japan’s approach to asia:
health and development

hiromi murakami · national graduate institute for policy studies
kiyoshi kurokawa · national graduate institute for policy studies

84

abstract

JAPAN’S LONG-STANDING FOCUS ON ASIA

Since the mid-1950s, Japan has been continuously
committed to supporting economic development in Asia. Thisis especially true today, as Japan faces the challenges of an aging
society, budget constraints, and a declining population. Asia
always has been strategically important to Japan from both thesecurity and economic standpoints. Japan’s contribution to
Asia is comprised chiefly of development assistance, followedby private investments which benefit the region. Along withdramatic economic development, overall health conditionsin Asia have improved by raising awareness of public health,including water hygiene, sanitation, vaccination, nutritionlevels, better access to hospitals, and improving the qualityof health services. This path resembles Japan’s own experiencein that overall economic growth has had a greater impact
on health improvement than direct health assistance. As
Asia becomes more important as a growing market, Japan’s
assistance continues to emphasize building economic bases
for those countries still suffering from underdevelopment in
Asia.

Japan’s Overseas Development Assistance (ODA)1
policy has long prioritized Asia and building Asia’s economic
infrastructure, with a focus on particular regions. Historically,
Japan’s focus on Asia has meant reparations for damage
caused during WWII: early development assistance as a formof reparations began in Burma, the Philippines, Indonesia,
and South Vietnam, and as a form of sub-reparations forother Asian nations in the 1950s-1960s.2 For nearly six
decades, Japan’s ideological reasoning in offering aid has been
to build economic foundations. In addition, Japan has alsoemphasized economic diplomacy, using regional and bilateral
ODA channels as a means of strengthening economic
relationships with resource-rich countries, primarily in Asia.

HARVARD ASIA QUARTERLY 14.4 (2012) | Japan’s Approach to Asia

1

2

Japan’s ODA contributions ranked first (on an aggregate amountbasis) from 1990 to 2000, though it has been declining since.
Japan currently ranks fifth after the US, UK, Germany, andFrance (as of 2010). See the Ministry of Foreign Affairs’ (MOFA)
website for more details.
Japan paid reparations to Burma, the Philippines, Indonesia, andSouth Vietnam; and economic assistance was provided as subreparations to countries including Thailand, Korea, Singapore,and Malaysia. See Shinji Takagi, “From Recipient to Donor:
Japan’s Official Aid Flows, 1945 to 1990 and Beyond,” Princeton
Essays in International Finance 196 (1995): 1-40.

Because Japan’s postwar recovery and rapid economic growth
were supported in part by aid and financial assistance fromother nations and multilateral organizations, it is generally
understood among Japanese that investing in economic
infrastructure leads to economic development and that
populations also benefit from such growth; this mindset
encourages investment and contributes to the improvementof social infrastructure, including in healthcare.
Japan’s emphasis on Asia was established during
the Cold War when other nations, including the US, also
distributed foreign aid for security and geopolitical reasons.
Since, Japan’s ODA has been linked with strategic security(i.e., stability and energy security) and economic (i.e., market
access) interests. In particular, priority is given to nations
with natural resources,3 potential markets, and essential
trade partners; further importance is attached to the USJapan alliance. For example, one of the largest recipientsof Japan’s cumulative contributions is Indonesia, where
natural resources are abundant, followed by Thailand, thePhilippines, and China, all of which are growing markets.
While ODA aid to China has been sharply cut since 2003,4
with China becoming a competitor in aid diplomacy, it
has increased to recipients such as India and Vietnam. The
Japanese government is also taking risks with ODA projects
to encourage further Japanese corporate investments. For
instance, a top recipient of Japanese loans in 2011 wasVietnam, mostly for infrastructure-building projects. The
Japanese private sector is now investing heavily in Vietnam,
as companies desire to secure access to its growing market.
However, ODA contributions alone are not sufficientto grow economies in recipient nations – direct foreign
investments are also necessary. As for the US-Japan alliance,
Afghanistan and Iraq have the highest priority in terms of
3

4

In addition to Asia, the Middle East also receives proportional
Japanese ODA for energy security interests. See “DAC2a ODA
Disbursements,” Organisation for Economic Co-operation andDevelopment, accessed November 8, 2012, http://stats.oecd.
org/Index.aspx?datasetcode=TABLE2A.
See “Japan’s Official Development Assistance Charter,” MOFA,
August 29, 2003, accessed November 5, 2012, http://www.
mofa.go.jp/policy/oda/reform/revision0308.pdf.

