The OECD/DAC’s New Development Strategy Report of the Issue-wise Study Committee for Japan’s Official Development Assistance vol. 2 Sectoral Studies March 1998 The Issue-wise Study Committee for Japan’s Official Development Assistance on the “DAC’s New Development Strategy (NDS)” Organized by Japan International Cooperation Agency This report is based on the discussion and findings of the Issue-wise Study Commit- tee for Japan’s Official Development Assistance on the “DAC’s New Development Strategy (NDS)” organized 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 and its affiliated organizations. Additional copies of this report are available upon written request from: the Institute for International Cooperation (IFIC) the Japan International Cooperation Agency (JICA) 10-5 Ichigaya, Honmura-cho, Shinjuku-ku, Tokyo 162-8433 JAPAN First Printing March 1998 List of the Committee Members Chairperson Yoshiaki ABE Visiting Professor, Institute of Asia-Pacific Studies, Waseda University Visiting Development Specialist, JICA Poverty Hideki ESHO Professor, Faculty of Economics, Hosei University Cooperation Akira KASAI Special Technical Advisor, JICA Method Cooperation Kaoru HAYASHI Senior Economist, Method Director for Development Assistance Studies Method, The Research Institute of Development Assistance, The Overseas Economic Cooperation Fund(OECF) Zimbabwe Katsumi HIRANO Economist, Development Studies Department, Africa Project, The Institute of Developing Economies Environment Senro IMAI Development Specialist, JICA Ghana Ichiro INUKAI Professor, Faculty of International Relations, International University of Japan Cambodia Shigeru ITOGA Coordinator, Economic Cooperation Department, The Institute of Developing Economies Health Care Etsuko KITA Chief Field Support and Logistics, Emergency and Humanitarian Action, WHO (Formerly, Director, Expert Service Division, Bureau of International Cooperation, International Medical Center of Japan) Education Seiji UTSUMI Professor, Faculty of Human Sciences Osaka University (in alphabetical order) List of the Task Force Members Chief Nobuhiro KOYAMA Development Specialist, Institute for International Cooperation, JICA Advisor Naoko AMAKAWA Current Affairs Department, (Cambodia) The Institute of Developing Economies Advisor Tsutomu TAKANE Development Studies Department, Africa (Ghana) Project, The Institute of Developing Economies Advisor Yumiko TANAKA Development Specialist, (WID) The Institute for International Cooperation, JICA Advisor Akio NISHIURA Lecturer in African Studies, (Zimbabwe) Soka University Ghana Kimio ABE Third Regional Division, Planning Depart- ment, JICA Aid Trends Tetsuya HARADA Country Officer, 2nd Division (Africa Region), Operations Department III, OECF (Until August 1997) Aid Trends Ryouji KIMURA Country Officer, 2nd Division, Operations Department III, OECF (Since September 1997) Cambodia Hideaki MARUYAMA First Regional Division, Planning Department, JICA (Until September 1997) Poverty Hiromichi MURAKAMI Research and Development Division, Institute for International Cooperation, JICA (Until March 1997) Health Care Nakae NOGUCHI Associate Development Specialist, Planning Division, Medical Cooperation Department, JICA Poverty Yuriko SATO Deputy Director of Technical Personnel Devel- opment Division, Institute for International Cooperation, JICA Aid Trends Atsuko SAITO Project Officer, Environment & Social Develop- ment Division, Project Development Department, OECF (Since September 1997) Education Mitsuyo SHIDA Research and Development Division, Zimbabwe Institute for International Cooperation, JICA (Researcher. Japan International Cooperation Center) Cambodia Kazuyoshi SHINOYAMA Research and Development Division, Institute for International Cooperation, JICA (Since April 1997) Aid Trends Motoyuki TAKAHASHI Project Officer, Project Planning Division, Project Development Department, OECF (Until August 1997) Overview Hiroshi TANABE Planning Division, Planning Department, JICA Environment Kunihiro YAMAUCHI Deputy Director of Environment, WID and Other Global Issues Division, Planning Department, JICA (in alphabetical order) Report of the Study Committee on the DAC’s New Development Strategy Volume 2 Sectoral Studies Table of Contents I. Poverty 1. Poverty Issues in the DAC’s New Development Strategy .................... 1 1.1 Extreme Poverty .................................................................................................. 1 1.2 Setting of Goals by Each Nation ......................................................................... 1 1.3 Comprehensive Approach toward Development ................................................ 2 2. Poverty-related Points at Issue: Major Discussions ............................. 3 2.1 Relation between Market and Development ...................................................... 3 2.2 Development of Human Resources and Poverty ................................................ 4 2.3 Unemployment, Employment, and Poverty ....................................................... 6 2.4 Income Distribution and Poverty ........................................................................ 7 2.5 Gender and Poverty ............................................................................................. 8 2.6 Structural Adjustment and Poverty ................................................................... 10 3. Considerations in Applying the DAC’s New Development Strategy 11 3.1 Relation between Development Strategies and Poverty Projects ..................... 11 3.2 Goals of Poverty Projects ..................................................................................... 12 3.3 Problems in Measuring Poverty .......................................................................... 14 3.4 Various Types of Poverty Projects and Targeting .............................................. 16 3.5 Monitoring of Poverty Projects ............................................................................ 17 4. Aid Trends (Poverty) .......................................................................................... 18 4.1 Japan’s Aid Trends and Characteristics in Poverty Alleviation ....................... 18 4.1.1 Japan’s ODA trends ....................................................................................... 18 4.1.2 JICA’s efforts .................................................................................................. 21 4.1.3 OECF’s Efforts ................................................................................................ 25 4.2 Trends among Major Aid Organizations ............................................................ 29 4.2.1 World Bank ..................................................................................................... 29 4.2.2 The United Nations Development Programme (UNDP) .............................. 31 4.2.3 The USA .......................................................................................................... 31 4.2.4 The UK ............................................................................................................ 33 4.2.5 Canada ............................................................................................................ 34 4.2.6 Sweden ............................................................................................................ 36 5. Framework for Japan’s Assistance for the Implementation of the DAC’s New Development Strategy (Poverty) ............................... 38 5.1 Basic Perspectives ................................................................................................ 39 5.2 Priority Areas and Issues .................................................................................... 39 5.3 Challenges and Considerations ........................................................................... 41 5.3.1 Setting Short- and Medium-term Objectives ................................................ 41 5.3.2 Establishing Guideline ‘Considerations for the Poor’ .................................. 41 5.3.3 Drawing up a Grand Design for Development and its Implementation Capacity Building .......................................................................................... 41 5.3.4 Promoting Poverty Projects and Its Networking .......................................... 42 5.3.5 Improving Poverty Project Efficiency ............................................................ 42 <Table Legend> Table 2.1 Private Rate of Return and Social Rate of Return (%) of Education: Average Value ........................................................................................... 5 Table 4.1 Sectoral Distribution of Bilateral ODA (1996) ........................................ 19 Table 4.2 Breakdown of DAC Countries’ Bilateral ODA by Sector (1994) ............. 20 Table 4.3 Geographical Distribution of Bilateral ODA ........................................... 20 Table 4.4 Outline of JICA’s Major Poverty alleviation Projects ............................. 24 Table 4.5 Examples of Projects Directly Targeting Poverty Reduction by OECF . 28 Table 5.1 Priority Areas and Issues in Assistance for Poverty Reduction ........... 41 <Figure Legend> Figure 4.1 Projects Approved for the World Bank and IDA Assistance by Region, Fiscal Year 1997 ........................................................................................ 30 Figure 4.2 Trends in IBRD and IDA Lending, Fiscal