Silviase/jgov_v1.4_full_ann huggingface dataset:
3－9 平成26年度 主な講演会等の開催状況 一市場参加者との対話、市場への情報発信強化の取組み一

開催日	講演等主催者	テーマ
【対象:市場参加者(32件)】
平成26年	5月14日	日本証券業協会(東京)	内部管理態勢整備の留意点
5月21日	資本市場研究会(大阪)	証券検査を巡る最近の動向について～平成26年度証券検査基本方針と最近の指摘事例～
5月26日	資本市場研究会(東京)	証券検査を巡る最近の動向について～平成26年度証券検査基本方針と最近の指摘事例～
5月28日	資本市場研究会(名古屋)	証券検査を巡る最近の動向について～平成26年度証券検査基本方針と最近の指摘事例～
6月4日	日本証券業協会(東京)	内部管理態勢整備の留意点
6月10日	日本証券業協会(大阪)	内部管理態勢整備の留意点
6月11日	日本投資顧問業協会	証券検査を巡る最近の動向について～平成26年度証券検査基本方針と最近の指摘事例～
6月19日	日本投資顧問業協会	運用を考える——経済と制度の日米比較
7月2日	日本証券業協会(東京)	内部管理における検証手法
7月11日	日本証券業協会(東京)	最近の検査結果から見た主な指摘事項について～営業員向け～
7月17日	日本証券業協会(東京)	システムリスク(情報セキュリティ)管理態勢について～検査官の視点で～
9月11日	国際銀行協会	The SESC's Inspection Policy and Program for 2014-2015
10月10日	日本証券業協会(東京)	証券取引等監視委員会の最近における検査概要について
10月15日	日本証券業協会(東京)	内部管理態勢整備の留意点
10月21日	日本証券業協会(東京)	最近の検査結果から見た主な指摘事項について～リテール業務向け～
10月29日	投資信託協会	証券検査を巡る最近の動向について～平成26年度証券検査基本方針と最近の指摘事例～
10月29日	全国信用組合中央協会	証券検査をめぐる最近の動向～登録金融機関業務における内部管理態勢～
11月7日	日本証券業協会(東京)	内部管理態勢整備の留意点
11月11日	日本証券業協会(名古屋)	内部管理態勢整備の留意点
平成27年	1月14日	日本証券業協会(東京)	内部管理態勢整備の留意点
1月16日	日本取引所自主規制法人、3取引所共催	インサイダー取引を巡る動向－健全で活力ある市場を目指して－（上場会社コンプライアンスフォーラム（名古屋））
1月27日	日本証券業協会(東京)	証券会社のリスク管理態勢について～財務の健全性等に必要なリスク管理態勢～
2月5日	日本証券業協会(名古屋)	証券取引等監視委員会の最近における検査概要について
2月5日	不動産証券化協会	証券取引等監視委員会の最近における検査概要について
2月6日	日本証券業協会(大阪)	証券取引等監視委員会の最近における検査概要について
2月10日	日本証券業協会(東京)	内部管理態勢整備の留意点
2月16日	日本証券業協会(東京)	証券取引等監視委員会の最近における検査概要について
2月20日	日本取引所自主規制法人、3取引所共催	インサイダー取引を巡る動向－健全で活力ある市場を目指して－（上場会社コンプライアンスフォーラム（大阪））
3月2日	日本取引所自主規制法人、3取引所共催	インサイダー取引を巡る動向－健全で活力ある市場を目指して－（上場会社コンプライアンスフォーラム（東京））
3月13日	日本取引所自主規制法人、3取引所共催	インサイダー取引を巡る動向－健全で活力ある市場を目指して－（上場会社コンプライアンスフォーラム（札幌））
3月25日	日本取引所自主規制法人、3取引所共催	インサイダー取引を巡る動向－健全で活力ある市場を目指して－（上場会社コンプライアンスフォーラム（福岡））
3月31日	日本証券業協会	最近の検査指摘事例
ESRI Discussion Paper Series No.16

# The Impact of Japanese Economic Cooperation on Asian Economic Development

By

Kenichi KAWASAKI

October 2002

Economic and Social Research Institute

Cabinet Office

Tokyo, Japan
# The Impact of Japanese Economic Cooperation on Asian Economic Development

By

Kenichi KAWASAKI $ ^{*} $

Senior Research Fellow, ESRI

October 2002
## Abstract

The quality of aid has been a worldwide concern in the wake of September 11, 2001. On the other hand, Japan’s massive amount of Official Development Assistance (ODA) to the Asian economies has been questioned by the Japanese people. The main objective of this paper is to overview the developments of Japan’s ODA and assess, in a quantitative manner, their economic impacts on Asian countries.

