Merger creates ODA behemoth

JICA now world's largest bilateral development organization with a ¥1 trillion budget

by Jun Hongo

The merger Wednesday of the Japan International Cooperation Agency with a part of the Japan Bank for International Cooperation is a significant development in the country’s contribution to world stability and peace, Foreign Minister Hirofumi Nakasone said.

With the merger JICA becomes the world’s largest bilateral development organization, with 1,600 employees and financial resources of approximately ¥1 trillion to allocate to projects in more than 150 countries.

JICA, which used to provide technical assistance by dispatching experts to developing countries, will now be in charge of official development assistance loans that JBIC previously provided, as well as economic grants formerly managed by the Foreign Ministry.

“The world today sees a host of issues,” including rising food prices and global warming, Nakasone said at a ceremony in Tokyo, expressing hope that the new JICA will “become one of the world’s best (aid organizations) not only in terms of size but in content as well.”

The overhaul of Japan’s cooperation agencies has merged all three ODA components of technical cooperation, grant aid and concessional loans under a single roof.

A JICA official said the reform could save up to ¥2 billion in annual operational costs through more efficient administration.

JICA President Sadako Ogata told reporters her agency will work on the principle of “three S” — speeding up and scaling up its programs through better coordination, and spreading out its activities to a wider range of beneficiaries, including through grassroots activities.

“Our operations will be inclusive and dynamic,” she said, combining human resources with experience and financial resources.

Ogata added the agency will become a “one-stop” platform for developing countries in need of help.

ODA in the general account budget has continued to shrink. Japan was the largest donor state in 2000 but fell to fifth in 2007 in terms of overall net ODA.

Nakasone said in his speech he will seek to raise the ODA budget, saying Japan ultimately benefits from assisting developing countries and creating stronger bilateral ties.

Ogata said JICA is tasked with achieving quick results to enhance the public’s understanding and persuade it of the importance of ODA.

Diminishing contributions to international development “give other countries in the world (the impression) that Japan is not eager” to provide aid in times of need, she said.

Turing to administering the large budget, Ogata said the agency will not tolerate any misuse of funds.

Four officials from a consulting firm were indicted in August for bribing a Vietnamese official in connection with a Japanese ODA project.

“It’s vital that we operate under high transparency” in terms of budget use, Ogata said.