loan can tackle challenges such as building and repairing efficient power plants, disaster countermeasures by laying power lines underground, and upgrading to high-efficiency power lines.

### 8. Europe

Japan’s bilateral ODA to the European region in 2007 was approximately US$109.17 million, 1.9% of total bilateral ODA.

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The Baltic countries and the Central and Eastern European countries have shed the former socialist system and are moving toward market-based economies and democratization. The degree of development varies greatly among these countries. Ten of them already acceded to the EU (Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Romania, and Bulgaria). A continuing trend of moving from being a recipient to a donor has been largely seen in these countries, as the DAC list excluded them as recipients and the countries showed increased GNI per capita. Of these countries, Japan does not provide any types of aid to the Czech Republic, Slovenia, Estonia, Slovakia, and Latvia. The others too are generally set to graduate from ODA by the end of 2008.

Croatia and Macedonia (the former Yugoslav Republic of,) are aiming to accede to the EU as soon as possible, and as such are tackling the issue of reform, while Ukraine, Moldova, and Albania appear to be lagging in their move toward a market economy. As well, Bosnia and Herzegovina, Serbia, and Montenegro are in a transition stage of reconstruction from the conflict of the former Yugoslavia in the 1990s and Kosovo only recently gained independence in February 2008.

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As the Baltic countries and the Central and Eastern European countries have rapidly developed, the role of Japan’s assistance in this region is also changing. For the ten nations that have attained EU membership, Japan has provided continuous and wide-ranging assistance for stable transitions by improving citizen’s living standards that experienced economic and social difficulties.

For the Western Balkan region and former Soviet states such as Ukraine and Moldova on the other hand, it is necessary to continue providing support.

Although the Western Balkan countries suffered considerable damage as a result of the conflict of the former Yugoslavia, they presently move from a stage of restoration and reconstruction to one of sustained economic development with a view toward EU accession in the future. For the region, Japan has been rebuilding infrastructure that had been damaged during the conflicts and has been providing assistance focused on the health and medical care sectors. Recently, in line with the progress towards a market economy in each country, Japan has been dispatching experts to promote investment, small and medium businesses and trade, and providing training. It has also been providing assistance for ethnic reconciliation as well as assistance for returnees and landmine victims in Bosnia and Herzegovina, to help establish peace. Japan continues to support the efforts of Ukraine and Moldova for further democratization and transition to a market economy, and it works to raise the standard of living for the people through improvements to medical and agricultural equipment and machinery, and other such assistance.

## Cooperation with Countries that have Graduated from ODA

Japan intends to share its experience as a donor to assist countries that are transitioning away from being target countries for Japan’s ODA to donors. As such, the individuals responsible for economic cooperation in the Czech Republic, Hungary, Poland and Slovakia were invited to Tokyo in February 2008 to attend the “V4+1 Workshop on Development Assistance.” This workshop provided these new EU member states with a good opportunity to strengthen their cooperation in improving their own aid policies and implementation systems, and third country cooperation with Japan.

See page 151 for collaboration between Japan and new aid promoting countries.