Japan was the world’s largest donor during the 1990s, although its ODA to GNI ratio remains lower than the UN target of 0.7 per cent. Notable features of Japan’s ODA include a) a high percentage of loans, in particular to Asia, and b) high weighting for economic infrastructures.

Asian economies have become increasingly important trade partners for Japan. Among others, China’s share increased in a distinguished manner in the 1990s and recently reached at around a tenth of Japan’s trade. Although Japanese outward FDI into the Asian economies peaked sometime around the Asian crisis of 1997, ODA loans have more or less supported the volume of capital flows into these economies.

Trends in Japan’s ODA over time do not necessarily reflect the structural changes in Japanese trade and investment in the Asian economies. Regional and sectoral distribution of Japan’s ODA will be reviewed in light of the effectiveness and efficiency of aid.

The benefits of two alternative measures--one from capital formation by Japan’s ODA loans and the other from import liberalization in the Japanese market--are compared in view of the relative efficiencies of the economic policy measures. Those economy-wide impacts of aid and trade on six Asian countries--China, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam--are estimated by a CGE model of global trade, incorporating a certain mechanism of dynamic capital formation.

Japan’s ODA loans are effective for economic growth in the Asian countries. Real GDP gains range from 0.1 to 1.6 per cent annually. Trade liberalization is an efficient way to improve economic welfare. Utility gains range from 0.2 to 1.9 per cent, which exceed those on account of Japan’s ODA. Variations in those economic impacts are much more significantly observed when examined by sector.
## Table of Contents

I. Introduction 1

II. Developments in Japan's ODA 1
1. Aid Philosophy 2
2. Recent Trends 3
3. Future Reform 7

III. Japanese Trade and Investment in Asia 9

IV. Framework of CGE Model Simulations 12
1. Past Assessments of Aid and Trade 12
2. GTAP Model 13
3. Assumptions 15

V. Simulation Results 17
1. Impact of Individual Measures 17
2. Benefits and Costs of Aid and Trade 24

VI. Conclusions and Recommendations 27

References 28
### I. Introduction

Expansion of international trade and investment has enhanced the mutual interdependencies of the world’s economies, both within the developed economies and between developed and developing economies. The role the developed economies will play in the sustainable development of the developing economies has never been as important as it is now.

The events of September 11, 2001 bring about an opportunity to revisit the issue of balanced and sustainable development of the world economy, in particular in the developing societies. The quality of aid from the developed economies has been reviewed on a number of occasions. Earlier arguments in the World Bank’s publication, Assessing Aid (1998) have also been re-examined.

Throughout the 1990s, Japan experienced persistent stagnant economic activities. In contrast, most of Japan’s Asian neighboring economies have succeeded in recovering from the Asian crisis of 1997 and are starting to grow again. Recently, however, Japan’s massive amount of ODA to the Asian economies has been questioned by the Japanese people. ODA has to be provided with a view towards its effectiveness and efficiency in a selective manner.

This paper will provide a quantitative analysis, using economic model simulations, of the impact of Japanese economic cooperation on Asian economic development. Model simulations can provide helpful insights into some of the key mechanisms for possible economic developments, and also indicate orders of magnitude. Where differences of views persist, the modeling can provide a framework within which to identify areas of disagreement more clearly. The main purpose of this paper is to present such economic model simulations.

This paper is organized as follows. After this introduction, developments of Japan’s ODA will be discussed in Chapter II. Asian economic developments, and in particular trade and investment with Japan, will be briefly examined in Chapter III. Following the presentation of the framework of CGE (Computable General Equilibrium) model simulations in Chapter IV, those results will be discussed in Chapter V. The paper will conclude with Chapter VI.

### I I. Developments in Japan’s ODA

Economic cooperation measures of the developed countries essentially have their own features. Japan’s ODA has several salient features that differ from that of other countries. Those features may be a reflection of a unique Japanese history, having experienced the
phenomenon of originally being a large aid recipient $ ^{1} $ to becoming the world’s top donor. Japan has demonstrated a successful model of economic developments as an aid recipient.

### 1. Aid Philosophy

Japan has often been criticized for having no clear or consistent ideas that underlie its Japanese economic cooperation policies. One argument--though it is not necessarily clear--is that Japan is attempting to support the self-help efforts of developing countries. $ ^{2} $ But what constitutes an aid philosophy based on the concept of self-help? According to Nishigaki and Shimomura (1999), two essential elements are emphasized.

