Study Reports

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Background of the Study

Objectives of the Study

Japan has been providing the largest scale of development cooperation to Brazil among Latin American countries, mainly in the form of technical cooperation and loan aid. This is primarily due to the many years of the close relationship including strong economic ties between the two countries and the imperative of environmental conservation in the Amazon, the necessity of which is recognized worldwide. In its search for more efficient and effective approaches to cooperation and to identify areas of focus for cooperation, Japan has conducted its own country study and has also held policy discussions with Brazil.

In 1990, the Japan International Cooperation Agency (JICA) set up the first Country Study Committee for Japan's Official Development Assistance to the Federative Republic of Brazil. The Study Committee compiled a report of its recommendations. This was followed by a high-level mission on economic and technical cooperation to Brazil by the Government of Japan, and a session of the Policy Consultation and Program Design for Technical Cooperation with Brazil (Policy Consultations) in March 1992. As a result of the discussions, Japan identified four priority areas for its development cooperation to Brazil: the environment, industry, agriculture, and measures to reduce economic disparities and poverty. With respect to technical cooperation, Japan added tripartite cooperation and support for the economic reform initiatives to these four priority areas.

As a result of the Policy Consultation held in January 2001, the priority areas now include the environment, industry, agriculture, public health, social sectors, and tripartite cooperation. Brazil and Japan are set to hold further consultations to specify the issues for these priority areas.

During the 1990s, the international climate affecting both nations and their domestic situations changed significantly. Brazil overcame the hyperinflation that had tormented the country until the early 1990s with the Plano Real during the mid-1990s. As a leading participant in MERCOSUR, Brazil has consolidated its position as an upper middle-income country in the region. On the other hand, the problems of income disparities and poverty have remained serious.

In Japan, the ODA budget has been tightened and subjected to strict public scrutiny with growing internal calls for greater accountability. These circumstances prompted the Ministry of Foreign Affairs to set up the Council on ODA Reforms for the 21st Century in May 2001. The Council members have discussed such issues as effective strategies, guiding principles, and results-oriented approaches to implement ODA reform. In light of the current state and challenges facing Brazil, as well as the circumstances surrounding Japan's international cooperation, JICA set up the second Country Study Committee for Japan's Official Development Assistance to the Federative Republic of Brazil in April 2001. This Country Study Committee was tasked with proposing more efficient and effective approaches for Japan's cooperation and of narrowing down the priority issues for Brazil.

Consisting of 16 members and advisors, and chaired by Dr. Akio Hosono, Professor at the Research Institute for Economics and Business Administration, Kobe University, the Study Committee has held six meetings, since its first session in April 2001. In July 2001, the Study Committee conducted field research in Brazil to update the information and exchange opinions at various levels in government institutions, economic organizations, academia and NGOs. In November of the same year, the Study Committee presented its findings at a public seminar in Tokyo. After listening to the opinions of relevant parties at home and abroad, the Study Committee compiled this report in March 2002.

Structure of the Report

This report is organized as follows. Chapter 1 analyzes the current situation in Brazil and delineates its scenario for medium-term development. Chapter 2 recommends the optimal approach for Japan's cooperation to Brazil. Chapter 3 then proceeds to a summary of detailed analyses, ranging from cross-sectoral to sector-specific aspects: politics, economy, society, international relations, trends in Japan's cooperation, environment, industry, agriculture, social sectors and NGO activities in Brazil.