often face difficulties derived from underdeveloped fundamental infrastructure and legal systems, shortage in competent local workforce, wars and conflicts, and political instability.

In order to alleviate these difficulties, ODA allied with Other Official Flows (OOF) needs to backup corporative economic activities taken place in developing countries. As well, public-private cooperation, or integrated collaboration, between private corporative investment and governmental ODA/OOF can strengthen the further sustainable economic growth of developing countries.

## Expectation for Public-Private Cooperation

Public-private cooperation has captured a large amount of attention from various sectors, as it can effectively facilitate development and growth of developing countries simultaneously.

The expectation for public-private cooperation has been expressed in various occasions. In January 2008, the Advisory Council on International Cooperation, an advisory body of the Foreign Minister, presented the interim report. Also, the Japan Foreign Trade Council, Inc. publicized the statement on Japan’s international cooperation in March 2008. As well, in April 2008, the Nippon Keidanren (Japan Business Federation) issued a proposal entitled “Position Paper on the International Cooperation – Strengthening of Strategic Perspectives and Public-Private Partnership.”

All of the above has precisely pointed out that ODA is an important diplomatic tool for Japan and it contributes to Japan’s economic growth as well amid advancing globalization. At the same time, these documentations reveal the essentiality and effectiveness of cooperation between public and private sectors.

## Collaboration with the Private Sector

In collaboration with business circles, the government of Japan examined various proposals from economic organizations and specific measures to enhance cooperation between the public and private sectors. In April 2008, it announced the "Public Private Partnership for Boosting Growth in Developing Countries," a package of new measures to strengthen links between ODA and enterprises. The package aims at constructing partnership beneficial to both sides, sharing important foreign policies, and thereby uniting the public and private sectors in development assistance. Major specific measures are: (a) implementation of private sector proposals on public-private cooperation (inquiry offices set up at the Ministry of Foreign Affairs, the Ministry of Finance, the Ministry of Economy, Trade and Industry, and JICA); (b) regularly-held-policy consultations between ODA related ministries as well as implementing agencies such as JICA and business communities; and (c) promotion of public-private cooperation in developing countries (establishment of the expanded country-based ODA Task Forces with participation by local subsidiaries of Japanese companies).

## See also page 132 on collaboration with private companies

In FY2007, JICA started research based on private sector proposals to formulate technical cooperation projects. These researches widely call for proposals from private sector entities that have useful know-how, such as NGOs. From the viewpoints of utilizing private expertise, JICA also subcontracted an additional 45 technical cooperation projects to private entities including NGOs, further expanding the use of the know-how of various types of organizations.

## (7) Response to Debt Issues

##

As long as the developing countries can maintain their repayment capacity by using the received funds effectively and thus ensuring future economic growth, debt is useful in achieving development. However, if a country has little repayment capacity and becomes overburdened with excess debt, it could inhibit sustainable development and thus pose a significant challenge.

Such debt issues must be resolved by the indebted countries themselves by putting forward reforms and other efforts. However, their excessive debt must not stand in the way of their development path. At G8 Gleneagles 2005, the G8 countries agreed on the proposal to reduce 100% of the debts that the Heavily Indebted Poor Countries (HIPCs) owe to the International Monetary Fund (IMF), International Development Association (IDA), and African Development Fund (AfDF). $ ^{10} $ As for the debt issue faced by the poorest countries, 33 HIPCs have become eligible for the Enhanced HIPC Initiative $ ^{11} $ so far, and 23 of them had received comprehensive debt cancellation as a result of their achievement of economic and social reforms as of the end of FY2007.

Some low-income and middle-income countries, other