The first is the underlying conviction that economic development is only possible when the government and citizens of a developing country make unremitting efforts to improve their current conditions. Unless the people of a developing country take it upon themselves to make the necessary efforts and sacrifices, neither aid nor development will ultimately be successful. The efforts of the developing country are central; foreign aid merely has the supporting role of making it somewhat easier for those efforts to bear fruit.

The second essential element has to do with where the focus of aid implementation should lie. Japan’s basic approach is that an aid donor should not impose its plans on aid recipients; rather, it should do its best to search out and discover nascent independent projects in a developing country and then lend a debt and experienced helping hand to ensure that small seeds can grow to fruition.

In 1992, the Japanese cabinet approved the ODA Charter, which could be the first comprehensive statement of Japan’s aid philosophy and basic policies. The Charter states that Japan’s ODA will be provided in accordance with the principles of the United Nations (UN) Charter, especially those of sovereign equality and non-intervention in domestic matters, as well as the following four principles:

i. Environmental conservation and development should be pursued in tandem;

ii. Any use of ODA for military purposes or for aggravation of international conflicts should be avoided;

iii. Full attention should be paid to trends in recipient countries’ military expenditures, their development and production of mass destruction weapons and missiles, their
export and import of arms, etc., so as to maintain strengthen international peace and stability, and from the viewpoint that developing countries should place appropriate priorities in the allocation of their resources on their own economic and social development;

iv. Full attention should be paid to efforts for promoting democratization and introduction of a market oriented economy, and the situation regarding the securing of basic human rights and freedoms in the recipient country.

Moreover, in line with the basic philosophy and the principles of the ODA Charter, the “Medium-Term Policy on Official Development Assistance” was compiled and published in August 1999. This aimed to provide a clear and concrete path for Japan’s ODA over a five-year period.

### 2. Recent Trends $ ^{3} $

In 1991, the volume of Japan’s ODA in terms of net-disbursement $ ^{4} $ exceeded that of the United States and became the largest in the world. As shown in Chart 1, Japan had maintained this position of top donor country in the world in the 1990s, $ ^{5} $ during which time Japan’s ODA accounted for around a fourth or fifth of the total world aid.

Chart 1: Trends in Major Countries' ODA

Source: 2001 Development Cooperation Report, OECD
Japan’s aid performance, however, is not so excellent when looked at in terms of relative position such that by the ratio over GNI rather than in terms of absolute volume. As shown in Chart 2, Japan’s ODA over GNI ratio was 0.28 per cent in 2000, which is around the DAC member countries average of 0.22 per cent. Although this is also at the level of the majority of DAC member countries, it is very far from the international target of 0.7 per cent that the five distinguished countries of Denmark, the Netherlands, Norway, Sweden, and Luxembourg have already satisfied. $ ^{6} $

## Chart 2: ODA/GNI Ratios in DAC (2000)

Source: 2001 Development Cooperation Report, OECD

ODA is comprised of several schemes. The composition of Japan’s ODA in fiscal 2000 is shown in Table 1. ODA can be classified in several ways. One is the determination of ODA as a grant or a loan, depending on whether the initial disbursement is to be repaid. It is shown that the ratio of loans, in terms of net-disbursement, was around 30 per cent over the total of Japan’s ODA. Using an international comparison, one distinguishing feature of Japan’s ODA is this high ratio of loans. This may be a reflection of Japan’s aid philosophy, as discussed above, which is to support the self-help efforts of developing countries.

The primary objective of economic cooperation measures including ODA loans must be to contribute to the steady and sustainable economic growth of the developing economies and the enhancement of their living standards. Therefore, ODA loans are provided on more favorable terms than, say, commercial finance, i.e. with lower interest rates and longer repayment periods. The average interest rate of ODA loans in fiscal 2000 was 1.41 per cent.
and the average repayment period was around 34 years, including a grace period of nine and a half years. $ ^{7} $

Table 1: Japan's ODA in 2000

(Net disbursement basis)
Billion US $	Billion Yen	Share (%)
Bilateral ODA	9.640	1,039.2	71.8
Grants	5.813	626.7	43.3
Grant Aid	2.109	266.5	15.7
Technical Cooperation	3.705	399.4	27.6
Government Loans	3.827	412.5	28.5
Disbursement	6.894	743.2	51.4
Repayment	3.067	330.6	22.9
Contribution and Subscriptions to International Organization	3.779	407.3	28.2
Total	13.419	1,446.5	100.0

Source: Japan’s Official Development Assistance 2001, Ministry of Foreign Affairs

Since ODA loans are to be repaid, distributions by region and sector are different from those of other aid measures such as grant aid, which is not to be repaid. By region, it is shown in Chart 3 that the ratio of loans to Asia is very high compared with other regions. In contrast, the ratio of grant aid to Africa is strikingly high and that to Asia is relatively low. ODA loans are mainly provided to relatively higher-income developing countries, whose income levels exceed a certain level and have sufficient resources to repay the loans. Grants are primarily intended to aid lesser developing countries with lower living standards.

