, Japan is engaging in development cooperation that responds to the diverse socio-economic circumstances of East Asian countries and to the changes in the type of development cooperation required.
In 2020, many countries in East Asia were dealt great societal and economic blows by the worldwide spread of COVID-19 and the restrictions on movement of people and goods on a global scale. For this reason, Japan has provided a total of approximately ¥23 billion worth of health and medical equipment and technical cooperation for 10 East and Southeast Asian countries, and further granted a total of approximately ¥295 billion in financial assistance loans for five countries based on the economic impact. Moreover, through the “Initiative on Overseas Loan and Investment for ASEAN” (see the Project Introduction Column below for details), loans and investments for private sectors regarding areas such as quality infrastructure and support for small and medium-sized businesses were expanded, contributing to the economic revitalization of ASEAN countries.
In addition, Japan will fully support the establishment of the ASEAN Centre for Public Health Emergencies and Emerging Diseases in order to strengthen ASEAN’s capabilities to respond to infectious diseases by dispatching experts and providing trainings through JICA’s technical cooperation. Through the support to the Centre, Japan will contribute to strengthening ASEAN’s capabilities to respond to public health emergencies and prepare, detect, and respond to emerging infectious diseases (see “ODA Topics” for details). Additionally, Japan has contributed a further $1 million to the “COVID-19 ASEAN Response Fund,” which aims to develop vaccines and procure medical supplies, on top of its contribution through the ASEAN Plus Three (APT) Cooperation Fund.
Initiative on Overseas Loans and Investment for ASEAN
Private-Sector Investment Finance (2020 – 2022)
In order to meet the enormous demand for development funds in the Association of Southeast Asian Nations (ASEAN)*1 region, “a center of growth open to the world,” it is becoming increasingly important to mobilize private sector funds in addition to public funds such as grants and loans from donors and Multilateral Development Banks (MDBs). In this context, Japan launched the “Initiative on Overseas Loans and Investment for ASEAN” at the Japan-ASEAN Summit Meeting held in November 2019.
Under the Initiative, Japan has announced that JICA is ready to provide $1.2 billion through Private Sector Investment Finance in three fields, namely quality infrastructure, improving financial access and empowering women, and facilitating green investment*2, in collaboration with other MDBs and private financial institutions, with the aim of mobilizing a total of $3 billion from public and private sectors over the three-year period from 2020 to 2022.
As a specific effort of the Initiative, in November 2020, JICA decided to invest up to $35 million in a fund established by Blue Orchard Finance Ltd.*3, which is working to improve financial access for micro, small, and medium-sized enterprises (MSMEs) mainly in ASEAN countries. While the spread of COVID-19 has dealt a severe economic blow to ASEAN countries, this support is expected to meet the pressing financial needs of women-owned businesses and MSMEs, improve their financial standing, and ultimately contribute to the economic development of ASEAN countries.
The Initiative is an effective framework for promoting Japan-ASEAN cooperation in a concrete manner in line with the “ASEAN Outlook on the Indo-Pacific (AOIP).” Going forward, Japan will continue to contribute to sustainable development in the ASEAN region and promote the realization of the AOIP, which shares fundamental principles with the “Free and Open Indo-Pacific (FOIP),” while making use of the Initiative and other tools for mobilizing private sector funds.
*1 See on Note 1 for the ASEAN member states.
*2 Investing in solar and hydroelectric power generation, energy conservation projects, and other initiatives, as a part of climate change measures.
*3 A Swiss fund management company with expertise in managing funds that invest in and provide loans to microfinance institutions.
Japan has contributed to the remarkable economic growth of East Asia by implementing development cooperation that combines ODA with trade and investment, including the development of socio-economic foundations through quality infrastructure investment, support for the development of institutions and human resources, promotion of trade, and revitalization of private investment. In recent years, Japan aims to further enhance open regional cooperation and integration while sharing basic values, to promote mutual understanding, and to maintain consistent regional stability. Therefore, Japan strives to proactively provide assistance in areas such as disaster risk reduction, the environment and climate change, health and medical care, the rule of law, and maritime safety, in parallel with the assistance for developing infrastructure. Japan is also working to promote mutual understanding through large-scale youth exchanges, cultural exchanges, and projects to spread the Japanese language.
