OECD Development Co-operation Peer Reviews: Japan 2020

2. Japan’s policy vision and framework

Abstract

This chapter assesses the extent to which clear political directives, policies and strategies shape Japan’s development co-operation and reflect its international commitments, including the 2030 Agenda for Sustainable Development.

The chapter begins with a look at the policy framework guiding development co-operation, assessing whether Japan has a clear policy vision that aligns with the 2030 Agenda and reflects its own strengths. It then examines whether Japan’s policy guidance sets out a clear and comprehensive approach, including to poverty. The final section focuses on the decision-making basis, i.e. whether Japan’s policy provides sufficient guidance for decisions about where and how to allocate its official development assistance.

In brief

The Development Cooperation Charter decided in 2015 underscores the mutual benefits of peace and security and which is well-aligned with the Sustainable Development Goals (SDGs) despite being published beforehand. Japan’s philosophy for development co-operation is based on respect for country ownership and self-reliant development, using the social and cultural values of partner countries as the starting point and building on Japan’s experience and expertise.

Japan intends to reduce poverty and leave no-one behind by investing in quality growth and human security. This includes helping to improve local capacity to grow the economy through technology transfer, human resource development and job creation, and using multilateral channels to complement these efforts. JICA has published position papers on the SDGs, including for Goal 1 on poverty eradication; however, Japan does not yet have a clear approach to poverty reduction nor specific guidance on designing, monitoring and evaluating interventions to maximise their contribution to poverty reduction. Country diagnostic work does not look at the drivers of poverty and vulnerability to determine Japan’s priorities or beneficiaries.

Japan recognises the social, economic and environmental aspects of sustainable development. It has developed specific guidelines for gender mainstreaming and considers the environmental impacts of its investments. It could manage potential positive and adverse environmental and climate-related impacts across its portfolio more proactively, as is already done for gender.

Japan does not have priority partner countries or targets apportioning official development assistance (ODA) to various countries or themes, and it could have a more deliberate approach, for example linking country programming to the SDGs. Instead, it anchors its allocation decisions for grants, technical assistance and loans on country demand. In addition, in making allocation decisions Japan considers its own foreign policy, the role of the country in the region and its influence, as well as its absorptive capacity. For Japan, investing ODA in Asia – including through regional connectivity – is a geopolitical and economic priority, as is expanding public and private investment in sub-Saharan Africa.

Japan principally works government-to-government, though it is expanding towards partnering more with the private sector and continues to work with a range of civil society organisations.

Neither the Ministry of Foreign Affairs (MOFA) or the Japan International Cooperation Agency (JICA) have a multilateral strategy. The Development Cooperation Charter considers the added value of multilateral partners to be their expertise, impartiality, wide networks, capacity for effective and efficient co-operation in sectors or regions less accessible to Japan. Japan has concentrated on a limited number of important multilateral partners with which it holds regular consultations.

Framework

Japan’s development co-operation seeks to contribute to peace, stability and prosperity through inclusive, sustainable and resilient growth that respects country ownership

The objective of the 2015 Development Cooperation Charter is to contribute more proactively to peace, stability and prosperity in the international community (Government of Japan, 2015[1]). Approved in 2015 by Cabinet, the charter is owned across government, and updates the 1992 ODA Charter and the 2003 revision. It underscores the mutual benefits of peace and security and explicitly refers to Japan’s first ever National Security Strategy adopted in December 2013, which itself points to the use of ODA to promote international peace and strengthen universal values (Government of Japan, 2013[2]). The government’s 2013 Revitalisation Strategy, updated in 2016, sees ODA as one instrument to revitalise Japan’s growth (Prime Minister’s Office, 2013[3]) (Prime Minister’s Office, 2016[4]). In sum, the 2015 charter is unprecedented for Japan in “bearing in mind [the] National Security Strategy” and enhancing “partnerships with various actors so as to serve as a catalyst for mobilizing a wide range of resources, including the private sector” (Government of Japan, 2015[1]).