Moreover, destinations of Japan’s ODA loans concentrate to several Asian countries. In 2000, the largest five recipients--Vietnam, Indonesia, Thailand, China and India--shared more than 70 per cent in total. While, in terms of the cumulated amount of ODA loans at the end of fiscal 2000, Indonesia is the top recipient receiving 3.5 trillion yen on the Exchange of Note basis. This is followed by China (2.7 trillion yen), India (1.9 trillion yen), Thailand (1.9 trillion yen), and the Philippines (1.9 trillion yen). $ ^{8} $

By sector, as shown in Table 2, the ratio of ODA loans is high for economic infrastructure. This includes energy and transportation infrastructures, i.e., the building of roads, railways, bridges, and ports. The ratio of ODA loans for social infrastructure, however, is low. It might have been expected that an investment in those economic infrastructures
would generate direct and indirect economic benefits. Therefore, such revenues would offset the large-scale initial costs and enable the recipient countries to repay the principal and interest of the project. Moreover, grant aid has been allocated mainly to those sectors with low economic profitability. Those are education, health, and sanitation in the social infrastructure sector and agriculture in the production sector.

Chart 3: Geographical Distribution of Japan’s ODA (2000)

Source: Japan’s Official Development Assistance 2001, Ministry of Foreign Affairs

Table 2: Sectoral Distribution of Japan’s ODA (2000)

(Million US dollars)

Grant Aid	Technical Cooperation	Loans
Social Infrastructure	414.0	1,305.4	1,755.9
Education	135.8	753.4	0.0
Health	137.0	171.0	0.0
Water Supply and Sanitation	100.6	81.7	1,700.3
Other Social Infrastructure	40.6	299.4	55.6
Economic Infrastructure	378.0	257.9	3,802.2
Transport and Storage	341.9	94.2	2,741.1
Energy	21.7	39.0	782.2
Other Economic Infrastructure	14.4	124.7	278.9
Production Sectors	320.4	618.0	239.2
Agriculture, Forestry, Fisheries	320.4	339.7	208.7
Other Production Sectors	0.0	278.3	30.5
Multisector Assistance	21.0	95.9	719.3
Sub Total Above	1,133.3	2,277.2	6,516.5
Others	740.7	1,520.7	1,804.4
Total	1,874.0	3,798.0	8,320.9

Source: Japan’s Official Development Assistance 2001, Ministry of Foreign Affairs

Another feature of Japan’s ODA could be suggested regarding its qualitative rather than quantitative features. Among others, grant share is one indicator that measures the advantages of ODA from a financial perspective. On the other hand, the tying status of
contract and procurement of the project is also an important condition for developing countries. However, as shown in Chart 4, these two criteria--concessionality and openness--suggested a kind of trade off. Although Japan's grant share is the lowest among major donor countries, its untied share is ranked among the highest. $ ^{9} $ Any discussion of the quality of ODA must look at multiple criteria.

Chart 4: Quality of ODA (2000)

Source: 2001 Development Cooperation Report, OECD

### 3. Future Reform

Since the beginning of the 1990s, when Japan’s bubble first began to burst, Japanese economic activities have generally been stagnant, with occasional signs of modest improvement. Japan has continued to face serious economic and fiscal constraints. The continued need for massive amounts of ODA has clearly been questioned by the Japanese people, who recognize the severe economic conditions at home. In fact, the ODA budget for fiscal 2001 was cut by 3 per cent followed by much more significant cut of 10 per cent in fiscal 2002. The Japanese government is required to improve the efficiency, effectiveness, and transparency of ODA in order to earn the understanding and support of its people.

