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NR2000-7
May 24, 2000

Overseas Economic Cooperation Operation

JBIC Operations in FY 1999

  • 1. Loans, Guarantees and Investments

    Overall Operations

    During FY1999 Japan Bank for International Cooperation (JBIC) made total commitments of 2,546 billion yen and disbursed 2,436.4 billion yen. The outstanding loans and investments were 21,677 billion yen. The commitment total for FY1999 dropped sharply from the previous year's level, 4,648.1 billion yen. This is because financial assistance to Asia decreased after the quick recovery of the Asian economy, and JBIC's commitment returned to the level prior to the Asian Currency Crisis. By region Asia accounted for 60% of the total, constituting the core of JBIC operations. The results of JBIC's "International Financial Operations" and "Overseas Economic Cooperation Operations" are as follows.

    International Financial Operations

    International Financial Operations commitments totaled 1,491.4 billion yen with 269 commitments. By loan objective, there were 57 commitments for export loans amounting to 152.2 billion yen, 37 commitments for import loans worth 133.2 billion yen, 158 commitments for overseas investment loans worth 544.8 billion yen, and 17 commitments for untied-loans worth 661.2 billion yen. Disbursements totaled 1,646.5 billion yen, and the outstanding balance of International Financial Operations amounted to 11,218.3 billion yen.

    By region Asia accounted for 40% of the total International Financial Operations commitments, which is at about the same level prior to the Asian Currency Crisis, since the Asian economy showed a rapid recovery in the past year. Central and South America accounted for 20% of the total International Financial Operations commitments, which is a sharp increase compared to FY 1998 due to large-scale investments related to natural resource development projects.

    Overseas Economic Cooperation Operations

    Overseas Economic Cooperation Operations commitments totaled 1,054.6 billion yen. The breakdown of these commitments is 84 commitments for ODA loans worth 1,053.7 billion yen, and one commitment for private sector investment finance worth 0.9 billion yen. Disbursements were 789.9 billion yen, and the outstanding balance of Overseas Economic Cooperation Operations amounted to 10,458.7 billion yen.

    By region Asia accounted for about 80% of the total Overseas Economic Cooperation Operations commitments, continuing to hold a predominant share. The Special Yen (ODA) Loans established in FY1998 were extended to the port and bridge projects in Vietnam, as well as to a power project in Malaysia.
  • 2. Highlight of JBIC during FY 1999

    Merger

    In line with the Cabinet Decision in March 1995, the Export-Import Bank of Japan (JEXIM) and the Overseas Economic Cooperation Fund, Japan (OECF) merged on October 1, 1999, creating a new institution, Japan Bank for International Cooperation (JBIC).
    JBIC took over JEXIM operations, which include export, import, overseas investment and untied loan facilities, as International Financial Operations, and OECF operations, which include ODA loans and overseas investment finance facilities, as Overseas Economic Cooperation Operations. In addition to the operations taken over from JEXIM and OECF, JBIC has incorporated such new functions as the guarantee for public bonds to let governments of developing countries have broader access to private-sector financial resources.

    The merger aimed at creating synergy by sharing expertise and information networks developed by the respective institutions, while making an explicit distinction between the two types of operations. The merger led to streamlining: nine overlapping overseas representative offices out of 35 established by the respective institutions were consolidated. Despite the opening of the Singapore office in February, this has reduced the number of overseas offices to 27.

    The JBIC's operations in FY 1999 combine the results for the first half of FY1999 for JEXIM and OECF with the results for the second half for JBIC.

    Supporting Asia

    Since the onset of the Asian currency crisis in July 1997, JEXIM, OECF, and subsequently JBIC after the merger, undertook the greatest challenge ever in providing support for Asian countries in economic difficulties. The financial support JBIC provided to Asian economies totaled 5,250.2 billion yen in commitments by the end of FY 1999 (Table 7). With the rapid recovery of the Asian economy, JBIC's financial assistance to Asian countries that were affected by the currency crisis has decreased.

    Of this total, International Financial Operations comprised 1,371.9 billion yen in overseas investment loans to support Japanese affiliates; and 2,155 billion yen in untied loans to assist macroeconomic stabilization and improve the economic environment. Overseas Economic Cooperation Operations amounted to a total of 1,723.3 billion yen in ODA loans, of which 1,524 billion yen was provided to Thailand, 1,165.3 billion yen to Indonesia, 661.3 yen to Korea, 593.3 billion yen to the Philippines, 551.9 billion yen to Malaysia and 754.5 billion yen to other countries.

    In October 1998, "A New Initiative to Overcome the Asian Currency Crisis-New Miyazawa Initiative" was launched, with an assistance package totaling US$30 billion, which was designed to assist Asian countries in overcoming their economic difficulties and to contribute to the stability of international financial markets. JBIC operations comprised US$15 billion of this total and addressed medium- to long-term financial needs for economic recovery in Asian countries, providing comprehensive support by combining International Financial Operations and Overseas Economic Cooperation Operations. Financial support during FY 1999 amounted to five commitments totaling 265 billion yen (US$2.2 billion equivalent) in International Financial Operations and 22 commitments totaling about 365.8 billion yen in Overseas Economic Cooperation Operations. By the end of FY 1999, JBIC had provided in commitments almost US$15 billion allocated to its operations (Table 8). The total for Special Yen (ODA) Loans in FY 1999 was three commitments to Vietnam and Malaysia, amounting to 75.1 billion yen.
    Overseas Economic Cooperation Operations

    JBIC has prepared its medium-term strategy for Overseas Economic Cooperation Operations over the next three years, as set forth in Japan Bank for International Cooperation Law. This will serve as the basic framework for effective and efficient implementation of ODA loan operations, and was announced on December1, 1999.
    This strategy aims at supporting self-help efforts and country ownership for development strategy toward economic takeoffs, as the developing countries address an increasingly diverse development agenda. JBIC will draw on its research abilities and close policy dialogues with the governments of developing countries and consider a menu of facilities to match the needs of individual countries and regions to provide effective and efficient support. The strategy consists of three components: (a) poverty reduction and support for economic and social development; (b) addressing global issues; and (c) support for the structural reform of the economy.

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