Though approved before the 2030 Agenda was finalised, Japan has shown that the charter reflects the SDGs. The 2030 Agenda challenges Japan to co-operate with a wide range of stakeholders to deliver its development co-operation. Japan emphasises that its own philosophy is to tackle poverty, environmental degradation and economic growth in partner countries first and foremost by respecting ownership and promoting self-reliant development that builds on the social and cultural values of partner countries combined with Japan’s experience and expertise (Government of Japan, 2015[1]). JICA went through an alignment exercise which showed that the charter will help to achieve the SDGs through giving priority to growth that is inclusive and “shared within society as a whole, with no one left behind” (SDGs 1, 3, 4, 5, 8, 10, 16), sustainable (SDGs 6, 7, 12, 13, 14, 15), and resilient (2, 9, 11) (JICA, 2016[5]).

Japan’s thematic and geographic priorities are reinforced by its focus on a Free and Open Indo-Pacific

Asia remains the priority region for Japan’s development co-operation. This close political and geographical relationship directly affects Japan’s security and prosperity. For Japan, support to sustainable development means realising human security and achieving lasting economic growth via human resource development, infrastructure development, support to institutions, and regulatory frameworks that allow the private sector to flourish and developing countries to become self-reliant. Japan emphasises that the inclusive and resilient nature of “quality growth” are requirements for sustainability. This approach allows Japan to build on its strengths – which include human resources, expertise, and advanced technology and systems – in mutually beneficial country partnerships.

Japan’s co-operation is organised into three priority issues. The charter outlines three basic policies: contributing to peace and prosperity, promoting human security, and self-reliant development and collaboration based on Japan’s strengths (Chapter 1). Linked to these basic policies are three priority issues for development co-operation:

1. “Quality growth” and poverty reduction (health, safe water and sanitation, education, quality infrastructure, agricultural development, information and communications technology, and culture and sport).

2. Sharing universal values and bringing about a peaceful society (governance, peacebuilding and humanitarian assistance).

3. Building a sustainable and resilient international community (environment and climate change, disaster risk reduction, and natural resources and energy).

Japan’s focus since 2016 on a Free and Open Indo-Pacific (Chapter 1) brings these three priorities to the fore, and has strengthened Japan’s global presence, including development co-operation, from the Asia-Pacific across the Indian Ocean to the Middle East and Africa.

Principles and guidance

Japan aims to reduce poverty and leave no-one behind through quality growth and human security

Japan aims to eradicate poverty through promoting quality growth and human security. Japan has not defined a clear approach to poverty reduction since the 2014 Development Assistance Committee (DAC) Peer Review (OECD, 2014[6]) The Development Cooperation Charter and JICA’s 2017-21 Medium Term Plan emphasises quality growth and “poverty eradication through this growth” (JICA, 2017[7]). Similarly, JICA’s Position Paper on SDGs: Goal 1 points to Japan’s efforts to eradicate poverty through growth and by promoting human security (2017[8]). Japanese officials have stated that they work to reduce poverty through quality growth combined with self-reliance, promoted through technology transfer and human resource development, with multilateral contributions complementing these bilateral efforts.

Human security is Japan’s “home-grown” version of the 2030 Agenda commitment to leave no one behind. In practice, Japan supports human security via bilateral co-operation1 and also contributions to United Nations (UN) agencies and to the UN Trust Fund for Human Security. The latter funds many projects, including one working to integrate former refugees living in and around resettlement sites in Zambia in partnership with JICA’s human security project (United Nations, 2019[9]). In Ghana, Japan is pursuing its global priority of achieving universal health coverage (UHC), which embodies human security. It has made an important contribution to the Ghana Health Service’s Community-Based Health Planning and Services (CHPS) in the hard-to-reach areas in the upper regions to strengthen community health systems (Annex C). Access has since improved with Japan’s support, even if poverty rates remain some of the highest in the country.

Infrastructure investments enhance access to markets and increase employment opportunities. Japan’s grant aid for infrastructure connects the “breadbasket” of Ghana with urban areas, opening market access for smallholder farmers who would otherwise take longer to get their goods to market or receive lower prices. In Cambodia, support to large-scale infrastructure and the development of the garment industry, an important source of employment for low-skilled women, have gone hand-in-hand (Annex C).