Figure 1: Japanese ODA Grants/Loans, 2010 (US$ million)
Source: MOFA, “ODA Hakusho 2011” (ODA White Paper 2011), 2012,
accessed November 19, 2012, http://www.mofa.go.jp/mofaj/gaiko/oda/
shiryo/hakusyo/11_hakusho_sh/pdfs/s2-2.pdf, 170-4.

grant aid, chiefly because of Japan’s commitment to the USJapan security alliance, with Washington’s request for help
with the reconstruction of these nations damaged by the war
on terror.5
Although the overall ODA budget continues todecline, the focus on infrastructure is likely to continue asJapanese bureaucracy and agencies continue to concur on theprinciple of giving aid to encourage sustainable economic
growth. While Japan’s ODA Charter of 2003 emphasized thecontribution of ODA to Japan’s security and prosperity, theOECD Development Assistance Committee (DAC) peerreview committee voiced the criticism that Japan chiefly built
roads and bridges, but did little to empower communities
and reduce poverty.6 In response to such criticisms, the56Japan’s extensive commitments were made to help with postwar
reconstruction in Afghanistan and Iraq. In 2002, Japan pledged
6.5 billion yen in aid to Afghanistan over 2.5 years; in 2003,
Japan pledged US$1.5 billion in grants to help rebuild Iraq andUS$3.5 billion in loans.
Criticisms include that Japan should emphasize the primaryobjective of ODA as the development of the recipient country
and ensure that narrower national interests do not override thisobjective. For further details, see “Peer Review of Japan,” OECD
Development Assistance Committee, 2004, accessed November

Hiromi Murakami, PhD, is Assistant Professor at the National Graduate Institute for Policy Studies (GRIPS), where she
researches economic developmental models, state-industry relations, and US-Asia relations. Also associated with the HGPI
Global Health Policy Center, she advises policy research and analysis. Prior to joining GRIPS, as Vice President (Asia) at the
Economic Strategy Institute she oversaw research on Asian political economy and security and conducted a number of projects
on Asia. She holds an MBA in international business from St. Mary’s College, California and a PhD in international relations
from the Johns Hopkins School of Advanced International Studies.
Kiyoshi Kurokawa, MD, is an Academic Fellow of the National Graduate Institute of Policy Studies, Chair of the Health andGlobal Policy Institute, and Co-Founder and Chair of Impact Japan. Professor Emeritus of the University of Tokyo, he wascommissioned to chair the Fukushima Nuclear Accident Independent Investigation Commission (NAIIC) by the National
Diet of Japan. He was formerly Professor of Medicine at UCLA, University of Tokyo, and Tokai University, President of the
Science Council of Japan, and Science Advisor to Prime Ministers Abe and Fukuda. He was recently chosen as one of the “100Top Global Thinkers” in 2012 by Foreign Policy and awarded the AAAS Award for “Scientific Freedom and Responsibility” forhis leadership of the NAIIC. His blog can be read at www.kiyoshikurokawa.com/en/.
Japan’s Approach to Asia | HARVARD ASIA QUARTERLY 14.4 (2012)85

Figure 2: Japan’s Health Assistance Through Bilateral Aid(Commitment-Basis, US$ million)
Source: MOFA, “ODA White Paper 2011.”

Figure 3: The Gap between Public Preference
and Actual ODA Spending (2010)

Source: Cabinet Office, Government Public Relations Office, “Summary ofSpecial Survey of Public Opinion on International Cooperation in the Field
of Health and Healthcare,” 2010; MOFA, “ODA White Paper 2011.”