In order for Japan and other East Asian countries to achieve further prosperity, it is important to assist Asia to become “a center of growth open to the world.” Accordingly, Japan is providing assistance to strengthen Asia’s growth and to expand domestic demand in each country.
... Support for Southeast Asia
The countries of the Association of Southeast Asian Nations (ASEAN) Note 1 are located on Japan’s sea lanes and have strong economic ties with Japan, as approximately 13,000 Japanese companies (business establishments) have been operating in the region as of October 2018. The ASEAN region is of great importance for Japan both on the political and economic fronts. ASEAN declared the establishment of the ASEAN Community comprised of the “Political-Security Community,” “Economic Community,” and “Socio-Cultural Community” in 2015 and has made efforts to strengthen connectivity and narrow the development gaps within the region. Moreover, the “ASEAN Outlook on the Indo-Pacific (AOIP)”* announced by ASEAN in June 2019 advocates the basic principles of the rule of law, openness, and freedom, sharing many fundamental principles with the “Free and Open Indo-Pacific (FOIP)” promoted by Japan. In his ASEAN policy speech on a visit to Indonesia in January 2020, Foreign Minister Motegi expressed Japan’s full support for the AOIP and announced further cooperation. On Prime Minister Suga’s visits to Viet Nam and Indonesia in October 2020 and at the ASEAN Summit Meeting in November of that year, it was agreed to bring Japan-ASEAN cooperation into shape in the areas outlined in the AOIP (see also “ODA Topics”).
In light of ASEAN’s efforts, Japan has provided assistance through ODA in a range of areas such as infrastructure development, the rule of law, maritime safety, disaster risk reduction, health and medical care, and peacebuilding, based on the pillars of strengthening connectivity and narrowing the development gaps. To date, Japan’s ODA for ASEAN countries has amounted to a total of approximately ¥18.5536 trillion. Additionally, based on the increasing importance of utilizing the financial power of private funds and Multilateral Development Banks in the area of development, the “Initiative on Overseas Loans and Investment for ASEAN” was launched at the 22nd Japan-ASEAN Summit Meeting in November 2019. Furthermore, in December of that year, Foreign Minister Motegi announced that the Initiative aimed to mobilize $3 billion from the public and private sectors over three years in the fields of quality infrastructure investment, access to finance and support for women, and green investment, including through a total of $1.2 billion in overseas loans and investment by JICA (see “Project Introduction Column” for details on the Initiative). As of December 2020, nine projects have been adopted, with loans and investment totaling ¥29.07 billion.
With regard to strengthening connectivity, Japan does not only develop physical infrastructure but also aims to realize “vibrant and effective connectivity,” which maximizes infrastructure productivity through institutional reform and technology transfer to local people. At the ASEAN Summit Meetings held in 2016, the “Master Plan on ASEAN Connectivity 2025”* was adopted, succeeding the “Master Plan on ASEAN Connectivity,” which aimed to strengthen “physical connectivity,” “institutional connectivity,” and “people-to-people connectivity” in the region. Based on the new Master Plan, Japan is supporting the strengthening of ASEAN connectivity, and in May 2019, Japan signed the Japan-ASEAN Technical Cooperation Agreement to encourage the strengthening of ASEAN unity and centrality. In addition to implementing cyber security training in January 2020 (see “Project Introduction Column” for details) as the first project based on the Technical Cooperation Agreement, Japan also implemented trainings related to port management, logistics, and marine plastic waste management during FY2020. Moreover, at the Japan-ASEAN Summit Meeting in November 2020, Japan announced the “Japan-ASEAN Connectivity Initiative,” declaring tangible support for the strengthening of ASEAN connectivity centered around ¥2 trillion worth of ongoing land, air, and sea corridor connectivity infrastructure projects, as well as intangible support in the form of human resource development for 1,000 people contributing to strengthened connectivity over the next three years.