Japan’s multilateral allocations are targeted at reducing poverty. Its allocations to its most important partners, like the World Bank’s International Development Association, the African Development Fund, and the Asian Development Fund, go towards pro-poor programmes in the poorest and most fragile countries.

Japan has no clear approach, guidance or tools to ensure assumptions around growth are being met. While JICA enhanced guidance to strengthen poverty reduction efforts, unlike other members of the DAC, Japan lacks specific guidance on designing, monitoring or evaluating interventions to maximise their contribution to poverty reduction. The lack of country diagnostic work on the drivers of poverty and vulnerability to determine Japan’s priorities and beneficiaries was already noted in the previous peer review (OECD, 2014, p. 34[6]). JICA states that it directly assists the poor and makes "poverty considerations" by incorporating creative approaches into projects to improve the circumstances of the poor. Its country development co-operation policies and project documents describe contributions to the SDGs. Whilst large-scale infrastructure can lead to the creation and spread of growth, complementary measures that consider the depth and geography of poverty in partner countries are fundamental to ensure that this growth translates into poverty reduction.

Japan has developed specific guidelines for gender mainstreaming and considers the environmental impacts of its investments

Japan recognises the social, economic and environmental aspects of sustainable development and has strengthened its approach to cross-cutting issues, but it would benefit from stronger political leadership to champion these across its entire portfolio. In 2015 JICA developed guidelines for gender mainstreaming for 11 different sectors,2 as well as a project management tool, drawing on international guidance. Project proposals are screened and discussed by the gender team in Tokyo at the preparatory stage before the project scope is finalised. For example, a project to improve National Road 5 in Cambodia included incentives for employing female workers in construction works and put in place measures to implement a gender plan, restroom facilities and other conditions for a safe working environment. In 2019 Japan prepared its second national action plan on women, peace and security (Chapter 7). Recently, gender focal points in JICA departments and country offices were identified and received training on women’s empowerment and gender issues, which they also disseminate to stakeholders. At the time of writing, the MOFA was conducting a thematic review on gender to be finalised by March 2020. JICA is also an active participant in the OECD DAC’s Gender Network.

Japan has safeguard and monitoring measures in place for all of its projects and supports partners to put appropriate environmental and social considerations into practice. Monitoring of ongoing projects includes regularly assessing environmental conditions (air and water quality, soil, noise, waste, ecosystem, biodiversity, as well as negative impacts on society such as involuntary resettlement or infringement of the rights of indigenous peoples). However, there appears to be an opportunity to be more proactive in managing any potential positive or adverse environmental and climate-related impacts across its portfolio. This could involve the same approach as for gender: i.e. issuing specific tools across all its investments.

JICA’s Guidelines for Environmental and Social Considerations encourage appropriate consideration of environmental and social impacts, including human rights (JICA, 2010[10]). In Cambodia, there was evidence that Japan advocated on behalf of people displaced by the construction of a bridge funded by Japan to ensure fair compensation, in line with Cambodian law and JICA’s guidelines for environmental and social considerations. Resettlement action plans are commissioned for any project where this risk is identified and these are monitored together with significant environmental and social impacts. Where necessary, JICA supports appropriate countermeasures3 In situations and partner countries where human rights abuses occur, Japanese civil society has been critical that Japan could have done more to uphold human rights when these are violated during the implementation of its investment projects (JANIC, 2019[11]).4

Japan’s expertise in disaster risk reduction (resilience and rebuilding) has supported 80 countries in developing national disaster risk reduction (DRR) strategies, including support for some in mainstreaming DRR. JICA also has both a strategy and guidelines on disability and development, for which it adopts a twin-track approach of mainstreaming and specific projects. For disability-specific projects, JICA builds capacity of government officials and organisations of persons with disabilities, to promote better inclusion of persons with disabilities, for example in South Africa, Mongolia, and Colombia. In Cambodia, the Japanese government also worked with the Mine Action Centre to develop their capacity (Annex C).