2010 revision of ODA policy stated that it would focus on
reducing poverty, investing in peace building, and supporting
sustainable economic development.7
Japan’s ODA has always preferred bilateral rather thanmultilateral assistance, and giving loans rather than grants. In
a basic sense, Japan’s assistance is divided into “bilateral ODA”
aid (80 percent of total ODA), conducted between Japan andthe recipient country, and “multilateral ODA” aid (20 percent
of total ODA),8 undertaken by multilateral organizations
such as the United Nations and other international agencies.
Bilateral ODA dominates Japan’s assistance and takes threedifferent forms: loan assistance (“yen loans”), grant aid, andtechnical cooperation. Of the 2011 ODA budget of 1.58
trillion yen, approximately 60 percent was distributed inbilateral yen loan projects (a majority of which concerned
economic infrastructure), 6.8 percent in aid grants, and 12
7

8

86

15, 2012, http://www.oecd.org/dataoecd/43/63/32285814.pdf.
“Enhancing Enlightened National Interest: ODA Review
Final Report,” Ministry of Foreign Affairs of Japan, June 2010,
accessed November 15, 2012, http://www.mofa.go.jp/policy/
oda/reform/pdfs/review1006_report.pdf.
These figures are 2009 ODA disbursements. For further
details, see “2011 DAC report on Multilateral Aid,” OECD,
2011, accessed November 15, 2012, http://www.oecd.org/dac/aidarchitecture/49014277.pdf, 54.
HARVARD ASIA QUARTERLY 14.4 (2012) | Japan’s Approach to Asia

percent in technical cooperation endeavors,9 with the rest
distributed through multilateral contributions and otherprojects.
This aid prioritizes building economic infrastructure,
chiefly transportation, water works, and power generation,industries in which Japanese corporations have someadvantages. ODA projects in Asia (predominantly bilateral
yen loan projects) comprised 81 percent of total yen loan
programs in 2011 and have actually increased from 69
percent in 2007. While bilateral loans were allocated chiefly
for economic infrastructure projects, Japan’s grants for healthassistance, including training programs under technicalcooperation, have remained minimal, comprising only 1.52.5 percent of overall ODA spending for the past few years(see Figure 2).10
The Japanese public by far prefers that ODA funds
be spent on healthcare, but a large part of actual ODA
spending is allocated to public works instead (see Figure3). Even within the ODA grant category, Japan has madehealth a low priority. To date, bilateral ODA in the fieldof health has predominantly been in the form of grant aid,
with an emphasis on “visible” forms of assistance achieved
through schemes to support the construction of hospitals,
the installation of medical equipment, and other elements ofinfrastructure development.
One reason why health projects remain a low priority
is that Japanese authorities have not developed a robust,evidence-based method to evaluate the impact of assistancein terms of actual health outcomes. Moreover, given the
difficulty of measuring the impact of such assistance (whenit can hardly be expected to yield significant short-term
results), support for the health sector, including the majorityof capacity-building or “non-visible” assistance, has beenreluctant at best.
In fact, economic development has had a muchgreater impact than direct health assistance. Japan has
shown continuous commitment (see Figure 4) to healthissues, varying from cooperation in the fields of populationand HIV/AIDS and measures against infectious diseases
such as malaria and tuberculosis, to maternal and childhealth and strengthening health systems. However, Japan’s
impact on improving health situations is less visible than
the improvement of healthcare achieved through economic
development.
While successive prime ministers have announced
ODA commitments in the fields of health and development,
any substantial increase in funding for health assistancewill be difficult in areas in which Japanese businesses have
910

Calculated from project statistics (reference data), JICA, “Annual
Report 2012,” Japan International Cooperation Agency, 2012,
accessed November 15, 2012, http://www.jica.go.jp/english/
publications/reports/annual/2012/index.html.
For 2010 grant aid figures, only 2.5 percent of the overall ODA
amount was allocated to the health sector, in which technicalcooperation takes up 0.9 percent and there is more receiving of
foreign trainees into Japan than dispatching of Japanese experts
overseas. See MOFA, “ODA Hakusho 2011,” 4.

