The government is planning to break up the Japan Bank for International Cooperation (JBIC) as an integral part of reforms aimed at the nation's official development assistance (ODA) program. The bank's international finance division will be reorganized into a new government-run financial institution, while the yen-loan division -- which makes yen-denominated loans on easy terms -- will be merged into the Japan International Cooperation Agency (JICA), which is in charge of technical assistance. At the same time, free financial-assistance projects, now under the control of the Foreign Ministry, will be transferred to JICA.
As a result, JICA will become the sole implementing agency for ODA, concessionary aid to developing countries. Also in the works is a plan to create a "strategy council on external economic cooperation" reporting directly to the prime minister.
The purpose of these plans is to establish an integral ODA system so that Japan can provide more efficient and effective assistance from the strategic perspective. Now that the role of JICA has been broadly redefined -- how to handle the agency had been left unresolved due to controversy over the proposed integration of government-managed financial institutions -- the government is ready to send an administrative reform bill to the Diet this month.