Silviase/jgov_v1.4_full_ann huggingface dataset:
## Non-Governmental Organization (NGO)

In this publication, the term refers to an organization that is engaged in development-related activities in developing countries. Many such NGOs have their headquarters in Japan, Europe, or North America, but some are also based in developing countries.

## Development Assistance Committee (DAC)

DAC is an agency of the Organization for Economic Cooperation and Development (OECD) that primarily mediates negotiations among aid donors on quantitative increases or qualitative enhancements in aid. Established in 1961, DAC now has members from 22 industrial democracies, including Japan, as well as the European Commission.

## Grant Element (GE)

Grant element is an index of the financial terms of assistance, the GE of a loan on a commercial basis (with an assumed interest rate of 10%) being 0%. As terms (interest rate, grace period, and maturity) are alleviated, the GE figure rises, reaching 100% in the case of a grant.

## Exchange of Notes (E/N)

Exchange of Notes are official documents stipulating the content and conditions of cooperation between the Japanese and recipient governments.

## Net Disbursement

Net disbursement is gross disbursement minus the amortized amount (the volume of repayment from the recipient) during a certain period of time (generally a calendar year).
## I NTRODUCTION

The world was shocked by the September 11 terrorist attacks in the United States in 2001. Such acts cannot be justified under any circumstances, as they represent a serious challenge to the entire international community and pose a grave threat to all civilizations. The international community including Japan stands together to counter terrorism so that incidents like September 11 are never repeated and supports those whose lives were severely affected by the attacks. The World Bank estimates that the incident will cause 10 million people to fall into poverty and 20,000 to 40,000 children under five years old to die in developing countries. Thus, the biggest victims of rising anxiety in society as a reaction to terrorism are those living in developing countries as well as those too poor to shield themselves from heightening tensions.

More than 1.2 billion people—most of them in the developing world—continue to live in absolute poverty (subsistence on less than one dollar a day). Nearly 800 million, moreover, suffer from hunger. Poverty, though, is not the only problem besetting developing countries. Many are embroiled in armed conflict, which directly threatens citizens' lives and can quickly destroy the fruits of many years of development efforts. Developing countries also confront the dangers of infectious diseases like HIV/AIDS, which rob these countries of citizens who might otherwise have played a significant role in nation building and of social vitality. Environmental problems like global warming, which is causing sea levels to rise, and the destruction of ecosystems present additional challenges. These problems transcend national and continental borders and may push the entire international community, including developed countries, to the brink of crisis. Putting off a solution to these many problems will mean leaving behind an enormous negative legacy to future generations.

The rapid advance of globalization has prompted a sharp rise in cross-border flows of people, goods, capital, and information. This is fostering even deeper ties of interdependence among members of the international community. Japan is highly reliant on other nations for its resources and markets. To enjoy continued prosperity in a peaceful world, Japan must foster even closer relations with developed nations. At the same time, it must also cooperate with and live in coexistence with the developing world, which constitutes the vast majority of nations in the global community.
Helping to establish an international order befitting the twenty-first century and playing a leadership role in addressing the problems of developing countries as well as global issues are in Japan’s own national interest. This is because contributing to the harmonious and reciprocally beneficial development of the international community and winning its deep trust will enable the country to maintain and enhance the peace and prosperity it now enjoys. ODA is one of the most potent means at Japan’s disposal to advance this policy. It is thus of great importance that Japan continues not only to actively and effectively transfer its excellent technology and know-how, honed through experience, to developing nations but also to move in step with them and to respect their policies and self-help efforts.

Such recognition has catapulted Japan into one of the world’s leading donors, having administered ODA to over 150 developing countries. Japan has cooperated with other donor countries and the international community—including recipient nations—to address development issues, thus helping economies, primarily in Asia, achieve unprecedented development in the latter half of the twentieth century. Average life expectancy in developing countries, for example, rose from 55 years in 1970 to 65 years in 1998, while the infant mortality rate declined from 107 per 1,000 births to 59 over the same period, and adult literacy similarly improved from 53% to 70%. Wild polioviruses were declared eradicated in the western Pacific in 2000, an achievement that was praised internationally and in which Japan played a major role. Actual levels of development vary widely from one country to the next, though, and there are continuing demands for development assistance in Africa and Asia. New issues have emerged, moreover, including global environmental problems, infectious diseases like HIV/AIDS, and peace building. Because Japan is currently facing great difficulties in improving its own economic and fiscal conditions, however, views critical of assistance have been voiced domestically. Accordingly, the ODA budget in the general account for fiscal year 2002 (April 2002 to March 2003) fell by 10.3% from the preceding year to ¥910.6 billion. There have also been growing demands for qualitative improvements in transparency, effectiveness, and efficiency, and the government must give due heed to these voices. Reflecting these views, the Final Report of the Second Consultative Committee on ODA Reform, submitted to Foreign Minister Yoriko Kawaguchi in March 2002, outlines concrete reform measures around such central concepts as public participation, the securing of transparency, and improvements in efficiency.