little involvement. Nonetheless, when an international
commitment is made, the pledged amount may not be
reduced during the domestic budget process, although precise
details about its practical utilization may be hard to verify. The
same applies to funds committed to multilateral institutions.
This serves to constrain the internal process to some extent –that is, in making an international commitment, the pledged
amount puts pressure on domestic elements such as thebudget-making process.
THE HANDBOOK PROJECT: JAPAN’S EXPERIENCE OF
REDUCING INFANT MORTALITY RATE
Although health assistance remains limited, Japan has
been internationally engaged in improving maternal andchild health. In September 2010, the Ministry of Foreign
Affairs (MOFA) redefined Japan’s global health policy into
three pillars: (1) maternal, newborn, and child health; (2)major infectious diseases; and (3) contributions to global
public health emergencies, such as pandemic influenza. For
some years now Japan has been supporting activities that
ensure mothers and babies have regular access to care. Basedon Japan’s own experience, the continuum of care from prepregnancy to after childbirth is key to reducing maternal
and neonatal mortality. Because neonatal deaths account fornearly 40 percent of all deaths in children younger than five
years of age, the policy focuses on delivering a more effective
package of proven interventions for maternal and newborn
survival by strengthening sustainable health systems.
In fact, a major contribution of Japan’s grant aid
projects on health has been the Maternal and Child Health
Handbook (hereafter the Handbook).11 The Handbook
project has worked relatively well in various places because
it outlines a technical solution and is easier to implement on
its own in developing countries, with or without a national
healthcare system.
Japan’s engagement in introducing the Handbook
was based on its own experience of achieving dramatic
improvement in healthcare since World War II. At that time
Japan faced a high incidence of infectious diseases, a highinfant mortality rate (IMR), a shortage of medical doctors
in rural areas, and a huge economic gap between cities andrural areas, like many other developing nations. Throughthe implementation of universal health insurance in 1961
and achievements such as improved access to health services
and vaccination programs, Japan reduced the incidence of
infectious diseases after WWII and dramatically lowered theinfant mortality rate from 92/1000 births in 1950 to 24/1000
by 1965 and to 12/1000 by 1970. In fact, Japan’s IMR was
lower than that of the US by the mid-1960s.
This was a result of rigorous education concerningmaternal and child health issues and tackling infectious
11

JICA had already conducted handbook projects to promotematernal and child health in Indonesia, the Republic of Korea,
the US state of Utah, Tunisia, Vietnam, Laos, Bangladesh,
Palestine, East Timor, the Philippines, and elsewhere.

1993: Japan leads the first Tokyo International Conference on
African Development (TICAD)
Under strong Japanese initiative, an international
conference on the theme of development in Africa started incollaboration with the UN, World Bank, UN Development
Program (UNDP), and others.
1994-2000: Japan announces the Global Issues Initiative (GII) on
Population and AIDS
Agreed under the Japan-US Framework for a New
Economic Partnership, Japan announces it will contribute US$3
billion over seven years from 1994 to fund programs related topopulation and HIV/AIDS.
1997: Japan announces the “Hashimoto Initiative” on global
parasitic disease control
At the G8 Birmingham Summit, Prime Minister
Hashimoto proposes the establishment of centers for training
and research in countries in Asia and Africa and the building of a
network to promote effective international measures in the fightagainst parasitic diseases.
2000-2004: Japan announces the Okinawa Infectious Diseases
Initiative (IDI)
The Japanese government allocates a total of US$ 3 billion
over the following five years to undertake cooperative efforts tocombat infectious diseases such as HIV/AIDS, tuberculosis,
malaria/parasitic diseases, and polio. The G8 Kyushu-Okinawa
Summit agenda includes infectious disease, and Japan’s initiative
leads to the creation of the Global Fund in 2002.
2005-2009: Japan announces the Health and Development
Initiative (HDI)
At the High-Level Forum on the Health Millennium
Development Goals in the Asia-Pacific in June 2005, Japanannounces its commitment to boost contributions towards
achieving these goals. Subsequently, Prime Minister Koizumi
announces funding of US$ 5 billion over five years for cooperative
efforts in the health sector at the G8 Gleneagles Summit.
2008: Japan hosts the G8 Hokkaido Toyako Summit
The Japanese government pushes to include strengthening
health systems on the global health agenda to be discussed by
G8 health experts, and the G8 Health Experts Group makes
recommendations to the G8 Summit in the “Toyako Framework
for Action on Global Health.”
2011-2015: “New Global Health Policy” EMBRACE (2010);“Kan Commitment” (2010)
Prime Minister Kan announces at the UN MDGs
Summit in September 2010 a contribution of US$5 billion over
five years from 2011 to the health sector, and up to US$800
million to the Global Fund. A particular focus among the
MDGs is on the slow pace of progress in maternal and childhealth, as well as the strengthening of health systems
Figure 4: Japan’s Commitments to Improving Healthcare

Source: Health and Global Policy Institute (HGPI), Japan’s Global Health
Policy: Challenges and Opportunities (Tokyo: HGPI, 2012).

