Many of you have read on Devex about the merger between the Japan International Cooperation Agency and Japan Bank for International Cooperation. Sadako Ogata, the venerable 82-year-old president of JICA and now the president of "New JICA" - as the merged institution, born on Oct. 1, is commonly known - is in Washington, D.C., making the rounds and attending annual meetings of the World Bank and International Monetary Fund. She dropped by an Oct. 15 luncheon at the Brookings Institution, where she was the honored guest and spoke about Japanese aid.
As Japan's bilateral grant aid agency, JICA has long focused on technical assistance. JBIC provides soft loans (at cheap interest rates) for infrastructure projects like roads and water systems. Historically, the two institutions have been separate and had very different cultures: JICA has a Peace Corps feel (and, as Ogata mentioned, sends 3,000 volunteers on missions around the world every year), while JBIC is culturally closer to an investment bank. JICA comes out of the Ministry of Foreign Affairs whereas JBIC is closer to the Ministry of Finance. It's diplomats vs. bankers - you get the idea.
This is the big challenge for Ogata: Getting JBIC and JICA to merge in practice rather than just in name will be tough. But if anyone can do it, she can.
While we ate a lovely lunch of chicken and wild rice (doing development in D.C. is no hardship post), Ogata summed up New JICA with "three S's": scale up, speed up, and spread out. By bringing together JICA and JBIC, New JICA will be one of the world's largest foreign aid agencies - rivaling the World Bank in annual grants and loans. This is what Ogata means by "scale."
She also wants to get the bureaucratic wheels turning at a faster pace - closer to the speed at which humanitarian aid hits the ground, rather than the sometimes sluggish development aid. And rather than focusing on Japan's neighbors in Asia, Ogata wants New JICA to "spread out," especially to Africa.
Homi Kharas, Brookings' man on aid effectiveness, brought up the key point of the luncheon - coordination. How will Japan, long operating in its own orbit, coordinate efforts with both traditional and emerging donors even as it tries to coordinate its own efforts internally? Ogata has the scale she wanted; time will tell whether she can make this giant agency work effectively. I wouldn't bet against her.