VZCZCXRO5072
RR RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3093/01 3112259
ZNR UUUUU ZZH
R 062259Z NOV 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 8608
INFO RUEHFK/AMCONSUL FUKUOKA 0819
RUEHNAG/AMCONSUL NAGOYA 8869
RUEHNH/AMCONSUL NAHA 3180
RUEHOK/AMCONSUL OSAKA KOBE 4604
RUEHKSO/AMCONSUL SAPPORO 1391
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHAAA/NSC WASHDC
RUEATRS/TREASURY DEPT WASHDC

UNCLAS SECTION 01 OF 02 TOKYO 003093 
 
SIPDIS 
 
STATE PASS USAID - KAREN TURNER (ODP) 
 
E.O. 12958: N/A 
TAGS: EAID ECON PREL JA
SUBJECT: PERSPECTIVES ON THE "NEW JICA", THE WORLD'S 
LARGEST AID AGENCY 
 
¶1. (SBU) SUMMARY: The reorganization of the Japan 
International Cooperation Agency (JICA), which recently 
announced its largest foreign assistance project loan to 
date, has not slowed Japan's overseas development assistance 
programs.  The Japanese government expects the new JICA, 
which consolidates the GOJ's ODA yen loans, grant aid and 
technical assistance which were previously divided among the 
Ministry of Foreign Affairs and the Japan Bank for 
International Cooperation (JBIC), to streamline Japan's ODA 
program.  The new JICA is reportedly the world's largest 
bilateral development organization in terms of the amount of 
ODA it directly administers.  Some analysts and senior 
officials hail the reorganization as a way to make Japanese 
aid more efficient and systematic amid declining ODA funds. 
Others within JICA, however, report differences in 
organizational culture will take time to smooth out, 
something which may stymie large-scale operational reform in 
the short-run. END SUMMARY. 
 
------------------------------------ 
Toward More Efficient, Effective Aid 
------------------------------------ 
 
¶2. (U) The Government of Japan officially consolidated its 
aid organizations into the new JICA on October 1, an event 
JICA President Sedako Ogata called a "major historic turning 
point" for Japan's ODA.  JICA, which previously administered 
Japan's technical assistance program, absorbed the overseas 
economic cooperation operations portfolio from the Japan Bank 
for International Cooperation and the overseas development 
grant-making function from Japan's Foreign Ministry.  Under 
the new scheme, JICA is responsible for USD 10.3 billion in 
development funds, and, by the agency's own estimate, is now 
the world's largest bilateral development organization. 
 
¶3. (U) In the month since JICA's reorganization, analysts 
have generally praised the merger and said it will enhance 
the efficiency of Japan's ODA programs, despite the size of 
the agency.  Takushoku University President Toshio Watanabe, 
an expert on Japan's development program who has chaired 
MOFA's Advisory Council on International Cooperation, praised 
the reorganization as a way to make Japan's ODA more 
systematic.  Media have noted the new JICA will now be able 
to implement a comprehensive, country-by-country based ODA 
program, as opposed to the previous framework in which MOFA, 
JICA and JBIC each conducted their own research and each had 
their own implementation strategy.  Calling the 
reorganization a "good first step", MOFA Director General for 
International Cooperation Masato Kitera told emboffs the new 
approach will enable the GOJ to keep "one set of eyes" on a 
country's development aid from program formulation through 
implementation and execution, and he fully anticipates JICA 
will make Japan's ODA more effective.  (NOTE: While MOFA will 
continue to set Japan's broader development strategy and 
coordinate the GOJ's participation in multilateral 
development initiatives, the shift of overseas grant aid to 
the new JICA removes MOFA from the direct administration of 
foreign assistance.  END NOTE.) 
 
-------------------------- 
Working Level Perspectives 
-------------------------- 
 
¶4. (SBU) The new JICA not only integrates the Japan-based 
offices of JBIC, JICA and MOFA, but also integrates Japan's 
in-the-field development programs.  At the end of October, 
JICA had 55 offices abroad and JBIC had 19; these 74 offices 
reportedly will be consolidated into 56 offices.  A JICA 
Middle East and Europe Division official told emboff the 
integration is already proceeding, including of interagency 
communications.  (Note: JICA officials were already handing 
out business cards with the new JICA logo and contact 
information at a reception shortly before the official 
reorganization).  The official said some differences in 
organizational culture between the finance-oriented former 
JBIC staff and the development-focused JICA technical 
personnel may take time to resolve, but he did not anticipate 
a negative impact on overseas development operations. 
 
¶5. (SBU) An official in the international research office at 
the Japan Finance Corporation, which retained JBIC's non-ODA 
related finance functions, was more pessimistic about 
 
TOKYO 00003093  002 OF 002 
 
 
short-term efficiency gains.  She told emboff former JICA and 
JBIC elements have yet to "get used to working together" in a 
single agency.  The official described the new JBIC 
immediately following the reorganization as full of confusion 
and internal communication difficulties, and pointed to 
other, more mundane things like separate cafeterias for JBIC 
and JICA staff within the agency's headquarters as examples 
of what needs to be addressed before the agency's parts are 
fully integrated.  The official said some within JBIC view 
the spin-off of the ODA functions to JICA as an "unhappy 
divorce" similar to the "unhappy marriage" that arose when 
the then-Export-Import Bank of Japan and the Overseas 
Economic Cooperation Fund merged to become JBIC in 1999.  She 
speculated morale may suffer as more senior JBIC staff who 
went through the first integration now see the overseas 
economic cooperation portfolio spun-off again and so question 
the point of the reorganization. 
 
¶6. (SBU) Comment.  Unification of Japan's ODA functions under 
a single decision-maker should result in more effective and 
efficient development assistance at the planning and 
disbursement levels.  The new JBIC culture will take time to 
develop, as any organizational merger of this size, and 
requires management and staff to "buy into" the new larger 
entity.  There are differences over how quickly and well the 
organizations will merge over the near term into the new 
JICA, but the working-level perspectives suggest little 
visible change in operations from an aid recipient or donor 
coordination standpoint.  End Comment. 
SCHIEFFER