development and policy formulation capacity building that contributes to market economy management.

- Support will be provided to strengthen industrial structure through the development of small- and medium-sized enterprises.

- Support will be provided for correcting distortions caused in the process of economic development, including environmental problems and regional disparities.

— With regard to developing countries whose private sectors are not fully functional, emphasis will be placed on ODA projects promoting the development of the private sector. Such initiatives would include infrastructure development for improving the investment environment and areas conducive to the development of the private sector, such as the development of institutions and systems, the upgrading of policy formulation capacities, the development of other private-sector capacities, and the development of basic human resources.

— The Japan Bank for International Cooperation, to be established in October 1999 through the merger of the Export-Import Bank of Japan and the Overseas Economic Cooperation Fund, will draw on the information and know-how accumulated in both organizations to provide more effective assistance by designing ODA projects to match the social and economic conditions in the recipient countries and the special properties of the ODA project. In this way, the Japan Bank for International Cooperation will endeavor to add to the flexibility and efficiency of Japan’s contributions to the international economic community. However, the Japan Bank for International Cooperation will clearly separate its ODA and non-ODA accounts.

### 3. Support to and Collaboration with NGOs

Social development projects, including poverty alleviation and environmental conservation, constitute a steadily increasing share of Japan’s overall assistance to developing countries. For this reason, there is a growing demand for finely tuned assistance that directly reaches local populations. Consequently, NGOs have been playing an increasingly important role in the process of economic cooperation and there is a growing need for collaboration with NGOs in the implementation of ODA projects.

In light of the above, due attention will be paid to the following points.

— Efforts will be made to develop a dialogue and exchange views and ideas with NGOs active in developing countries, through such venues as the “NGO-Ministry of Foreign Affairs Regular Consultation Meeting” and the “NGO-JICA Consultation Meeting.”

— Efforts will be made to increase and enrich ODA support for NGO aid activities.

— Collaboration and cooperation with NGOs will be strengthened through various means, such as the contracting-out of projects and the utilization of NGO personnel and know-how.

— Support will be provided to strengthen the base of Japanese NGOs involved in the implementation of aid activities.

— Efforts will be made to promote the participation of persons with experience in the Japan Overseas Cooperation Volunteers and NGO activities, in the implementation of ODA projects.

It is necessary to strengthen collaborative relations with local governments that have a wealth of technical know-how and experiences