Japan’s Approach to Asia | HARVARD ASIA QUARTERLY 14.4 (2012)87

diseases through vaccinations. While national healthinsurance also funded health check-ups, the Handbook helped
mothers acquire a basic knowledge of health. Researchersconcluded that the Handbook was a critical factor in Japan’s
remarkable improvement in public health because it raised
mothers’ awareness and basic knowledge of health. Together
with national health insurance, which achieved full national
coverage by 1961, it aided in reducing the maternal andneonatal mortality rate. More importantly, a comprehensive
approach conducted not only through medical institutions
but also through vaccinations at schools, population-based
health check-ups, nutrition-oriented school lunches, andhygiene-conscious community networks (midwives andhealthcare/hygiene personnel)12 was successful in improving
public health.
THE SHIFT FROM A TRADITIONAL TO AN INNOVATIVEAPPROACH
In the field of health, we have witnessed a considerable
shift in the sources of financial assistance for activities anda transformation in the dynamics among aid donors. In
addition, new private-sector donors have emerged as major
players, including the Global Fund, the GAVI Alliance, andthe Bill & Melinda Gates Foundation (hereafter the Gates
Foundation), whose annual budget exceeds that of the World
Health Organization (WHO). Moreover, with new donors
also among the emerging nations, including the BRIC
countries, the power balance in the global health initiative
is changing dramatically. Innovative financing methods
and the active involvement of international NGOs are alsotransforming the administration of international aid.
Japan also witnessed a shift in direction from thetraditional Handbook project to new financial projects, andthe Ministry of Finance (MOF) also became a major player.
To this point, a far greater proportion of ODA aid in thehealth sector has been implemented by MOFA on a relatively
small scale through technical cooperation and grant aid
projects, whereas yen loans, under the MOF’s jurisdiction,
have dominated a large portion of bilateral projects on
economic infrastructure rather than in health. The main
reason why ODA spending on health remained small was
because health projects were considered inappropriate foryen loans, which involve a significant incurred obligation
for repayment. Therefore, yen loan assistance in the past was
primarily undertaken as an investment in facilities and “hard”
infrastructure expected to be the foundation of economic
growth. Thus, it is relatively easy to evaluate the outcomes ofsuch “visible” investments. Although it is not yet clear that the
yen loan to Pakistan (hereafter the Polio Loan), for example, a“soft” yen loan, will directly impact economic development,
the MOF and the Japanese government have decided to go
forward with it, sharing the risk with the Gates Foundation.
12

88

Helen Wallace, Gordon Green, Kenneth Jaros, Lisa Paine andMary Story, Health and Welfare for Families in the 21st Century,(Burlington: Jones & Bartlett Pub, 1999).