In terms of infrastructure development, Japan is working to promote “quality infrastructure investment” that is in conformity with international standards, based on its past experiences of assisting Southeast Asian countries, in accordance with the “G20 Principles for Quality Infrastructure Investment” adopted at the G20 Osaka Summit in June 2019. One such example is the “Metro Rail Transit (MRT) Line 3 Rehabilitation Project” being conducted in the Philippines. The line, opened in 2000, was originally managed and maintained by Japanese corporations and had been operating stably. However, since 2012, when non-Japanese companies assumed the duty of maintaining and managing services for MRT-3, services were not properly conducted, partly due to budget shortages. As a result, the tracks and rolling stocks deteriorated and consequently operation troubles frequently occurred. In light of this, at the request of the Government of the Philippines, rehabilitation began on the MRT-3 using Japanese technology, which have seen advances in operating speeds and reductions in operating intervals. With the help of Japan’s latest technology, the project aims to enhance safety and comfort, thereby achieving wider ridership and alleviating serious traffic congestions in the National Capital Region.
Moreover, in regard to the field of disaster risk reduction and disaster health management, Japan began the Project for Strengthening the ASEAN Regional Capacity on Disaster Health Management (ARCH) in 2016 as a way of creating a framework to realize the ASEAN Declaration on “One ASEAN, One Response: ASEAN Responding to Disasters as One” adopted at the ASEAN Ministerial Meeting on Disaster Management held in 2014. The ASEAN Leader’s Declaration (ALD) on Disaster Health Management was adopted in 2017 which clearly incorporated the need for the activities engaged in through ARCH. In this context, ARCH has made many achievements, including holding regional coordination drills for disaster health management teams from ASEAN countries and developing standard operation procedures relating to disaster health management. Through co-hosted trainings with the World Health Organization (WHO), Japan is also working together to strengthen coordination capacities in the field of disaster health management in the ASEAN region in accordance with global standards for disaster health management teams, not limited to the standards within the region.
Furthermore, with regard to area of human resources development, Japan announced, at the Japan-ASEAN Summit Meeting in November 2018, that it would newly train human resources of approximately 80,000 people with a view to the next five years, including in the digital sector such as AI, under the “Industrial Human Resource Development Cooperation Initiative 2.0.” Japan will also provide support to Thailand to establish Kosen schools (Colleges of Technology) unique to the Japanese education system in Thailand and implement cooperation to provide Kosen education that meets the same standards as those of Japan in order to develop industrial human resources in the ASEAN region. In addition, Japan has been implementing the “Innovative Asia” initiative, which supports the circulation of competent human resources in Asian countries including ASEAN through studying abroad at Japanese graduate schools or other institutions, internships at Japanese companies, etc., with the aim of promoting innovation in Asia including Japan. Over the five years from FY2017 to FY2021, Japan has been accepting people from all across Asia under this project. Going forward, Japan will continue to actively support the development of industrial human resources in Asia.
With regard to the Mekong region Note 2, which has distinct, great potential for development among the ASEAN countries, the Mekong-Japan Summit Meeting is held annually. Around once every three years, it is held in Japan, where the leaders adopt an aid policy framework toward the region. In October 2018, the 10th Mekong-Japan Summit Meeting was held in Tokyo, during which the Tokyo Strategy 2018 for Mekong-Japan Cooperation was adopted. This Strategy sets out the direction for future cooperation between the Mekong region and Japan and establishes the following three pillars for advancing cooperation: (i) vibrant and effective connectivity, (ii) people-centered society, and (iii) realization of a Green Mekong. Additionally, the “Mekong-Japan Initiative for SDGs toward 2030” was announced at the 11th Mekong-Japan Summit Meeting held in Bangkok, Thailand in November 2019. This Initiative will make use of quality infrastructure investment in line with international standards so as to draw out the Mekong region’s potential in an optimal manner, while focusing its efforts on the three priority areas of (i) environmental and urban issues, (ii) sustainable natural resource management and utilization, and (iii) inclusive growth (see “ODA Topics” for details). As a concrete effort based on the Initiative, Foreign Minister Motegi announced the “KUSANONE Mekong SDGs Initiative” at the 13th Mekong-Japan Foreign Ministers’ Meeting in July 2020, declaring support for the realization of the SDGs and socioeconomic development deeply rooted in the communities of the Mekong region countries. As part of this Initiative, Japan provided at least ¥1 billion through Grant Assistance for Grass-Roots Human Security Projects in FY2020 to the five countries in the Mekong region, and will continue to carry on with this initiative.
