Japan's development assistance program began on a modest scale in the mid-1950s, in the form of reparations and quasi-reparations for the wartime damages Japan had inflicted upon the Asian countries. Reparations were paid to four countries (Burma, the Philippines, Indonesia and South Vietnam) over 1955-1965, for the amount of about $1 billion. Additional economic assistance was provided to other Asian countries that had renounced their claims to formal reparations, including Thailand, Korea, Singapore and Malaysia; as these funds were provided in the spirit of reparations, they were called "quasi-reparations" in Japan (Takagi 1995). At the same time, Japan also initiated a technical cooperation program as a participant in the Colombo Plan.<sup>2</sup>

**Table 2. Net Official Flows to Developing Countries, 1999 (Million US dollars)**

|||**ODA**<br>|**Flows**<br>|||**ODA and**<br>|**OOF Flo**<br>|**ws**<br>|
|---|---|---|---|---|---|---|---|---|
||**Total**|**Asia**|**Africa**|**Americas**|**Total**|**Asia**|**Africa**|**Americas**|
|**Bilateral Flows**|||||||||
|**Japan**|10,476|6,997|1,214|814|18,751|17,403|978|-657|
|**United States**|6,848|1,675|1,970|1,238|11,641|2,436|2,066|5,193|
|**European Union**|16,810|3,078|6,253|1,897|16,915|3,452|6,640|1,084|
|**France**|4,125|321|2,075|167|4,121|315|2,336|-98|
|**Germany**|3,278|1,072|1,063|398|3,238|1,421|1,082|37|
|**United Kingdom**|2,249|503|806|306|2,184|418|829|327|
|**DAC Total**|37,862|12,647|10,291|4,240|52,344|24,981|10,542|6,395|
|**Multilateral**|14,206|4,673|5,474|1,764|28,022|10,571|5,132|10,008|

# **Development Banks**

_Note:_ ODA includes grants and concessiona **l** oans only. Bilateral ODA (or OOF) flows in the table exclude donors' contributions to multilateral institutions. Excludes Part 11 countries.

_Source:_ OECD DAC.

In the early 1960s, Japan gradually began to expand its development assistance program, and became an important member of the international donor community. In 1960, it became one of the nine member countries of the Development Assistance Group, which was reconstituted as the DAC within the OECD in the fall of 1961. In the same year (1960), it joined the International Development Association (IDA), a World Bank affiliate, and contributed $33.5 million to the total capital of $1 billion. Japan also played the leading role in the establishment of the Asian Development Bank (ADB) in 1966, with the initial contribution of $200 million, equal to that of the United States.

Throughout the 1960s, the volume of Japanese ODA increased steadily, rising from about $100 million per year to about $500 million. By 1970, Japan had become the fifth largest donor country, behind the United States, France, West Germany and the United Kingdom. Japan surpassed the United Kingdom in 1972, West Germany in 1983, France in 1986 and, temporarily, the United States in 1989. In the 1970s and 1980s, the US dollar value of ODA increased by almost twenty-fold, from about $500 million to about $9 billion. After Japan became the largest provider of ODA in 1991, the volume continued to rise steadily in the 1990s. Over these periods, the net US dollar value of OOF fluctuated up and down corresponding to the value of interest and amortization

> _2_ The Colombo Plan was initially established by the British Commonwealth countries in 1950 as an arrangement for facilitating technical and financial assistance to the member countries of South and Southeast Asia. Japan became a member in late 1954.

3