HARVARD ASIA QUARTERLY 14.4 (2012) | Japan’s Approach to AsiaThus, with respect to the utilization of yen loans in the fieldof health, the MOF has not hesitated to create a mechanism
to measure the efficiency with which funds are utilized, as
well as their impact, thereby allowing for the measurement of
their effectiveness.
The case of the Polio Loan was the first time that the
MOF’s vigorous initiative led to the conclusion of a healthproject within the framework of a yen loan. Sensing the global
trend shift, a movement within the MOF sought to strengthen“soft” assistance, such as utilizing yen loans in the healthsector, and to increase the impact of ODA on development.
The MOF’s International Bureau played a particularly
important role by taking bold action on clearing the various
intra-agency barriers and facilitating the realization of publichealth projects. Rather than MOFA, which to date has been
primarily responsible for Japan’s global health assistance inthe form of technical cooperation and grant aid, the MOF
also played a leading role in an unprecedented attempt toutilize the yen loan framework.
Japan’s new commitment: the Polio Loan
Japan’s first yen loan health agreement, up to JP¥ 4.99
billion (approximately US$ 65 million), was signed in August
2011 by the governments of Japan and Pakistan in support
of a polio eradication program in Pakistan, in cooperation
with development donors including the World Bank, Gates
Foundation, WHO, and UNICEF. Of particular importance
was Japan’s introduction of new conditions to maximize theimpact of polio eradication on development efforts by taking
its own experience of fighting the disease into account andapplying it to the situation in Pakistan. For example, the MOF
added conditions such as raising wage for those administering
vaccinations in an attempt to improve competency andincrease the number of women working as vaccinators to put
children at ease. These additional conditions were includedin the Polio Loan to both facilitate and measure the impactof the support.
The process started when the Gates Foundation began
to consider a polio loan scheme with Pakistan in the autumn
of 2010 and approached the MOF’s International Bureau,
MOFA, and JICA, among others, at the Davos Meeting inJanuary 2011. The shift of the internal atmosphere from hard
to soft assistance helped to push the idea for a new loan; the
MOF’s International Bureau took action to bring it forward byclearing the various barriers and moving towards realization.
On a practical level, through extensive hearings andconsultations with the Pakistani government, JICA personnel
in charge of operations in Pakistan, researchers conducting
studies of Pakistan, polio experts, and others the Japanese
government investigated ways in which it could add value
to its assistance efforts. Through this investigation, and withthe cooperation of JICA, the Development Policy Divisionof the International Bureau determined various indicators tomeasure the effectiveness of the loan. With close consultation
between the three ministries, MOFA, METI, and the MOF,

Figure 5: The “Polio Loan” Loan Conversion Scheme

Source: Based on “The Japan International Cooperation Agency (JICA) and the Bill & Melinda Gates Foundation Announce Partnership on Polio Eradication,”Bill & Melinda Gates Foundation, August 18, 2011, accessed November 15, 2012, http://www.gatesfoundation.org/press-releases/Pages/partnership-on-polioeradication-110816.aspx.

the MOF led frequent discussions with the Gates Foundationon the financial terms of the loan conversion mechanism.
Another important point is that the Polio Loan
introduced an innovative “loan conversion” system (see Figure5), conducted in cooperation with the Gates Foundation.
According to this model, if the Pakistani government achieves
specific targets, indicating the successful implementation of
the polio eradication program, the Gates Foundation will
repay the JICA loan on behalf of the Pakistani government. The
aim of this mechanism is to support Pakistan’s commitment
to polio eradication without imposing a financial burden.
The progress of the Polio Loan’s implementation iscurrently being monitored, and if it is determined that a yen
loan is an effective mechanism for providing development
assistance, it may be used in other countries or to tackle
other challenges in the future. As a player with relatively little
previous involvement in the field of global health, it is evenmore important for the MOF to measure the effectiveness of
its development support, but through a transparent processof evaluation and by making the results available to the
public, it can also be a decisive factor in moving towards amore robust utilization of ODA.
The Polio Loan represented a major departure fromthe past in both the utilization of a yen loan for the “soft”
health sector and the incorporation of a new scheme (theloan conversion mechanism). Key factors influencing thisoutcome include the following:• With the global trend of focusing on assistance in the fieldsof health and education in relation to the Millennium
Development Goals (MDGs), there was a movement
within the MOF to expand its conventional focus fromhard infrastructure to comprehensive assistance bystrengthening its commitment to soft assistance.
• For public sector initiatives such as the polio eradication
program, local ownership is particularly necessary. Thus
the MOF judged that the use of a scheme whereby theGates Foundation would take over repayment of theloan if performance targets were met would provide astrong incentive for local authorities to cooperate in
implementing the program.
• While a loan conversion mechanism had previously
been utilized between the Gates Foundation and theWorld Bank, there was no precedent for its use by anational government. However, from the perspective of
its effectiveness in development assistance, the Japanese
government saw great significance in conducting a yen
loan in partnership with the Gates Foundation in this way,
and so determined to attempt this new strategy.
• Given Pakistan’s severe financial constraints, there wasgreat hesitation in even considering a yen loan in termsof the potential repayment of debt. But by working
in conjunction with the Gates Foundation, it became
possible to extend assistance to the country in this way.
JAPAN’S UNIQUE APPROACH OF APPLYING ITS OWNEXPERIENCES• The MOF discussed in great detail how Japan can realize
its own distinctive contribution to the health sector indeveloping countries through the use of Japanese publicfunds to support polio eradication efforts. Through these
discussions, MOF considered Japan’s own history andaccumulated experience of eradicating polio after WWII,
as well as the know-how of Japanese institutions such as
JICA and the National Center for Global Health andMedicine in eradicating polio in developing countries.
Moreover, since there were few precedents of yen loans
being utilized to provide soft assistance in this way, theMOF was committed to a special effort to make the Polio
Loan a successful model case.
• Through insight gained from those already active inthe field, including JICA, and investigating the actual

