Reforming Official Development Assistance (ODA) in Japan

PROPOSAL - 3.
Ways and Means to Improve the Quality of Assistance

The following are some of Keidanren's suggestions on possible assistance programs to improve quality of assistance.

[3 – 1] Promotion of a comprehensive assistance through packaging

1. Disbursing packaged ODA

   The current assistance menu consisting of combination of grants, loans and technical assistance is not the only possible means of making the best possible combination of effective assistance towards our ODA recipients. Keidanren proposes that assistance menu must be a package of human resources, substance, technology, and money in flexible combination to meet the various needs of recipients. Especially for implementation of regional projects which are expected to grow in number in the future, proper packaging of bilateral and multilateral assistance, and proper packaging with other donor nations and/or international organizations.
   Japan should also open the ways to implement assistance programs that go beyond the boundary of annual budget limitations to honor the requirements that recipients are facing. Multiplicity of assistance means should also be provided. Keidanren suggests to include such means as no-interest loan and dollar-based loan.
   Priority should be given to the area that Japan has specific technological advantages or special expertise. This means to include assistance in the field of environment, energy-saving, and resource-saving. Even though requests for assistance in these specific areas are few, Japan has a distinctive technological advantages and expertise in these areas. We all must remember that not only of our advantages but these are the areas of global concern. Keidanren strongly believes that the Japanese Government must propose these assistance programs under its own initiative.

2. Packaging of ODA and private-sector resources

   Economic infrastructure building in developing countries are increasingly given towards the private institutions in recent years. However, considering their natural tendency to serve public, coupled with risks originating from their non-commercial nature, making a good combination with ODA, and/or financial support and guarantee provided by the World Bank group and other international organizations, are essential. One must understand that without public support, private-sector infrastructure building becomes difficult, and expectation of recipient are not well met as the result.
   The Japanese Government has already initiated several assistance schemes, but it should take more steps to meet raising expectations of the recipients. Keidanren proposes to include: Utilization of development study in conducting feasibility studies and supplying professional staff in operation of facilities through technical assistance schemes; Simplification and reducing the lead-time in providing yen-loan; extending the maximum coverage period of overseas investment insurance scheme; etc.
   Keidanren shall propose on a separate occasion how the private business views the current investment insurance schemes and the function of the Export-Import Bank of Japan.

[3 – 2] Disclosure and production of a information database on assistance programs

The Government has a responsibility to report to its people on how it has been conducting assistance programs and why it has been or not has been conducting such programs. It must always keep in its mind that its people are taxpayers. Through its public relations activities the Government should further try to gain public understanding and support regardless of the Diet debate on the ODA budget, how it has been compiling its official report on ODA, or how it has been compiling its evaluation reports.
In doing so the Government must compile a comprehensive database containing a variety of ODA information including content of projects, and its past achievements. The Internet should also be utilized as one of the possible means of disclosure.
The Government should also review its assistance policies and projects on daily basis. Its assistance database and the pool of expertise will provide good tools for such reviews. It must be remembered that all the efforts are directed towards improving the quality of Japan's assistance programs.