On Oct. 1, the Export-Import Bank of Japan (JEXIM) and the Overseas Economic Cooperation Fund (OECF) were integrated to form the Japan Bank for International Cooperation (JBIC). For the new bank to effectively lead the way in Japan's economic cooperation program in the 21st century, the Asahi Shimbun Asia Network (AAN) presents the following proposals based on joint discussions with experts:

(1) JBIC must strengthen its independence and advance its expertise in aiding developing nations to prevent economic crises.
(2) It should promote efforts by developing nations to help themselves and stick to complementing market mechanisms and private businesses.
(3) It should cooperate with nongovernmental organizations to strengthen the civil society of developing nations.

　　　　　　　　　　　　＊＊＊

　While JBIC was established as part of Japan's administrative reform, the integration of the two organizations, whose main functions differ greatly, appears somewhat unnatural. JEXIM's main concern is business, while that of OECF is foreign aid.

　In fact, it creates the impression that the government, in its haste to achieve administrative reform, impetuously went ahead with the plan without seriously debating how economic cooperation should be reformed.

　Starting in 1999, JEXIM and OECF have jointly organized briefing sessions on JBIC in a number of developing countries and international financial markets.

　Political motives within the Liberal Democratic Party also had a lot to do with the decision to bring the two organizations together. At one time, the Japan Development Bank, which lends funds to businesses for investment in domestic plant and equipment, was named as a candidate for a merger with JEXIM. In March 1995, however, in the final phase, an abrupt decision was made to integrate it with OECF.

　While JEXIM was a governmental financial institution, it was a "bank" whose concern was to make a profit mainly by extending loans to companies. By contrast, OECF provided low-interest, long-term funds in the form of official development assistance (ODA) to developing countries. Both organizations were run with funds from treasury investments and from a loans program. In addition, OECF received funds from the government's general account budget.

　Besides the different natures of the two organizations−"business" and "aid"−the traits of their workers and sources of revenue were also different.

　As such, the abrupt integration seemed unnatural to other countries and aid specialists.

　In particular, for eight years in a row, up to last year, Japan was the world's top ODA provider.

　Among the recipients of Japan's foreign aid, there is apprehension that OECF's integration with JEXIM could work against them. Some are concerned that, as a result of the integration, like JEXIM's funds, Japan's huge ODA would be used more to support Japanese companies than to help developing nations.

　In response to such worries, JBIC Governor Hiroshi Yasuda, who formerly headed the Export-Import Bank, said the new bank will maintain separate accounts for non-ODA operations formerly handled by JEXIM, and ODA, clearly distinguishing between the two. He also stressed that the integration would improve the overall efficiency of the new bank because financial cooperation with developing countries will be brought under unified control.

　When JEXIM was established in 1950, it set up a "Southeast Asia Development Cooperation Fund," which was separated in 1961, forming OECF as an independent entity. Since they were originally "sister organizations," some people stress that it is natural for the two to get back together again.