Japan's aid policies and institutions

Abstract

In Japan, there are various ministries and agencies that are involved in economic cooperation, but it is the Foreign Ministry which coordinates all the necessary elements. Japan sees this economic cooperation as one of the major pillars of its international contribution, hence we have integrated foreign aid policy into the broader perspectives of our overall foreign policy. We have been fortunate enough to be able to garner support and understanding from the Japanese public in conducting our Official Development Assistance (ODA). Japan started its activity in this field 40 years ago, joining in the framework of the Colombo Plan, through which technical cooperation began. Japan also started economic cooperation activities to make reparation to Asian countries after World War II. We have been carrying out a wide variety of aid activities, which are categorized into three schemes; namely: grant assistance for basic human needs, such as education and health; technical cooperation for human resources development; and the so-called 'yen loans', for the construction of economic and social infrastructures. The total volume of Japan's official development assistance in 1992 was US$11.15 billion, which was the largest among donor countries. About a quarter of it was distributed through international organizations, about 40% as loan aid, 15% as grant aid and 20% as technical cooperation (see Figures 1 and 2). The yen loan projects are picked up and decided by the Foreign Ministry, together with the Ministry of Finance and other ministries, and then the loan is provided by OECF, an implementation agency for yen loans. Grant assistance projects are picked up and decided by the Ministry of Foreign Affairs, and implemented directly by the Foreign Ministry. As for technical cooperation, again, projects are picked up by the Ministry of Foreign Affairs, and then the Japan International Cooperation Agency (JICA) implements them. Recipients of Japan's ODA now include more than 150 countries and territories all over the world (see Figure 3). Of these, the largest recipient at present is Indonesia, the second China and the third is the Philippines. I had the chance to visit Indonesia and the Philippines this February, as the deputy head of a high-level mission on Economic and Technical Cooperation, to conduct a policy dialogue about Japan's assistance. Figure 3 shows some aspects of Japan's cooperation. Yen loans have contributed to 31% of Indonesia's electric power and 12% of its railways, 20% of Thailand's electric power, including the electrification of 12,000 villages, 5% of the Philippines' electric power and drinking water for 8.2 million