Study Reports

Abstract of the Report of the Study Committee on Japan's ODA to Central and Eastern Europe

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Background and purposes of this report

After World War II, the countries of Central and Eastern Europe maintained the centrally-planned economic system under long-lasting socialist regimes, but inefficient management resulted in an economic downturn. In 1980, many of these countries began to make gradual progress in reform. After the collapse of the socialist regimes in 1989, they introduced the free market economic system in earnest.

Until 1993, many of the countries in the region that introduced the market economic system suffered a significant economic contraction due to the turmoil associated with the rapid changes in the economic system. However, subsequent progress towards macroeconomic stability and structural reform resulted in economic recovery in many countries. In fact, ten countries, including Poland and the Czech Republic, were admitted to the EU in May 2004. On the other hand, other countries in the region such as Romania and Bulgaria have met a little more than half of the 31 criteria for joining the EU or the so-called "acqui communautaire" (as of December 2002). In the former Yugoslavian countries, the conflicts resulting from intensifying ethnic tensions after 1989, coupled with subsequent NATO air strikes and economic sanctions, dealt a devastating blow to their economies. These countries are still facing a broad range of challenges in many sectors, including refugee assistance, the buildup of socio-economic infrastructure for rehabilitation and reconstruction, and Basic Human Needs (BHN).

Japan's aid to Central and Eastern Europe gained momentum when Japan, at the Arche Summit in 1989, expressed its intention to support the efforts towards a market economy in the region. Japan gradually expanded its aid to cover a total of 18 countries, including the former Yugoslavian countries.

Among the sectors covered are the transition towards a market economy, reconstruction of the economic infrastructure, environmental conservation, as well as humanitarian assistance and BHN for countries that are in the reconstruction phase in the wake of ethnic conflicts.

Contents of this report

This report consists of the following contents.

• Overview of Central and Eastern Europe (Chapter 1),
• Directions for the development of Central and Eastern European countries (Chapter 2),
• Role and significance of Japan's ODA to Central and Eastern Europe (Chapter 3), and
• Optimal approach for Japan's assistance to Central and Eastern Europe (Chapter 4).