ESRI Discussion Paper Series No.16 The Impact of Japanese Economic Cooperation on Asian Economic Development By

The views expressed here are solely those of the author; they do not represent those of any bodies with which the author is or has been associated. The quality of aid has been a worldwide concern in the wake of September 11, 2001. On the other hand, Japan’s massive amount of Official Development Assistance (ODA) to the Asian economies has been questioned by the Japanese people. The main objective of this paper is to overview the developments of Japan’s ODA and assess, in a quantitative manner, their economic impacts on Asian countries. Japan was the world’s largest donor during the 1990s, although its ODA to GNI ratio remains lower than the UN target of 0.7 per cent. Notable features of Japan’s ODA include a) a high percentage of loans, in particular to Asia, and b) high weighting for economic infrastructures. Asian economies have become increasingly important trade partners for Japan. Among others, China’s share increased in a distinguished manner in the 1990s and recently reached at around a tenth of Japan’s trade. Although Japanese outward FDI into the Asia