# Background and Process of ODA Review — Changes in the ODA Environment

Section 1

For many years, Japan’s ODA has been highly praised around the world. But now, changes in the domestic and overseas situation are shifting the overall profile of Japan’s ODA in the international community as well as public support for ODA.

Since the end of World War II, Japan has conducted its foreign policy under the belief that contributing to the peace and prosperity of the international community brings peace and prosperity to Japan itself. ODA has been an important tool for realizing this goal of Japan's foreign policy. As symbolized by the stability and development of East Asia, ODA has contributed greatly to the growth of developing countries and regions. This was itself significant to Japan's foreign policy. Furthermore, as the coverage area of its ODA expanded to more areas and regions, Japan, too, benefited from ODA: Japan's international status rose; the market for Japanese products expanded; and sympathy towards Japan was fostered. In addition, the attentive approach of Japanese aid itself has been highly regarded by the international community.

However, the environment surrounding ODA has changed dramatically both internationally and domestically in recent years. Internationally, globalization — the massive and instant flow of people, goods, capital, and information across borders — has proceeded at a rapid pace. The range of global issues, such as environmental problems including climate change, infectious diseases, and terrorism has increased and is having a large impact on Japanese society. Japan's ODA has also had to expand its destination from East Asia to all over the developing world including Africa and the Middle East, and to respond to new international challenges.

Moreover, emerging countries have increased their presence both economically and politically. While developed countries used to be the main donors to developing countries, in recent years, the assistance and activities of emerging donors and non-public sectors, including NGOs, private foundations, and companies, have come to play an increasing role. As a result, in terms of the flow of financial resources into developing countries, the share of ODA from developed countries is declining, and its role in development, too, is changing. The rise of emerging countries has intensified international competition for markets and natural resources, and at the same time, Japan's international presence has become comparatively eroded.

In this international environment, the Japanese society and the lives of Japanese people are increasingly interlinked with the rest of the world. To maintain peace and prosperity in Japan, it has become more necessary than ever to contribute to the peace and prosperity of the entire international community. To this purpose, Japan needs appropriate measures to address the new challenges facing the international community, as well as programs that will improve its international presence, which go beyond the conventional framework of ODA.

Meanwhile, the domestic environment is not necessarily favorable to ODA. Amid difficult economic and fiscal conditions, the ODA budget has fallen significantly. Public sympathy for ODA is also diminishing. According to opinion polls, less people support strengthening economic cooperation, while more people believe that ODA should be reduced as much as possible. The underlying factors for the declining support for ODA are not only Japan's difficult economic and fiscal conditions. It seems for the growing proportion of the younger generations who were not born when Japan received aid from foreign countries or international organizations during the reconstruction and economic growth period of the nation after World War II, the idea of ODA as “repayment” of past favors does not easily resonate with the people. Furthermore, there has been declining public interest in and support for overseas events and international contribution.

The ODA Review was conducted with the aim of responding to these changes in the domestic and international situation, ensuring public understanding and support for ODA, and for implementing more strategic and effective ODA. The outcomes of the review have been published in “ODA Review Final Report” (hereinafter “ODA Review”) in June 2010. Section 2 and the following sections will briefly describe the contents of the report.