Furthermore, at the 12th Mekong-Japan Summit Meeting held in November that year, as Mekong region countries were dealt economic blows by COVID-19, which caused a lack of development financing, Japan announced the “Five Points of Cooperation,” including the “Mekong SDGs Investment Partnership,” in order to support the implementation of development projects by private companies and others: (i) promotion of loans and investment for the private sector, (ii) Grant Assistance for Grass-Roots Human Security Projects that pervades through small communities, (iii) cooperation concerning the rule of law, (iv) cooperation concerning the ocean, and (v) cooperation concerning strengthening supply chains. Through the “Mekong SDGs Investment Partnership,” Japan will promote the formation of overseas loan and investment projects in the Mekong region. Moreover, Japan’s efforts focus on the strengthened connectivity critical for economic growth in the region, steadily implementing projects for this purpose under the Tokyo Strategy 2018, such as the development of the Sihanoukville Port in Cambodia, functional improvements for the Vientiane International Airport in Laos, development of the East-West Economic Corridor Highway in Myanmar, construction of the Ho Chi Minh urban railway in Viet Nam, and construction of the Bangkok MRT (Red Line) in Thailand. In 2021, the 13th Mekong-Japan Summit Meeting is to be held in Japan, where Mekong-Japan cooperation is expected to deepen further.
With regard to Myanmar, which was particularly engaged in its advance toward democratization in the Mekong region, Japan provided a wide range of assistance to the country in order to back up the rapid process of its reform efforts based on the following three pillars: (i) improve the living standards of the people of Myanmar including ethnic minorities, (ii) support legal and judicial systems development and human resources development, and (iii) develop infrastructure. In particular, Japan was providing cooperation in both the public and private sectors to develop the Thilawa Special Economic Zone (SEZ) located in the suburbs of Yangon, Myanmar’s largest city, while the Government of Japan contributed to the development of the surrounding infrastructure through ODA. As of October 2020, 113 companies from around the world (of which 56 were Japanese companies) entered the SEZ, while 93 companies (of which 50 were Japanese companies) started their operations. This was a successful example which showed how Japan’s “quality infrastructure investment” earns trust from the world (the content of this paragraph is based on the information at the time of writing).
Furthermore, in order to promote peace with ethnic minorities, Japan has been providing support for reconstruction and development in the southeastern part of Myanmar, where a ceasefire has been achieved. This includes the development of housing and basic infrastructure, as well as technical cooperation on agriculture. In the Rakhine State located in the western part of Myanmar, from which more than 700,000 people have been displaced since 2017, Japan has been providing humanitarian aid such as food, nutrition, healthcare, water and hygiene, and education for internally displaced persons and residents of nearby communities. In the northern part of the state, Japan has focused on supporting small-scale infrastructure and vocational training as a means of facilitating an environment which enables the displaced persons to return to their home. Japan has been also working on development assistance such as the improvement and maintenance of roads, strengthening electric power, and building schools across the whole state.
Project for Improvement of Public Bus Operation in Phnom Penh
Technical Cooperation Project (January 2017 – February 2022)
In Phnom Penh, the capital of Cambodia, recent economic development and rapid urbanization have resulted in the serious deterioration of the urban environment, which is mainly caused by worsening traffic congestion. There are growing concerns among citizens in Phnom Penh about the increasing number of private vehicles due to population and income growth, as well as the growing number of fatalities due to traffic accidents. Therefore, in order to provide an alternative means of transportation for citizens to private cars, the Phnom Penh Capital Administration established the City Bus Authority in September 2014. However, when the bus service was first launched, ridership remained stagnant due to lack of public recognition and low user satisfaction as there were no timetables or bus stops. In addition, bus crews did not have sufficient driving skills or safety training, and all routes were operated by second-hand buses, resulting in frequent vehicle breakdowns and accidents.
In order to improve the situation, this project was launched in January 2017. A team of experts from a joint venture led by the International Development Center of Japan set out to improve the operations of the City Bus Authority.
They first worked on improving the bus service. Activities were implemented to lead to improve service, such as creating route maps, developing bus location applications and providing real time location information, improving bus stop design, and pilot testing bus priority signals. The expert team also provided driving skills training and safety education to drivers, and inspection and maintenance guidance to mechanics. Furthermore, Japan provided 80 new buses through grant aid, and the City Bus Authority has now expanded its service to 181 buses covering 13 service routes. With this improved operational service, bus ridership has increased from 6,000 passengers to 30,000 passengers per day in the two years since July 2017.