Japan’s Approach to Asia | HARVARD ASIA QUARTERLY 14.4 (2012)89

circumstances on the ground, the MOF confirmed theimportance of such aspects as improving the capability ofvaccinators in order to increase the development impact ofpolio eradication. Specifically, many vaccinations had to beadministered by women making door-to-door visits, sincein an Islamic country a man may be denied permission toenter a house. Workers also often lacked adequate training
and were paid at rates below minimum wage.13• Although projects related to polio eradication were alreadybeing conducted by such organizations as the WHO,
UNICEF, and Rotary International, the MOF judged thatthe performance indicators established by these operations
were insufficient and cooperated with JICA in considering
additional indicators to measure the development impactof the program. Specifically, additional indicators were
established, such as the number of vaccinators receiving
training and the number of vaccination teams including
at least one female vaccinator, and funding was provided
to raise the wages of vaccinators, thereby attracting morequalified candidates.
• Regarding the interest rate and loan period for the
Polio Loan, Japan applied concessional rates, especiallyin consideration of the country’s recent devastation
by flooding. Rather than using what would be theconventional rate for Pakistan of a 30-year loan period
at an interest rate of 1.4 percent, the Polio Loan wasestablished as a 40-year loan to be repaid at an interest rateof 0.01 percent.
It is significant that the MOF’s International Bureau
took the initiative in utilizing a yen loan for development
assistance in the health sector where grant aid and technicalcooperation projects usually predominate. The Polio Loan also
represented the first use of a yen loan for soft assistance in any
sector, and so the focus was not simply on the size of the loan
but also on how Japan could make a unique contribution.
Moreover, given the large scale of the Polio Loan and the needfor accountability to Japanese taxpayers, it was important toverify its cost-effectiveness, and considerable thought went
into establishing indicators to measure development.
It has often proven difficult to develop original andspecific indicators to evaluate conditions and measure impact.
However, as indicated by the efforts of the MOF, measuring
and evaluating the impact of aid projects is an indispensable
step towards achieving more effective uses of ODA.
Moreover, in terms of public accountability, it is hoped that
this case, through promoting the study and development ofevaluative indicators, will eventually lead to the publicationof data that is at present little known to the public, such as
the precise amount of assistance provided and the evaluationof its impact.
To date, MOFA has taken the initiative in Japan’s
global health efforts, which have been implemented primarily
through grant aid and technical cooperation. However, byleveraging its experience with the Polio Loan, the MOF’s
13

90

These conditions were mentioned during interviews with experts
at the MOF and JICA.