Basis for decision making

Japan prioritises partner country ownership and regional connectivity, mainly in its immediate neighbourhood

For Japan, investing ODA in Asia is a geopolitical, diplomatic, and economic priority, as is expanding public and private investment in sub-Saharan Africa. For Asia, the Development Cooperation Charter calls for efforts towards regional development mainly through efforts to strengthen regional connectivity (Government of Japan, 2015[1]). For example, JICA’s investment in widening and improving National Road 5 connecting Phnom Penh and Bangkok promotes the Southern Economic Corridor of the Mekong Region, with spillover effects for the region. Japan is also astute at using regional mechanisms, such as the Association of Southeast Asian Nations (ASEAN), to advance its goals of peace and stability. JICA has solid experience working with partners to develop regional and sectoral master plans that link coastal and urban areas to more rural areas. The African Continental Free Trade Area offers new opportunities for Japan’s public and private investment in Africa, as JICA’s investments for connectivity gain more traction.

Japan does not have priority partner countries or targets apportioning ODA to various countries or themes. Instead it bases its allocation decisions for grants, technical co-operation and loans on demand from partner countries. In deciding allocations, Japan also considers its own foreign policy, the role of the country in the region and its own influence, as well as its absorptive capacity. JICA’s medium-term plan outlines priorities under each geographic and thematic issue in the coming years, and is accompanied by annual plans (JICA, 2019[12]). A number of policy papers and sector strategies both from MOFA and JICA outline priorities and ways of working in many different sectors.5 Japan’s comparative advantage in disaster risk reduction and recovery (Chapter 7) makes it an important partner for small island developing states (SIDS).

Though working mainly with governments, partnerships are becoming broader

Japan works principally with governments, including through its own local government. However, it is expanding towards more partnerships with the private sector. An emphasis on country ownership, reinforced by Japan’s growing share of sovereign loans6 in its ODA portfolio (Chapter 3), makes partner country governments the ideal partner. The Development Cooperation Charter and MOFA’s Fiscal Year 2019 Priority Policy for Development Co-operation, however, prioritise the private sector’s participation in ODA and strengthening the capacity of non-government organisations (NGOs). In each country, funding for different partners, including earmarked funding to multilateral partners, is discussed in the ODA Task Force that includes the embassy and JICA and based on the country’s own needs (Chapter 4). Japan’s partnerships are reflected in its ODA instruments, which include grant aid, Yen loan financing, technical co-operation, the Japanese volunteer scheme, the grassroots grants programme with NGOs, scholarships, and private sector investment finance.

The charter sets out a path for “organically combining” ODA instruments to make the most of technical co-operation, grant aid and Yen loans (Chapter 5). The three schemes can complement each other, for example, facilitating grant aid implementation by building the capacity of responsible organisations through technical co-operation. Technical co-operation is a key feature of Japan’s self-help philosophy; it utilises Japan’s know-how, technology and experience to develop human resources in partner countries, where it is often seen as filling an important gap. For example, over 1 000 Japanese Overseas Cooperation Volunteers were dispatched in 2018 (JICA, 2019[12]). A recent evaluation of the volunteer scheme encouraged Japan to consider the long-term positioning of the JICA Volunteer Program within country assistance policies and rolling plans and to broaden partnerships with universities, private sector and local governments (International Development Center of Japan Inc., 2018[13]). As a result of this evaluation, Japan has sought more consistency between volunteer dispatch plans, country assistance policies and rolling plans; partnerships with the private sector and local government have also been strengthened.7

For Japan, working with civil society and the private sector is essential for SDG 8 (Decent work and economic growth) and SDG 12 (Responsible consumption and production). This primarily involves Japanese civil society organisations (CSOs) and the Japanese private sector. Since the last peer review, Japan has strengthened partnerships with the private sector through public-private partnerships and the provision of technical co-operation, loans and equity, often working with multilateral and bilateral development finance institutions (Chapter 3). Japan also provides ODA to support a variety of surveys (feasibility studies) for Japanese small and medium-sized enterprises (SMEs) and other companies looking to invest in the SDGs and business opportunities in developing countries. Japan could consider the need for clear guidelines and procedures on the use of ODA and other resources in catalysing private sector activities.

