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In Search of New Approaches to Japanese Development Assistance the Foundation for Advanced Studies on International Development (FASID) Was Established in April 1990

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In Search of New Approaches to Japanese Development Assistance the Foundation for Advanced Studies on International Development (FASID) Was Established in April 1990 In Search of New Approaches to Japanese Development Assistance The Foundation for Advanced Studies on International Development (FASID) was established in April 1990. FASID and its affiliate, International Development Research Institute (IDRI), conduct research, facilitate interaction among researchers and practitioners, and offer train- ing programs to development specialists. These activities are aimed for improvement in the quality of development programs and policies. Copyright © 2006 by FASID Published in 2006 in Japan by the Foundation for Advanced Studies on International Development, 1-6-17 Kudan-minami, Chiyoda-ku, Tokyo 102-0074, Japan e-mail : [email protected] URL : http://www,fasid.or.jp Foreword Naonobu Minato Acting Director, International Development Research Institute, Foundation for Advanced Studies on International Development International development has entered a dynamic phase, as indicated by increases in funding at the onset of the 21st century following declines in the 1990’s. An important contributing factor to this has been accelerating eco- nomic, political and social globalization. Assistance to the most fragile states has also been prompted by terrorism concerns in major donor coun- tries. If development had ever been an issue to be treated in isolation, clear- ly that time is past. It has now become a process with a global context, glob- al consequences and global ramifications. Some donors have restructured their organizations to adjust to the chang- ing trends. Noticeable examples include the UK, which established the Department for International Development (DFID), the US, which estab- lished the Millennium Challenge Corporation (MCC), and France, which established Agence Français de Development (AFD). The UN aid agency, UNDP, shifted its attention away from technical cooperation to the provi- sion of upstream political analysis and policy recommendations, and changes are also under consideration at the two Bretton Woods Institutions ― the World Bank and the International Monetary Fund. In Japan, two important international conferences are scheduled for 2008 ― the G8 summit to be held in Hokkaido and the 4th Tokyo International Conference on African Development (TICAD IV) to be held in Tokyo. And in the fall of 2008 a significant new ODA organizational structure is set to be introduced. This is an opportune time, therefore, to review and examine the Japanese system as part of a search for a new Japanese approach to ODA. That is the purpose of this fourth volume in the Trends in Development Assistance series: to analyze international trends, development assistance institutions and important development issues. This book describes and ana- lyzes key modalities ― loans, grants and technical assistance ― and pre- sents key issues facing the Japanese development community. Takamasa Akiyama, senior advisor of IDRI, FASID and Yuichi Sasaoka, Professor, Graduate Institute for Policy Studies (GRIPS), are the co-editors. I want to express my gratitude to external contributors to this volume: Yasutami Shimomura, Professor, Hosei University; Yasuhisa Ojima, Senior Advisor, Planning Division, Department of Development Operations, JBIC; Izumi Ohno, Professor, GRIPS; Koichi Miyoshi, Professor, Ritsumeikan Asia Pacific University; Koji Makino, Director, Human Security Team, Planning and Coordination Department; Yukio Sugano, Professor, GRIPS; and, Mikiko Nishimura, Associate Professor, Kobe University. Each con- tributor brings valuable insights from the academic as well as the practical perspective. I would also like to convey my appreciation to Hajime Sato, Junko Takeuchi and Nagashige Chou for their translation. I hope this book will be useful to the on-going reform of ODA system in Japan. Each chapter reflects the opinion of its author, not of their organizations. Titles are the ones used in the original version. March, 2006 In Search of New Approaches to Japanese Development Assistance Foreword List of Tables, Figures and Boxes Abbreviations and Acronyms Chapters 1Recent Trends in International Aid and Their Impact on Japan …001 2 Rediscovering the Role for Japan ‘Counter’ force against the ‘Negative Side’ of the Trends in International Aid ………………………………………………035 3 Structures of Donor Partnerships For more effective partnerships…………………………………054 4Infrastructure Finance: A New Direction for Yen Loans …………086 5Improving Grant Aid Cooperation Strategy and Effectiveness Formation of a comprehensive economic cooperation policy …119 6 JICA and Future Technical Cooperation …………………………160 7Human Security and Aid