As the various problems confronting international society grow in both diversity and complexity, it is becoming increasingly difficult for the government alone to cover every aspect of Japan’s contributions. In imple-
menting development assistance it will henceforth be necessary to advance the “three P’s” of “partnership,” taking full advantage of the breadth of experience, technology, and know-how accumulated by non-governmental organizations, private companies, universities, and local governments; eliciting the “participation” of broad segments of society; and encouraging “public-private interaction” through two-way dialogue. Of course, while the government must strive to seek the cooperation of and closer ties with NGOs and other sectors of society, it is also important for each citizen to personally deepen their ties with the international community. Broader participation in ODA activities can help revitalize Japanese society and fill young people with renewed hope.

Keeping these perspectives in mind and also taking note of changing domestic opinion and diversifying development-related issues around the world, this publication aims to provide a comprehensive and up-to-date picture of Japan’s ODA. The government is making an effort to gain the public’s fuller understanding of and support for its ODA program, the financial sources of which come from tax revenues, by clarifying its significance, ensuring its transparency, and achieving effective and efficient implementation. This publication is one facet of such an effort.
Part I

ODA IN THE TWENTY-FIRST CENTURY
# Development Challenges in a Globalizing World

Japan first began providing aid in 1954. $ ^{1} $ In the intervening half century, the country has experienced vast changes, ranging from the reconstruction and high-paced growth of the postwar era to the prolonged economic difficulties of recent years. There have also been far-reaching changes in the developing countries that receive Japan’s aid. The dramatic moves brought about by globalization since the 1990s have had a huge impact, both positive and negative, on development. Particularly significant has been the increased role that private financial flows play—in the form of trade and investment—in promoting development. The following analysis begins with an overview of the demand side of the aid equation: the circumstances facing developing countries. This is followed by an examination of the manner in which the international community, including Japan, has responded to the problems of the developing world.

### SECTION I. PROBLEMS IN DEVELOPING COUNTRIES

## (I) Globalization and Poverty

The closing decade of the twentieth century saw the Cold War come to an end. There was also a marked shift towards globalization, primarily through the transition to market-based economies. In addition, the international community experienced remarkable development owing to dramatic advances in information and communications technology (ICT), which was also the driving force for globalization. However, the benefits of globalization were not shared equally among all nations and all people. As a result, a widening gap emerged between nations that were able to reap the benefits of globalization and the many developing countries that were unable to take full advantage of such benefits. While globalization is an inevitable process, it is also extremely important that we redouble our efforts to ensure that all people on Earth are able to share fully in its fruits. If globalization advances while many developing countries are still unable to reap its benefits, the North-South problem will appear in new, even more sharply defined forms that could hinder its progress. Development problems have therefore become a core issue requiring a united response from the international community. The communiqué of the 2001 Group of Eight Summit in Genoa contained 36 paragraphs, 21 of which dealt with development issues in one form or another. This is symbolic of the growing importance of development issues to the international community.

As noted in the Introduction, one in five
ference on Environment and Development (Rio de Janeiro, 1992), the International Conference on Population and Development (Cairo, 1994), the World Summit for Social Development (Copenhagen, 1995), the Fourth World Conference on Women (Beijing, 1995), the Second United Nations Conference on Human Settlements (Istanbul, 1996), the World Education Forum (Dakar, 2000), the Okinawa International Conference on Infectious Diseases Control (Okinawa, 2000), the Third United Nations Conference on the Least Developed Countries (Brussels, 2001), the United Nations General Assembly Special Session on HIV/AIDS (New York, 2001), and the International Conference on Financing for Development (Monterrey, Mexico, 2002). These meetings produced specific, quantitative targets in areas such as poverty reduction, increased access to primary education, the elimination of gender disparities in education, the reduction of infant mortality, and the achievement of sustainable development. They also gave expression to the determination of the international community to work together towards the achievement of these goals.