The Implementation Guiding Principles for the SDGs promote a stronger role for civil society domestically and internationally (Government of Japan, 2016[14]). Japan supports its civil society financially in three ways: (1) grant assistance for Japanese and local NGOs through MOFA’s Grant Assistance for Japanese NGO Projects and the JICA Partnership Programme and Grassroots Human Security Projects; (2) the Japan Platform, bringing together humanitarian NGOs, the private sector and the government and providing core and earmarked funding (Chapter 7); and (3) NGO subsidies. It also provides capacity building for relatively small Japanese NGOs and holds regular NGO-MOFA and NGO-JICA dialogues. Civil society actors appreciate that they are free to operate in any country or sector of their choice, but the government could do more to recognise them as strategic partners rather than recipients of ODA (as stipulated in its Development Cooperation Charter). In this context, it is notable that MOFA raised an overhead cost rate within the Grant Assistance for Japanese NGO Projects and Japan Platform projects from 5% to a maximum of 15%. Dialogue with local CSOs and protecting civic space in partner countries is not a stand-alone priority in Japan’s programming.

Japan has close links with universities in partner countries, and has a well-established scholarship programme to support civil servants and students to study in Japan. The JICA Research Institute partners with think-tanks across the world, and works to inform JICA’s new strategies and policies. A joint research project with the Global Development Network on the effectiveness of the Kaizen concept (business activities whereby employees continuously work together to improve functions and reduce waste) recently looked at how to apply these lessons to ongoing JICA activities in the field (JICA Research Institute, 2019[15]). Its scholarship recipients and volunteer alumni form a rich pool of educated and open individuals on which Japan could draw to inform its understanding of country contexts (Chapter 5).

Multilateral development co-operation is highly valued for priority themes and regions, and more challenging environments

Japan takes a long-term perspective in its multilateral engagement. It does not have a multilateral strategy, but the Development Cooperation Charter considers the added value of multilateral partners to be their expertise, impartiality, wide networks, capacity for effective and efficient co-operation in sectors or regions less accessible in bilateral co-operation, and the opportunity for synergies between multilateral and bilateral co-operation. Japan has concentrated on a limited number of important multilateral partners. In addition, JICA has a number of memoranda of understanding and co-operation with multilateral organisations and development finance institutions to guide their partnerships in project implementation.

Multilateral ODA is allocated on the basis of priority themes, such as to the Green Climate Fund, the Global Environment Facility and the Global Fund for the themes of environment and global health, and multilateral development banks and the United Nations Development Programme (UNDP) for the human security dimension. Japan and JICA used partnerships with the African Development Bank and the United Nations (UN) organisations strategically to gain a better understanding of the African continent before setting up country offices and growing the bilateral portfolio to Africa.8 Japan provides 20% of its gross aid as multilateral ODA; increasing this share in the ODA budget is difficult.

Multilateral partners reported generous and constructive partnerships with Japan, and encouraged more pooling of resources with other development partners. Japan is the current Chair of the Multilateral Organisation Performance Assessment Network (MOPAN) and uses MOPAN assessments as appropriate to inform allocation and policy decisions. At the board level for each multilateral partner, Japan reinforces its G20 priorities of quality infrastructure, universal health coverage, disaster risk reduction and debt sustainability. In addition to considering the number of Japanese employed by each organisation, annual consultations between the Government of Japan and its main multilateral partners strengthen partnerships and help build trust.

References

[14] Government of Japan (2016), Sustainable Development Goals (SDGs) Implementation Guiding Principles, Provisional translation, Government of Japan, http://www.kantei.go.jp/jp/singi/sdgs/dai2/siryou1e.pdf.

[1] Government of Japan (2015), Cabinet Decision on the Development Cooperation Charter, February 10, 2015, Government of Japan, https://www.mofa.go.jp/files/000067701.pdf.

[2] Government of Japan (2013), National Security Strategy, Government of Japan, http://japan.kantei.go.jp/96_abe/documents/2013/__icsFiles/afieldfile/2013/12/18/NSS.pdf.

[13] International Development Center of Japan Inc. (2018), Evaluation of JICA Volunteer Program, https://www.mofa.go.jp/policy/oda/evaluation/FY2017/pdfs/jica.pdf.

