Greater Participation by the Private Sector Can Enhance Japan's ODA

Akio Kosai Vice Chairman of the Board of Councillors, Keidanren President, Sumitomo Chemical Co., Ltd.

Today's trend toward a globalized, market-based economy has had a great impact on the developing countries.
When the monetary crisis erupted in Asia in mid-1997, initially in Thailand, all of Asia was adversely affected. Japan quickly responded by providing substantial public funds, and the countries in the region highly appreciated Japan's assistance. The Asian economic crisis gave us Japanese a renewed awareness that our economy is deeply intertwined with the rest of Asia.

In extending development aid, Japan has emphasized "self-help efforts" by the beneficiary countries themselves through credits and loans. Such a strategy proved by and large successful in Southeast Asia, but not necessarily so in other regions of the world. For example, in the case of countries in Africa and elsewhere, aid funds did not become the impetus for economic growth, and due to various reasons, economic "take-off" has been delayed.

Under the circumstances, there is a need to review Japan's strategy for official developmental aid (ODA). In my opinion, two important issues need to be addressed.
Firstly, as Mr. Wolfenson of the World Bank pointed out, it is necessary to improve coordination among developmental aid institutions by strengthening partnerships with private-sector organizations.
Secondly, in order to better respond to the diverse needs of the developing countries, we need to establish a developmental aid system which takes account of recommendations of local agencies. In addition, we must prepare comprehensive development plans which fully take into account the needs and circumstances of the beneficiary countries in such areas as public health, medical care a and education.

In this respect, I believe that Japan's private sector can play a significant role by utilizing the know-how and expertise it accumulated in the course of Japan's industrial development. Japan's ODA-related activities have been criticized on the grounds that they are not "visible." However, enhanced participation by the private sector and NGOs can, I am convinced, help make Japan's ODA more effective and fruitful.