In 1996 the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD)—a group of leading advanced donor

Chart I. Major International Conferences Since the 1990s

September 1990	World Summit for Children (New York)
March 1990	World Conference on Education for All (Jomtien, Thailand)
June 1992	UN Conference on Environment and Development (Rio de Janeiro)
June 1993	World Conference on Human Rights (Vienna)
September 1994	International Conference on Population and Development (Cairo)
March 1995	World Summit for Social Development (Copenhagen)
September 1995	Fourth World Conference on Women (Beijing)
June 1996	Second UN Conference on Human Settlements (Istanbul)
November 1996	World Food Summit (Rome)
June 1997	UN General Assembly Special Session on Environment and Development (New York)
June 1999	The UN General Assembly Special Session on the International Conference on Population and Development (New York)
April 2000	World Education Forum (Dakar)
June 2000	UN General Assembly Special Session: Women 2000 (New York)
June 2000	UN General Assembly Special Session: Social Summit + 5 (Geneva)
September 2000	UN Millennium Summit (New York)
December 2000	Okinawa International Conference on Infectious Diseases Control (Okinawa)
May 2001	Third UN Conference on the Least Developed Countries (Brussels)
June 2001	UN General Assembly Special Session on HIV/AIDS (New York)
March 2002	International Conference on Financing for Development (Monterrey, Mexico)
countries—published its New Development Strategy (“Shaping the 21st Century: The Contribution of Development Cooperation”). $ ^{2} $ Japan was instrumental in the formulation of this strategy, which identified seven specific International Development Goals (IDGs). The IDGs have since gained acceptance as shared objectives among the international community. $ ^{3} $ Major developed countries reaffirmed their commitment to the achievement of these goals at successive G8 Summits, and leaders of over 150 nations formally affirmed their determination to achieve the IDGs at the United Nations Millennium Summit in September 2000. Some donor nations have started to increase their development aid budgets with a view towards the realization of the IDGs.

## (2) Diversification of Development Aid Entities

As globalization gathered pace during the 1990s a growing range of organizations, including not only donor governments and international agencies but also private corporations, foundations, and international NGOs, emerged as key players in the field of development assistance. Communities and NGOs in addition to governments in developing countries have also started to play a major role, reflecting the crucial importance of public participation in developing countries to the realization of effective and sustainable development. In addition, some countries have reached a stage of development where they are able to use their own development experience to provide assistance to others in specific regions or fields while still receiving aid themselves. There is particular interest in “South-South cooperation” in the Association of Southeast Asian Nations (ASEAN), which now places considerable importance on the correction of gaps among its member states through development assistance to its less developed members. $ ^{4} $

The increasing diversity of development-related entities has been a major feature of trends in recent years.

## (3) Promoting Aid Coordination

With various aid entities working together to enhance the effectiveness and efficiency of development cooperation, the international community is moving increasingly towards a coordinated approach to assistance based on clearly defined development goals. This approach is known as aid coordination. In the
past, when donor governments and international agencies needed to coordinate their aid activities, there was a tendency to focus on coordination between donor governments and the international agencies, partly because recipient countries lacked coordination capabilities. Over the past few years, however, there has been growing recognition that development goals cannot be achieved without the initiatives of the developing countries themselves and unless developing countries, donor nations, international agencies, and other participants work together as partners. This change reflects the content of the OECD/DAC’s New Development Strategy which included two key concepts: efforts by the developing countries themselves (ownership) and the importance of cooperation with developed countries (partnership). There has been a number of significant moves towards aid coordination in this context, especially by the World Bank and the International Monetary Fund (IMF).

First, the World Bank has adjusted its policies, which had previously given priority to the structural adjustments needed to drive the transition to market-based (privatized) economic systems. It has adopted a new approach, called the Comprehensive Development Framework (CDF), which encompasses not only economic but also social development. $ ^{5} $ Under this approach, the World Bank aims to bring together various aid-related groups involved in development—donor governments, international agencies, NGOs, civil society, and so on—to establish a comprehensive framework within 10 to 15 years under the leadership of of developing country governments. This new approach is highly significant because ownership of the developing countries is identified as a first priority and because the stress is placed on the need for developing countries to make their own decisions regarding the pace of initiatives in each area.

