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Japan's Official Development Assistance Fact sheet released by the Bureau of East Asian and Pacific Affairs U.S. Department of State, June 26, 2000

Since 1991, Japan has been the world's largest foreign aid donor. In 1998, Japan dispersed bilateral aid in the amount of $8.6 billion, and aid through multilateral institutions in the amount of $2.125 billion for a total of $10.73 billion. (That year, the United States was the second largest donor at $8.13 billion.) Japan also plays an important leadership role in multilateral fora in the formulation of policy and implementation of development assistance.

About sixty percent of Japan's aid is devoted to Asia, and a significant share is provided for large infrastructure projects in sectors such as power generation, transportation, and communications. However, Japan has gradually been diversifying its geographic focus to include the Middle East, Latin America, Africa, and Eastern Europe. Japan has also begun to broaden the scope of its aid projects to include non-infrastructure sectors.

Japan's current domestic economic malaise has necessitated a reevaluation of Official Development Assistance (ODA) spending levels and practices. Japan has thus been engaged in ODA reform efforts, including a reorganization of its two implementing institutions: Japan International Cooperation Agency, which is responsible for grants and technical assistance, and the Japan Bank of International Cooperation (JBIC), which administers long-term loans. JBIC was created in October 1999 with the merger of the Japan Export Import Bank (JEXIM) and the Overseas Economic Cooperation Fund (OECF).

In addition to other reform, Japan's Medium-term Policy on Official Development Assistance, published in August 1999, declares the intention to consider "increased opportunities for Japanese business to participate in ODA" engendering criticism that Japan is returning to the practice of "tied aid" loans. The grant share of Japan's assistance -- the purely concessional type of aid that may legitimately be tied -- was 39.6 percent for 1996/97, ranking it the lowest among the major donors.

Through the U.S.-Japan Common Agenda for Cooperation in Global Perspective, the United States' and Japan's development assistance communities work together to address global issues, such as the HIV/AIDS epidemic, rapid population growth, child health issues, food security and environmental degradation. This cooperation ranges from large government-to-government assistance programs to small "grassroots grant" projects run by non-governmental organizations.

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