Country Study for Japan's Official Development Assistance to the Republic of Bolivia Country Study for Japan's Official Development Assistance to the Republic of Bolivia －Towards Increased Human Security and Enhanced Productive Capacity － ボリビア国別援助研究会報告書 －人間の安全保障と生産力向上をめざして－ 〈総論編〉 February 2004 February２００４ IIC IFIC/JICA Institute for International Cooperation JR 03-22 ISBN4-902715-06-6 Country Study for Japan’s Official Development Assistance to the Republic of Bolivia — Towards Increased Human Security and Enhanced Productive Capacity — February 2004 Institute for International Cooperation Japan International Cooperation Agency This report is prepared based on the discussion and findings of the Country Study Committee on Japan’s Official Development Assistance to the Republic of Bolivia by the Japan International Cooperation Agency (JICA). The views expressed in the report are those of the members of the Study Committee and do not necessarily reflect those of JICA. The full text of this report is available in PDF format from JICA Home Page. http://www.jica.go.jp/english/publication/studyreport/index.html Additional copies are also available upon request: Aid Strategy Team, Research Group Institute for International Cooperation (IFIC) Japan International Cooperation Agency (JICA) 10-5, Ichigaya Honmura-cho, Shinjuku-ku, Tokyo 162-8433 Japan Fax: +81(0)3 3269 2185 E-mail:[email protected] Cover photograph: © Japan International Cooperation Agency/Kazuyoshi Nomachi Printed in Japan Foreword The Japan International Cooperation Agency (JICA) has been pursuing a development approach that is designed to be better suited to the stages of development and specific conditions in each developing country. The idea is based on the recognition that, while it is increasingly important to address global issues such as environmental degradation, population growth, and the food problem, developing countries need assistance that is fine-tuned to their respective characteristics as well as to their stages of development. To explore the optimal approach for Japan’s assistance to these countries, JICA has to date organized a total of 42 country-specific study committees on Japan’s official development assistance (ODA) and compiled reports on the results. Among South American countries, Bolivia is the third country that JICA studied in terms of assistance, following Brazil and Peru. Now that 50 years have passed since the 1952 revolution that marked the threshold of Bolivia’s modern history, Bolivia is again at a major turning point in its society and economy. Due to prolonged economic stagnation, income disparities among the people have become more serious, and it is required to reexamine the effectiveness of the PRSP (Poverty Reduction Strategy Paper), which focuses on decentralization and people’s participation. To maintain its governance, the second Sanchez Administration (Aug.2002-Oct.2003) had tried to conclude “pacts” with newly emerging groups, such as groups of indigenous people, who account for the majority of the population in Bolivia. As part of this effort, the Sanchez Administration was trying to further promote dialogues with the people. Bolivia also has significance in terms of international cooperation. It was chosen as one of the pilot countries of CDF (Comprehensive Development Framework) which was initiated by James D. Wolfensohn, President of the World Bank, in 1998. In 2001, Bolivia formulated PRSP, which is defined as an instrument for implementing the CDF principles, and was one of the first to start the process of revising it. In addition, Bolivia is a country to which Japan has provided extensive assistance in various areas for a long period of time. This study committee consisted of the chairman, Dr. Toru Yanagihara, Professor of Takushoku University, other eminent members and advisors, with a support of a task force composed of JICA staff members, and the secretariat, which was responsible for planning and management. Meetings were held ten times. Field surveys were conducted for the collection of information in April 2003 and for the exchange of opinions in September 2003. In September 2003, the study committee held an open seminar in Tokyo to present the study results and to hear opinions from the parties concerned. The results of these discussions are included in this report. In October 2003, a dispute over natural gas exports led to a riot and a change of government in Bolivia. Because this report is mainly based on information collected up to September 2003, it does not fully reflect a detailed analysis on the Mesa Administration, which was established in October subsequent to the collapse of the Sanchez Administration. However, despite the change of i government, we believe that the findings and suggestions in this report are valid as basic perspectives on Bolivia’s development and future directions for Japan’s cooperation to Bolivia. We hope that this report will prove useful to both policy makers and practitioners of assistance program for Bolivia. Finally, we would like to take this opportunity to express our sincere gratitude to the chairman, members, and advisors, as well as the organizations concerned, for their tireless efforts and support in compiling this report. February 2004 Sadako OGATA President Japan International Cooperation Agency ii Preface Bolivia faces a grave problem: reorganization of the political and economic system that, from a historical perspective, has lasted for the past 50 years following the Revolution, or for at least 20 years after the reestablishment of democratic polity. The gravity of the situation was fully revealed in the collapse of the government in October 2003, which took place following the spread and radicalization of antigovernment movements since the beginning of 2000. Because the required reorganization is unlikely to be achieved with a mere change of government, there will likely persist many uncertainties in the search for a new political and economic system. These uncertainties should be squarely kept in mind when Japan considers the future direction for its assistance to Bolivia. In presenting its viewpoints on developmental tasks and prospects, this study committee endeavored to address the fundamental question of the lack of national integration and to present perspectives and goals of future development meaningful for the majority of Bolivian people faced with uncertain prospects for the future, being placed in the middle of economic stagnation and social and political confusion, which have persisted since 2000. Our discussions focused on fundamental factors for understanding Bolivia—the racial, cultural, and regional divisions in Bolivia’s society; the disconnection between macroeconomic growth based on the development of natural resources and the creation of employment opportunities, and the gap between the official, legal, political, and administrative principles and the actual operations and practices. Based on the recognition of these underlying conditions as well as current situations, the committee decided to place priority on the improvement of “livelihood security” at the local level and on the attendant challenge of establishing and strengthening “local systems” for coordination and governance among relevant actors and stakeholders in public and private sectors. We propose that Japan’s assistance to Bolivia aim not only to ensure “livelihood security” but also to contribute to the “enhancement of productive capacity,” a central issue for long-term development. “Local systems,” when properly established and empowered, are expected to provide an effective institutional basis for achieving both of the developmental objectives. On the question of management of aid bureaucracy, the committee has emphasized a drastic and rapid transfer of decision-making authorities from the Tokyo headquarters to local offices in the formulation, implementation and evaluation of policies, programs and projects. This proposal derives from the dual purpose of being able to operate at the municipal level in collaboration with grass-roots actors and to engage effectively with the central government and other donors in policy dialogue and aid coordination. These tasks will inevitably entail relying more heavily on local expertise in the administration of Japan’s ODA. The emphasis we have placed on “livelihood security” and “local systems” traditionally has not received wide acceptance in the Japanese development community. However, we believe that it is appropriate to focus Japan’s assistance on such objectives and systems, because they represent only developmental goals that the majority of Bolivian people can relate to under the condition of iii lingering uncertainties at present and into the foreseeable future. This new viewpoint will likely entail wide-ranging and drastic changes in the system of formulating and operating Japan’s assistance programs. We hope that the current focus on strategy and reform of Japan’s ODA in general will be applied to the concrete case of Bolivia. Lastly, I would like to add my personal opinion to the question of why Japan should provide ODA to Bolivia. This question has arisen in the context of a recent argument in favor of “strategic use of ODA.” The argument is summarized as follows: Because the strengthening of economic relations with important countries in East Asia will serve national interests, Japan should strategically deploy ODA to them to meet this objective. This understanding of “strategic ODA” strikes me as narrow- minded and