As of December 2020, the bus service has been suspended to prevent the spread of COVID-19. However, the expert team is working remotely from Japan to provide guidance on regular cleaning and disinfection of bus vehicles and equipment and thorough infection prevention measures for the bus crew in order to resume operations. In Phnom Penh, it is a hope that this safe and reliable means of transportation for citizens will be available again as soon as possible.
... Relations with China
ODA to China has played a significant role in strengthening Japan and China relations in recent years as well as in the past. During then Prime Minister Abe’s visit to China in October 2018, the Government of Japan announced the termination of Japan’s provision of new ODA to China and the promotion of a new stage of bilateral cooperation, such as holding dialogues and personnel exchanges in the area of development. This has been announced under the recognition that it is time for Japan and China to work shoulder to shoulder for contributing to the region and international community’s prosperity as equal partners. With this announcement, the adoption of new ODA to China has ended in FY2018, and all ongoing multi-year projects that have already been adopted will be concluded by the end of FY2021.
In 2019, a series of events were held in China to celebrate the 40th anniversary of Japan’s ODA to China, reflecting on and summarizing its path up until then. These included a commemorative reception and a development cooperation press tour, with visits to places such as the China-Japan Friendship Hospital, which was established through Japan’s cooperation.
In recent years, ODA to China has been limited to areas with genuine needs for cooperation, such as cross-border pollution and food safety, which directly affect the lives of the Japanese people. The assistance was carried out as technical cooperation (disbursements of ¥358 million in FY2019) Note 3 and Grant Assistance for Grass-roots Human Security Projects (completed in FY2018) Note 4.
With regard to technical cooperation, for example, Japan is implementing projects to tackle environmental problems focused on air pollution including PM2.5, which has raised concerns about its impact on Japan, and projects to support the drafting and revision of civil laws, civil and administrative procedure laws, etc. in China that contribute to facilitating the business activities of Japanese companies operating in China. Furthermore, as a new form of cooperation that takes into account the economic development of China, Japan has recently been providing cooperation in which its costs are borne by China. For example, China bears the costs related to support such as the “China-Japan Project for Improvement of the Diagnosis of Asbestos-related Cancer,” which began in 2018, and the promotion of disaster mitigation education in the areas afflicted by the Lushan earthquake which occurred in Sichuan Province in 2013 (“the Project for Promotion and Capacity Development of Disaster Mitigation Education in Sichuan Province”).
- *ASEAN Outlook on the Indo-Pacific (AOIP)
- An initiative to create a vision of even closer cooperation in the Indo-Pacific and strengthen ASEAN-centered regional architecture. It is not aimed at creating new mechanisms or replacing existing ones; rather, it is intended to enhance ASEAN’s community building process and to better face challenges arising from the current and future regional and global environments. It shares many fundamental commonalities with the “Free and Open Indo-Pacific (FOIP)” promoted by Japan.
- *Master Plan on ASEAN Connectivity 2025 (MPAC 2025)
- This is the action plan for strengthening ASEAN connectivity that was adopted at the ASEAN Summit in 2016 as the successor document to the “Master Plan on ASEAN Connectivity” which set 2015 as its goal year (adopted in 2010). It is positioned as a part of “ASEAN 2025: Forging Ahead Together,” which was adopted in 2015. The document stipulates the five strategic objectives of “sustainable infrastructure,” “digital innovation,” “seamless logistics,” “regulatory excellence,” and “people mobility,” and presents priority initiatives under each of the strategies.
- Note 1: The 10 ASEAN member states are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam (however, Singapore and Brunei are not ODA recipients).
- Note 2: A region including the five countries of Cambodia, Laos, Myanmar, Thailand, and Viet Nam.
- Note 3: Track records of technical cooperation in recent years are as follows: ¥3.296 billion (FY2011), ¥2.527 billion (FY2012), ¥2.018 billion (FY2013), ¥1.436 billion (FY2014), ¥806 million (FY2015), ¥500 million (FY2016), ¥404 million (FY2017), ¥400 million (FY2018), ¥358 million (FY2019)
- Note 4: Track records of Grant Assistance for Grass-Roots Human Security Projects in recent years are as follows: ¥843 million (FY2011), ¥288 million (FY2012), ¥284 million (FY2013), ¥85 million (FY2014), ¥107 million (FY2015), ¥29 million (FY2016), ¥9.95 million (FY2017), ¥23 million (FY2018)