from the Perspective of an Aid Practitioner …………………………………………………………………188 8The Private Sector and Development A Review of the Development Role of Developed Country Private Enterprise ………………………………………………210 9 Africa’s Poverty Reduction Strategy ………………………………239 Perspectives on African Development Steategies and their Policy Implications ………………………………………264 Final Chapter Transition to Strategic Aid…………………………………………290 List of Tables, Figures and Boxes Tables Table 2-1 Percentage of poor population and human development indicator in lowest ranking countries* in governance indicator ……………………………………………………41 Table 2-2 Matrix of Tanzania,s PRSP ………………………………47 Table 3-1 5 organizational structure models in the Development Assistance Agencies ………………………………………61 Table 3-2 Donors’ size and attitude toward partnership………………64 Table 3-3 Factors defining the degree of commitment toward partnership …………………………………………………65 Table 3-4 Parameter of further cost to the partnership ………………67 Table 3-5 Measures to structure the partnership………………………79 Table 4-1 Infrastracture stock in developing countries ………………92 Table 4-2 Uhcompetitive and components of infrastracture network……………………………………………………100 Table 5-1 Overview of grant aid schemes and 2005 budet …………123 Table 5-2 Remarks about ODA’s evaluation system ………………134 Table 5-3 Recent actions for the improvement of ODA evaluation…134 Table 5-4 Situation of school canstructions in Cambodia by each organization (Made by citizen Forum in Cambodia, Japan) ……………………………………………………136 Table 5-5 Examples of school building projects on cost reduction …136 Table 5-6 Grant aid adapted to the recipient country’s situation ……136 Table 6-1 Institutional change of JICA before and after the transformation into independent administrative institutions ………………………………………………180 Table 8-1 Involvements of private enterprises into the developments ……………………………………………214 Table 8-2 Breakdown of development finance in the U.S. …………221 Table 8-3 The World Bank group aid scheme for private sectors …226 Table 8-4 Breakdown of GAVI funds (as of March, 2005) …………228 Table 8-5 Japan’s PPP cases (designed public & managed by private) …………………230 Table 8-6 Involvements of private enterprises into development and PPP ………………………………………………………234 Figures Fig. 1-1 Gross Disbursement ………………………………………21 Fig. 1-2 net disbursement……………………………………………21 Fig. 1-3 Gross Disbursement (million dollars) ……………………21 Fig. 1-4 net disbursement (million dollars) …………………………21 Fig. 1-5 Transitio of ODA disbursements among DAC major countries ……………………………………………………24 Fig. 3-1 Concepual framework ……………………………………60 Fig. 4-1 Relationship between development of infrastractures and poverty reduction …………………………………………88 Fig. 4-2 Road construction and medical service ……………………90 Fig. 4-3 Infrastracture effect : case of northern Vietnam transportation infrastructure ………………………………91 Fig. 4-4 percentage of bilateral ODA (into infrastracture field commitment) ………………………………………………93 Fig. 4-5 regional trend of private sector involved infrastracture (1990-2003) ………………………………………………94 Fig. 4-6 sector trend of private sector involved infrastracture (1990-2003) ………………………………………………94 Fig. 4-7 characteristic of infrastracture : network …………………97 Fig. 4-8 Function of yen loan : case of Vietnam Phu My thermal power plants ………………………………………………101 Fig. 4-9 Development stage of development funds ………………105 Fig. 4-10 Concept of Output-based Aid ……………………………107 Fig. 4-11 Concept of temporary subsidy ……………………………107 Fig. 4-12 Orerview of Republic of Tajikistan Pamir Power Project ……………………………………………………108 Fig. 4-13 Transition of Paris Club agreement ………………………110 Fig. 4-14 Philippines municipal finance ……………………………112 Fig. 4-15 Philippines Revolving Fund Framework …………………112 Fig. 5-1 Japanese ODA and grant aid ……………………………123 Fig. 5-2 Transition of uncompensated financial assistance business budget……………………………………………126 Fig. 5-3 Transition of regional distribution of grant aid (comoarison between 2000 and 2004)……………………127 Fig. 5-4 Breakdown of bilateral ODA patterns of Japan to Africa (comparsion between 1999 and 2003) ……………………127 Fig. 5-5 Workflow of grant aid: Role of MOFA and JICA (in the cases of grant aids for general projects and fishery) ……………129 Fig. 5-6 Transition of International ODA Loans and ODA Grants ……………………………………………………140 Fig. 5-7 Transition of Japan ODA Loans and Grants ……………141 Fig. 5-8 Transiticn of trade relationships between Japan and other regions (increase of East Asian) importance ……………149 Fig. 5-9 Definition of PPP …………………………………………150 Fig. 5-10 Regional allocation of Japan’s bilateral ODA patterns (On average of 2002 to 2003, net disbursement basis) …153 Fig. 5-11 Percentage of regional disbursement DAC leading countries …………………………………………………154 Fig. 6-1 Cooperation to A country and measvres to indivisual schemes …………………………………………………169 Fig. 6-2 Development issues of A country and measures by the scheme formation …………………………………………172 Fig. 6-3 ……………………………………………………………182 Fig. 6-4 The
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