impact in the international fora. The World Bank argued that attention should be paid once more to the role of infrastructure in development, which was incorporated, as a measure to promote growth, in the Communiqué of the IMF/World Bank Development Committee in April 2003. Moreover, the World Bank announced that it would start joint research with JBIC and the ADB on infrastructure development in East Asia. After holding a seminar in Tokyo in January 2004 and doing a workshop with the participation of local government officials in Indonesia, etc., the World Bank will present the results thereof at a seminar in Tokyo at the beginning of 2005 and will compile a report thereon.

## Support in Response to the Asian Currency Crisis

Japan also provided active support in response to the Asian Currency Crisis in 1997. On the occasion of the crisis, Japan coordinated ODA and Other Official Flows (OOF) and provided active support. In addition to support through the IMF, Japan provided support based on the New Miyazawa Initiative and other support such as special Yen loans. Japan announced that it would provide the amount of approximately 80 billion dollars, which was the largest assistance among related countries, and disbursed approximately 70 billion dollars thereof by 1999. Such support for coping with the Asian Currency Crisis was highly appreciated not only by the Asian countries that received assistance but also by the international community on the ground that Japanese support greatly contributed to maintaining stability in Asia and steering the region from crisis to recovery.

## Shift of ODA Budget to a Downward Trend

While Japan's financial situation became increasingly severe in the late 1990s, it came to be inevitable to review the quantitative expansion of ODA. According to a Cabinet decision made in response to a report of the Fiscal Structural Reform Conference in 1997, the government planned to reduce the level of ODA budget each fiscal year during the period of intensive reform by promoting a shift from quantity to quality in consideration of the critical financial conditions and not to formulate a new medium-term target accompanying the quantitative goals. As a result, general account ODA budget decreased by 10.4% from the previous fiscal year, and ODA budget thereafter turned to a downward trend.

On the other hand, in the United States, although assistance had plateaued through the 1990s, the aid policy changed significantly because development issues have been given a higher priority since the terrorist attacks on September 11, 2001. $ ^{35} $ As specific initiatives, in March 2002, U.S. President George W. Bush announced that the United States would increase the ODA by five billion dollars annually by fiscal year 2006 and established the Millennium Challenge Account (MCA). Furthermore, European Union (EU) countries expressed, at the International Conference on Financing for Development in March 2002, that the entire EU would increase ODA to achieve the ODA to Gross National Income (GNI) ratio of 0.39% by 2006 after positioning the conference as a historic opportunity for advancing toward achievement of the MDGs.

Looking at Japan's ODA budget thereafter, it decreased by 30% $ ^{36} $ in seven years after peaking in fiscal year 1997, and has continued on a downward trend. According to DAC statistics, Japan's ODA disbursement amounted to approximately 9.85 billion dollars (approximately 1,196.4 billion yen) in 2001, and Japan ceded its position as the top donor in the world since 1991, to the United States, and became the world's second largest donor. In DAC statistics, disbursement on a net disbursement basis is used, which is calculated by deducting the amount repaid by developing countries from Yen loans, etc. provided by Japan in the past. Since the repayment of loan aid has largely accumulated in recent years, the level of net disbursement of Japan's ODA has been further pushed down.

## Formulation of the Medium-Term Policy on ODA

Against the backdrop of the severe economic/financial situation and changes of the domestic and international environment surrounding ODA, there were wide-ranging discussions on the desirable form of ODA in the late 1990s. In such circumstances, the Japanese government introduced various measures to enhance the transparency and efficiency of ODA at the Board Meeting of the Council of Overseas Economic Cooperation-Related Ministers in 1998. Japan made efforts to clarify its basic philosophy of ODA and the specific way of proceeding with assistance. For example, Japan formulated in 1999 the "Medium-Term Policy on Official Development Assistance (hereinafter referred to as "Medium-Term Policy on ODA")" as a policy paper discussing how to proceed with ODA over a period of about five years with a focus on the quality of assistance. The Medium-Term Policy on ODA set