Second, poverty reduction has emerged as the top priority issue of aid to developing countries since the second half of the 1990s. The World Bank and the IMF have both adopted new approaches to this problem. In particular, the governments of developing countries and a wide range of aid entities work together under the CDF concept to formulate strategy documents, known as Poverty Reduction Strategy Papers (PRSPs), which define the respective roles of all participants. These strategies form the basis of effective aid for poverty reduction. The World Bank and the IMF have made the preparation and presentation of PRSPs a condition for assistance to heavily indebted poor countries (HIPCs) under the Expanded HIPC Initiative $ ^{6} $ and for assistance under the Poverty Reduction and Growth Facility (PRGF) provided by the IMF in the form of loans from the
International Development Association. $ ^{7} $

Third, there has been an increasing trend in recent years towards the formulation of comprehensive development plans for specific sectors, such as education and health and medical care, especially in sub-Saharan Africa. Aid is provided under these plans, which are drawn up through consultation and coordination between the governments of developing countries and various aid providers, such as donor governments and international agencies. Such schemes are known as Sector-Wide Approaches (SWAps). In recent initiatives in certain African countries, such as Tanzania, the scope of coordination has been expanded to include not only planning but also the establishment of common funds in which financial resources can be pooled.

The increased emphasis on these new approaches reflects efforts to enhance the efficiency and effectiveness of aid through coordination between developing countries and aid providers, including donor governments and international agencies. In addition, steps are being taken to enhance the ability of the international community to respond to global issues by employing not only government but also private-sector aid. A typical example is the Global Fund to Fight AIDS, Tuberculosis, and Malaria, which was established in January 2002 after its founding was declared at the G8 Summit in Genoa in July 2001. (See also undertakings against infectious diseases in Chapter 2, Section 2 (2).)

Slow growth in the world’s total aid resources has prompted the emergence of a variety of experimental aid coordination initiatives as part of efforts to maximize the effectiveness and efficiency of aid. Despite the new emphasis on unity and coordination in the international community, however, major donors and international agencies cannot change their approaches to aid overnight. Moreover, excessive haste could disturb existing development aid activities. Japan’s policy in this area calls for continuing aid coordination efforts, but it also emphasizes the need to proceed steadily, starting in areas where possible. Japan also believes that coordination should be based on consultation with various participants in the aid process, including the governments of developing countries, with situations in those countries fully taken into account.
# ODA's Role in Promoting Peace and Prosperity in the International Community

Japan relies on other countries for much of its natural resources, energy, food, and other requirements. Its positive contributions to the growth and prosperity of developing countries in Asia and elsewhere serve to reinforce the peace and prosperity of the entire world, thus enabling the country to secure the respect and trust of the international community. This, in turn, holds great significance in maintaining and enhancing Japan’s own peace and prosperity.

Official development assistance (ODA) continues to be an important foreign policy tool for Japan, helping the nation play a role commensurate with its status as a key member of the international community. Human resources development and technology transfer will be crucial to the evolution of developing countries in the twenty-first century. The promotion of ODA to contribute in these areas not only lays the foundation for national development but also helps to foster mutual understanding, friendship, and trust between Japan and the recipient countries. As mentioned in the Introduction, the international community confronts an increasingly serious and diverse array of global issues, including poverty, terrorism, the environment, infectious diseases, and refugees. Responding to these issues as well as securing global peace and prosperity requires urgent and comprehensive action. ODA can play a major role in resolving these issues. Increased attention is also being paid to the potential of ODA in conflict prevention and peace building, which have hitherto been approached from the political and security perspectives. In this chapter, an analysis will be made of the contributions that development aid can make to the growth of developing countries and the achievement of world peace and prosperity in the twenty-first century. The priorities for Japanese aid will also be examined, with particular emphasis on people (human resources development and networking), the Earth (global issues), and peace (conflict prevention and peace building). The following is a brief summary of Japan’s involvement in ODA.

Japan began providing technical cooperation after joining the Colombo Plan in 1954. Since then, Japan has focused its implementation of ODA mainly on Asia, reflecting its close geographical, historical, and cultural ties with Asian countries, which, even now receive approximately 60% of Japan’s bilateral ODA. Overall, Japanese assistance has made a major contribution—through human resources development and the improvement of economic and social infrastructure—to the rapid economic development process that became known as the “Asian Miracle.” Such aid has attracted foreign direct investment from the private sector and contributed to the economic and social advancement of as well as stability in East Asia through the creation of social safety nets.

When the Asian currency and economic crisis struck in 1997, Japan promptly an-