[11] JANIC (2019), Civil Society Report for OECD-DAC Peer Review Japan, https://www.janic.org/wp-content/uploads/2019/12/Civil-Society-Report-for-OECD-DAC-Peer-Review-Japan-2019_final.pdf.

[12] JICA (2019), JICA 2019 Japan International Cooperation Agency Annual Report, Japan International Cooperation Agency, Tokyo, https://www.jica.go.jp/english/publications/reports/annual/2019/c8h0vm0000f7nzvn-att/2019_all.pdf (accessed on 22 February 2020).

[8] JICA (2017), JICA’s Position Paper on SDGs: Goal 1, Japan International Cooperation Agency, http://dx.doi.org/10.1596/978-1-4648-0669-8_ch1.

[7] JICA (2017), Medium-term Plan of Japan International Cooperation Agency, 2017-21, Japan International Cooperation Agency, https://www.jica.go.jp/english/about/organization/c8h0vm000000ks38-att/medium_term_plan.pdf.

[5] JICA (2016), JICA’s Position Paper on SDGs, https://www.jica.go.jp/english/ir/bonds/c8h0vm0000awltie-att/bonds_01.pdf (accessed on 21 February 2020).

[10] JICA (2010), Guidelines for environmental and social considerations, https://www.jica.go.jp/english/our_work/social_environmental/guideline/pdf/guideline100326.pdf (accessed on 6 April 2020).

[15] JICA Research Institute (2019), JICA’s Panel Discussion on “Workers, Managers, Productivity: Kaizen in Developing Countries” Held at GDN Annual Conference in Germany, Japan International Cooperation Agency, https://www.jica.go.jp/jica-ri/news/topics/20191029_02.html (accessed on 23 February 2020).

[6] OECD (2014), OECD Development Co-operation Peer Reviews: Japan 2014, OECD Development Co-operation Peer Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264218161-en.

[4] Prime Minister’s Office (2016), Japan Revitalization Strategy 2016, https://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/hombun1_160602_en.pdf (accessed on 2 March 2020).

[3] Prime Minister’s Office (2013), Japan Revitalization Strategy - Japan is Back, https://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/en_saikou_jpn_hon.pdf (accessed on 20 February 2020).

[9] United Nations (2019), Promoting Human Security Through Sustainable Resettlement in Zambia, https://www.un.org/humansecurity/hsprogramme/promoting-human-security-through-sustainable-resettlement-in-zambia/ (accessed on 22 March 2020).

Notes

← 1.  JICA also conducts various human security projects, including ones in conflict-affected areas.

← 2.  Basic education; natural environment conservation; urban and regional development; governance; transportation; water and sanitation; agriculture and rural development; health; environmental management; natural resources and energy; and disaster risk reduction. Available at: www.jica.go.jp/english/our_work/thematic_issues/gender/materials.html.

← 3.  An example of a recent Resettlement Action Plan for the Mombasa Gate Bridge Construction Project in Kenya can be found here: www.jica.go.jp/english/our_work/social_environmental/id/africa/kenya/c8h0vm00009praz8-att/c8h0vm0000eu3o4t.pdf.

← 4.  Allegations of human rights abuse include the forced relocation (under threat of legal action) of farmers to make room for the Thilawa Myanmar Special Economic Zone in 2014 paid for by ODA private sector financing; and the trilateral co-operation project, Prosavana, a programme that brought Japanese and Brazilian expertise to Mozambican agriculture and that led to a revolution as smallholder farmers were pushed to eliminate traditional ways of cultivation. See www.ajf.gr.jp/lang_ja/ProSAVANA/docs/analysis2.pdf for Japanese civil society’s 2016 Analysis Paper.

← 5.  JICA has 20 position papers on thematic issue areas ranging from education, to information and communications technology, and social security that can be found here: https://www.jica.go.jp/english/our_work/thematic_issues/index.html.

← 6.  Only a small volume of loans are non-sovereign loans to private sector entities.

← 7.  The Private-Sector Partnership Volunteer programme and the Special Programme for School Teachers are two examples of programmes to strengthen partnerships with private sector and local government.

← 8.  Based on authors’ conversations with multilateral partners.