In order to turn over the Principle of ODA Implementation, Japan monitors candidate recipient countries, especially developing countries' military expenditures, imports or exports of arms, democratization, and human rights protection, etc., and takes action accordingly. For example, if a candidate recipient country shows a positive move, it is important to increase ODA to that country to express active support for the move and also to take other diplomatic measures to give further support. In contrast, if a candidate recipient country shows a negative move, Japan should use a diplomatic channel to request the country to solve the problem or otherwise remedy the situation and should then review and suspend its ODA to that country if necessary. Such decision should be made in consideration of various factors including the political, social, and economic conditions of the country, the state of national security, and the positive and negative developments from the past in terms of those factors.

The Principle of ODA Implementation should not be applied in an inflexible manner in strict compliance with a single standard. Japan should decide whether to give ODA to a recipient country on a case-by-case basis in consideration of various factors such as the situations of the country, the background of the ODA, and a comparison between the present and the past.

When applying the Principles to the provision of ODA to a developing country, it is important to give humanitarian consideration to the lives of people in that country. Because ordinary people, especially poor people, in the country would suffer the most if Japan suspends or reduces ODA to the country based on the Principles. When Japan suspends or reduces ODA to a certain country, it is therefore sometimes necessary to take special measures such as continuing the provision of emergency and humanitarian aid to the country.

The Principle of ODA Implementation should be applied to all assistance from Japan. There has recently been, however, much controversy as to how to apply the Principle to such cases as described below. For reference, also see page 59 of the ODA White Paper 2003.

### 1 \.Myanmar

Japan's economic cooperation to Myanmar has in principle been suspended since the military regime came to power in 1988 but in 1995, reflecting the improvements to the situation, such as the release of Daw Aung San Suu Kyi of the National League for Democracy (NLD) from home arrest, the Government of Japan decided to consider and implement ongoing projects at the time and projects that would directly benefit the people of Myanmar by addressing their BHN, on a case-by-case basis while monitoring the progress of democratization and human rights protection in Myanmar.

Since January 2001, there have been movements by the Government of Myanmar toward democratization and the improvement of the human rights situation. Political detainees such as members of the NLD were released and lifting of restrictions on the movements of Daw Aung San Suu Kyi. However, in May 2003 the authorities placed Daw Aung San Suu Kyi and some people related to NLD in protective custody and shut down the NLD headquarters, etc.

Right after the above incident occurred, Japan has been concerned about the situation in Myanmar and has requested the Government of Myanmar to allow NLD members including Daw Aung San Suu Kyi to resume free political activities immediately, to explain the incident to the international community in detail, and to promote the national reconciliation and the democratization process. Under the circumstances, some changes were seen toward democratization. For example, Prime Minister General Khin Nyunt took office in August 2003 and announced in his inaugural speech the "Road Map" for democratization, consisting of seven steps. Daw Aung San Suu Kyi was transferred home in September 2003, and some political prisoners were released.

Although the National Convention was reconvened in May 2004 for the first time since 1996 for the purpose of drafting a new constitution, it started without all the relevant parties being involved. For example, Daw Aung San Suu Kyi is still under house arrest and three political parties including the NLD refused to participate in the National Convention. Japan will promote the democratization of Myanmar and persistently call on both the Government of Myanmar and the pro-democracy parties including Daw Aung San Suu Kyi to take positive steps.

Concerning economic cooperation, in light of the situation in Myanmar since the incident of May 2003, basically Japan has suspended new projects. However, taking the poor living conditions in Myanmar into consideration, Japan has been sequentially implementing highly urgent and humanitarian projects after being carefully and individually considered.

### 2. Pakistan

In recent years, Pakistan has played an important role in combating terrorism as a front line state, contributing to the maintenance of peace and stability of the international community. Japan recognizes the importance of Pakistan to develop into a democratic, moderate Islamic state and has been providing the country with assistance.

Pakistan had followed India by conducting underground