HARVARD ASIA QUARTERLY 14.4 (2012) | Japan’s Approach to Asia

International Bureau is now more capable of considering its
own initiatives, and this represents a success story in termsof the potential for new domestic players to contribute todeveloping health policy. In this way, with new players
able to acquire expertise by undertaking new initiatives,
there is greater potential for Japan to both diversify andincrease its contributions in the field of health. At the sametime, the emergence of new players can promote increased
awareness and capacity among existing players by providing
opportunities to explore new synergies.
JAPAN’S CHALLENGES
The pressing global challenge today is that developed
donor nations are in economic decline and facing severe issuesof aging and social instability with expanding unemployment.
It is becoming increasingly difficult to continue providing
health aid in traditional ways. With new players and emerging
donor countries, a new approach is essential. Because Asia
has become the growing center of the world economy andAfrica is expected to become another potential market, more
corporate players are naturally investing in these regions andencouraging business instead of aid, thereby improving local
economies and employment for sustainable growth. The
social business model has the potential to create sustainablelocal economies with modest returns and local employment
and to gradually improve public health and the standard ofliving.
Coinciding with this shifting global trend in health,
new movements and new players have also emerged in Japan.
An innovative new approach to using ODA loans to financeefforts to eradicate polio in Pakistan opened up a range ofadditional possibilities for Japan to tackle global healthchallenges. In addition, METI and JICA recently started
providing support for Base of the Pyramid (BOP) or social
business ideas to solve health problems.14 Moreover, facedwith a shrinking market as Japanese society ages and its
population declines, Japanese companies are becoming more
active in global markets and recognizing opportunities in thefield of health. In Africa, for example, Ajinomoto, a company
that specializes in amino-acid products, has (with the supportof JICA and USAID) started selling nutrition products for
infants, and Sumitomo Chemical Corporation has invested
in producing bed nets and selling them in local markets.
With an increasing number of new players, more initiatives
will be undertaken in developing countries, increasing theJapanese presence in the global health field and leading to areal increase in Japan’s contribution.
Meanwhile, Japan’s ODA policy remains closely alignedwith the country’s overall growth strategy, and emphasis is
14

Since 2010, METI and JICA have called for projects on BOPbusiness, supporting amounts from 20 to 50 million yen andparticularly encouraging small- and medium-sized Japanese
corporations to conduct BOP business in developing nations.
Importantly, the organizations believe that public-private
cooperation is expected to help resolve developmental issues
faced by BOP business in developing countries.

still placed on nurturing and supporting the activities ofJapanese companies overseas. This growth strategy is an “AllJapan” policy shared above and beyond the ministerial level,with the Cabinet Secretariat’s National Policy Unit playing
a central role.15 However, this emphasis influences privatesector investment decisions after the government takes theinitial risks, as evidenced in Asia. While aid is not sufficientin sustainably improving public health, continuous public
and private investments will spur economic growth with the
expectation of improving health institutions.
Japanese aid institutions need further internal reform,
including flexible goal setting, a balanced mix of “hard”
and “soft” projects, and a coordinated mechanism for
public-private partnership. Instead of political leaders, thebureaucracy has de facto control of budget allocation andpolicy-making processes, and it limits disclosure of detailed
ODA performance data. MOFA policy is centered on “humansecurity,”16 but it is difficult to see exactly how the issue of
public health is embodied within that concept without theenthusiastic support of other domestic players. With eachgovernment ministry and agency securing and allocating its
own budget according to its own internal incentives, no clear
message on health and development can be communicatedas a nation.
When Japan itself endured tremendous devastationin the Great East Japan Earthquake of March 2011, many
Japanese became keenly aware of the importance of providing
sustained support to people in need around the world,
and this has increased recognition of the need for Japan
to contribute to the global community if it hopes to havea meaningful impact on reducing suffering and improving
lives. In order for that to happen, Japan needs to shift fromthe traditional to a new approach and create incentives totackle the challenge of “sustainability,” from financial aid tovisible business opportunities.

15

16

Since the announcement of the “New Growth Strategy” in 2009,“The New Growth Strategy: Blueprint for Revitalizing Japan”(2010), “Realizing the New Growth Strategy 2011” (2011),
and the “Interim Report on Strategies to Revitalize Japan”(2011) have been published. Most recently, on July 31, 2012,
the Cabinet approved “Rebirth of Japan: A Comprehensive
Strategy” (2012). See the National Policy Unit homepage:“Policy,” National Policy Unit, accessed November 10, 2012,
http://www.npu.go.jp/policy/.
“Human security” is defined as “protecting the vital core of all
human lives in ways that enhance human freedoms and humanfulfillment.” See Commission on Human Security, “Human
Security Now: Protecting and Empowering People” (NewYork: Commission on Human Security, 2003). MOFA embraced
this concept, in part initiated by the Japanese government.
Japan’s Approach to Asia | HARVARD ASIA QUARTERLY 14.4 (2012)91