In addition to the total amount of ODA, its allocation both by region and sector would be reviewed in a selective manner. It must be noted that this does not necessarily mean that ODA in general or ODA loans in particular would significantly be cut in all the regions in a common fashion. In fact, for example, as shown in Chart 5, the current level of ODA distributes widely around a theoretical convex curve $ ^{10} $ ; it is expected that the relative size of aid
will increase to a certain level according to economic development, which is measured by per capita GDP, but will decrease as the economy “graduates” from receiving aid.

Chart 5: Relative Level of ODA

Source: Japan’s Official Development Assistance 2000, Ministry of Foreign Affairs

Several reasons for the variation in per capita ODA levels among countries in light of their stage of economic development can immediately be pointed out. The excess of ODA in Sri Lanka and shortage of ODA in China in this regard may be a reflection of the fact that population is not a significant indicator for the size of ODA. The appropriate amount of ODA to each country may vary when seen in terms of total values or scaled by a certain macro indicator such as population. On the other hand, the lower levels of ODA in Morocco and Tunisia may be attributed to the geographical bias of Japan's ODA going largely to Asian neighboring economies.

Earlier studies that focused on identifying the factors deciding the distribution of Japan’s ODA among the countries $ ^{11} $ found a certain correlation between the amount of ODA and economic factors such as population, income level, and trade, but at the same time attributed more or less importance to social and political factors and geographical bias. There may be a good reason why such an argument is made, since Japan’s ODA has been said to be a “too” or even a “weapon” in foreign affairs and diplomatic policy. It is not necessarily decided by economic factors alone. However, it has been difficult for economists to measure such intangible diplomatic factors. Policy makers may be in an advantageous position to quantify or, if difficult, even to qualify those factors with enough accountability. Econometric studies in this field are beyond the scope of this paper, however.
Future assistance strategies, in particular those on ODA loans, could be reviewed by two steps. The first concerns the extent to which individual countries are significant to Japan as a recipient. This may mainly be determined by political and diplomatic factors. The second concerns what is considered to be the appropriate amount of ODA loans in each country. This will duly be considered from various economic aspects.

As far as significance as a recipient country is concerned, five main points would be assessed. First are political and economic relations to Japan. Second is conformity with the four principles of the ODA Charter, as discussed above. Third is economic performance in general, and fourth is appropriate development strategy and plan. Fifth is the ability to implement projects.

The appropriateness of ODA loan amounts would be reviewed in light of the following points. First, the impact of ODA loans on development strategy and plan will be checked. Second, past records may be referred to as well. Third, debt service ratio will be checked to confirm the debt sustainability of the recipient. Fourth and fifth, the relative size of Japan's aid will be compared both horizontally and vertically, one with the other recipients and two with the other donors.

### I II. Japanese Trade and Investment in Asia

The Asian economies, including the Asian NIEs (Newly Industrialized Economies), ASEAN (Association of Southeast Asian Nations), and China have been the most dynamic part of the world economy during the last decade. Although several economies were significantly stricken by the Asian crisis of 1997, it is expected that these could be a reflection of short-term adjustments in international economic fundamentals; a temporary phenomena, in other words.

It has been stressed on a number of occasions and in various articles $ ^{12} $ that the higher economic growths in this region have largely been led by expansion in exports as well as increases in foreign direct investment (FDI) inflows, whose rates were also higher than those of the world as a whole on average. The growth in exports and FDI inflows created “virtuous” cycles.

One typical feature in the development of Asian economies is that the higher economic growth in the region has been associated with the deepening of economic interdependence within the region. This feature may also be applied to Japan. Long-term trends in the share
of selected Asian countries in the destination of Japanese exports and sources of Japanese imports are shown in Chart 6A and 6B. Asian countries in total are becoming much more significant partners of Japanese trade.

Chart 6-A: Destinations for Japan’s Exports

Chart 6-B: Sources of Japan’s Imports

Source: Trade Statistics, Ministry of Finance

To be more specific, several key structural changes are pointed out. First, those Asian countries are much more important as source regions rather than destination regions. Second, what is striking is the rapid growth in both exports and imports from China. The share of Japanese trade with China reached at around a tenth at the end of 1990s. Third, on the other hand, one distinguishing feature in view of relative position among countries is a larger drop in the share of Japanese imports from Indonesia. This would be a reflection of the structural changes in Japanese imports, in which the share of oils and raw commodities has declined substantially after the oil crises in the 1970s. It must be noted that Indonesia is no longer a special partner of Japanese trade as far as this figure of total share is concerned.
Chart 7: Trends in Flows of FDI and ODA Loans

Source: Ministry of Finance Statistics Monthly, Ministry of Finance

Annual Report of JBIC, Japan Bank for International Cooperation