with scholars, experts, and representatives of NGOs and international organizations participating as observers. In March 2002 they adopted “the Reference Method of Technical Program Evaluation in ODA-related Ministries” to use as a reference in evaluating ODA activities involving the dispatch of experts and the acceptance of trainees carried out by various government ministries.

### SECTION 3. REVIEW OF ODA SYSTEMS

In order to make effective use of the limited resources available for ODA and to achieve transparency, there is a need for an overall review of the various ODA systems and for efforts to improve them. Japan provides bilateral aid in three forms: grant assistance, technical cooperation, and yen loans. Up to now numerous systematic refinements and improvements have been made in the course of implementing these different schemes. Overall, however, there have been complaints that the arrangements are so complex that only specialists can properly understand them and that the existing systems are incapable of responding quickly and flexibly to the rapid changes in developing countries' situations and in the needs for assistance.

With respect to yen loans, which have been praised as having contributed greatly to social and economic development, particularly in Asian countries, in January 2000 the Council on Yen Loan Schemes was set up as an advisory body to the director general of MOfA’s Economic Cooperation Bureau with the aim of making this form of assistance more effective and more efficient in keeping with the changing times, and its recommendations were published in August 2000. $ ^{23} $ Since then, efforts have been made to revise the yen loan system, including the strengthening of the organic coordination of yen loans with grant aid and technical cooperation, the diversification of interest rates and repayment periods, and the strengthening of the “soft” operational aspects of the system. Starting in July 2002, with the aim of improving the effectiveness and efficiency of the yen loan program, the conditions for extending loans were improved with changes including the provision of optional terms for the shortening of the repayment period, increased scope for lending to newly industrializing countries like Brazil, simplification of the existing system of concessional interest, and the introduction of the Special Term for Economic Partnership (STEP) so as to promote the “visibility of Japanese aid” through the use of Japan’s outstanding technologies.

As one improvement in the area of grant assistance, changes have been made in the provision of debt relief and Grant Aid for Increased Food Production. Previously, when grants were provided for these purposes, the funds could only be used for the import of goods. However, in response to requests from recipient countries, it became possible, starting in fiscal year 2001, for the funds to be used in importing services or to be included in a common fund, which is one form of aid coordination.

In the area of technical cooperation, meanwhile, starting in fiscal year 2002 the budget for the dispatch of experts and for project-type technical cooperation was streamlined and consolidated, and it became possible to implement programs on the basis of a free and flexible combination of inputs (including experts,