Bilateral Relations » Modalities of Japan's ODA
Japan's ODA consists of two forms of assistance: bilateral assistance, which is provided directly to developing countries, and multilateral assistance, which is implemented via international organizations. Bilateral assistance consists of grant aid, technical cooperation, and loan aid.
Japan’s bilateral ODA to the Pacific Region in 2007 as approximately US$70.29 million (Source: Japan’s ODA White Paper 2008, Ministry of Foreign Affairs, Japan).
Assistance through international organizations, supplementing bilateral assistance. Japan is a major subscriber and contributor to international organizations. Along with the growth of Japan's bilateral ODA in recent years, the international community has increasingly called for Japan to play a more active leadership role in multilateral institutions. Consequently, Japan attaches growing importance to aid provided through multilateral institutions.
Multilateral institutions involved in development assistance can be broadly divided into two categories. The first group consists of international financial institutions that primarily provide funds needed for development, while the second group consists of various United Nations agencies which engage in economic, social and humanitarian activities. Contributions and capital subscriptions to the international financial institutions fall under the primary jurisdiction of the Ministry of Finance, while the Ministry of Foreign Affairs is primarily responsible for similar contributions to the United Nations agencies
1. Grant Aid
Grant Aid is financial assistance extended to a recipient country without requiring any repayment. In other words, grant aid covers all bilateral donations excluding those bilateral donations classified as technical cooperation.
(1) Status of Grant Aid
In principle, grant aid extended by Japan is in the form of funds supply. Grant aid is not extended in the form of payment in kind, such as of equipment or facilities or materials, procured by the Government of Japan. The Japanese programs of assistance through grant aid were started in 1968.
(2) Classification of Grant Aid
Grant aid can be broadly classified into the following six elements:
(a) General Grant Aid
(b) Grant Aid for Fisheries
(c) Grant Aid for Environment and Climate Change Issues
(d) Cultural Grant Aid
(e) Grant Aid for Disaster Relief
(f) Grant Assistance for Grassroots Human Security projects Program(GGP)
2. Loan Aid
ODA Loans make development funds available to developing countries at low interest rates and with long repayment periods. These loans provide funds to develop and improve the economic and social infrastructure necessary to support self-help efforts and sustainable economic development for developing countries. JICA is in charge of the major part of ODA loans.
3. Technical Cooperation
Technical cooperation involves the direct transfer of technology to developing countries. Japan attaches great importance to this form of cooperation since it greatly helps nation building through “the development of human resources”, of which much is expected by developing countries and Japan places priority emphasis. The areas covered by technical cooperation programs are highly diverse and include such sectors as education health and medical services, environment protection and promoting income-generating activities which are categorized as the priority areas of assistance by JICA.
Japan’s technical cooperation program basically operates using the following mechanism. The Ministry of Foreign Affairs is responsible for ODA Policy, coordination with the other Ministries/Agencies and basic plans for the programs from the political and diplomatic viewpoints as well as the budget requests to the National Diet of Japan. The ground level implementation is the responsibility of JICA.
Technical cooperation programs are mainly composed of the following:
(1) Delivery of technical training to trainees(in Japan, in-country and in third-country)
(2) Dispatch of experts, survey teams and volunteers from Senior Volunteers (SV) and the Japan Overseas Cooperation Volunteers (JOCV)
(3) Provision of equipment machinery and materials related to the work of the persons mentioned above
(4) Technical cooperation Project, which represents a combination of the three types of cooperation mentioned above in 1-3
(5) Basic survey in relation to development programmes
Apart from the above activities categorized as “Technical Cooperation”, JICA also operates the below schemes for example.
(6) Dispatch of the Japan Disaster Relief Team (JDR) to disaster struck areas overseas to help the people and assist the disaster relief activities in the area caused by natural disasters. JICA is also mandated to procure and provide equipment, machinery and other materials for international emergency relief activities.
(7) To provide Japanese emigrants outside Japan with assistance, guidance, etc., (especially in Central and South America).