THE SAYING ?No man is an island? does not apply to just individuals but economies as well.

Most governments have realized that their economies could better achieve their full potential if they would establish relations, trade or otherwise, with the rest of the world.

Japan, a staunch supporter of globalization, has thus initiated efforts to reach out to its neighbors in Asia and countries farther afield.

The setting up of the Japan International Cooperation Agency (Jica) is one such effort.

Mutual benefit

Jica believes that helping uplift the economies of other countries will ultimately redound to the benefit of Japan.

Japanese assistance to the Philippines started in 1966 when the first Japanese volunteers were sent to the Manila to share their expertise in education, engineering, agriculture and even sports.

Since then, the assistance from Japan has evolved to include grants and cheap loans for development projects.

?Providing assistance to other countries is part of our efforts to pursue globalization. There is no such thing as demand and supply coming from only one country. Countries need each other to address various needs like supply of certain commodities or markets for their goods,? Togo Hiroshi, principal senior representative of Jica to the Philippines, said in an interview with the Inquirer.

Togo said that Japan, like any other country, does not have all the resources it needs. Japan needs to import goods and services from other countries, and also has to have markets for its goods.

But he said some countries needed assistance to fully develop their trade potential.

Japan is one of the Philippines? biggest trading partners.

?Performance of other countries also affects Japan as well, so we wish countries to be more stable because this will help benefit Japanese economy, too,? Matsuda Norio, chief representative of Jica, said in the same interview.

Jica used to just provide grants and technical assistance to countries, while the Japan Bank for International Cooperation (JBIC) extends loans. But in October last year, the tasks have been merged and Jica now handles grants, technical assistance and loans.

Jica, quoting data from the National Economic and Development Authority, said the official development assistance from Japan accounts for 49 percent, or $4.7 billion, of total outstanding developmental loans extended to the Philippines as of 2006.

The amount makes Japan the Philippines? biggest source of ODA, outperforming the Asian Development Bank and the World Bank.

Japan also provides cheap developmental loans.

For the Philippines, Jica charges a standard interest rate of 1.4 percent a year payable in 30 years.

For priority projects ? specifically those geared toward solving environment problems, promoting human resources and supporting small and medium enterprises ? the interest rate is as low as 0.65 percent a year and payable in 40 years.

Togo said one of the major goals of the Japanese government?s assistance to the Philippines is poverty reduction.

?In the Philippines, poverty is still existing in a large scale. Job creation is key to improving household income,? Togo said.

Estimates show that about a third of Filipinos are living below the poverty line.

One way to reduce poverty is to develop the agriculture sector and help farmers get easier access to various markets, both local and foreign, Togo said. This is why the Japanese government has been providing loans to develop the Philippines? farm sector, he said.

?[Japan] remains committed to promote economic development of the Philippines. We are optimistic that through this partnership, the Philippines can soon join the ranks of other countries in the region that have improved their economies partly with the help of ODA from Japan,? Togo said.

Togo said that besides poverty reduction, sustainable economic growth and development of human resources are the major goals of the financial assistance of Japan to the Philippines.

Major projects

One of the biggest projects funded by a loan from the Japanese government is the Subic-Clark-Tarlac Expressway, a 94-kilometer, four-lane expressway north of Manila, which observers said may soon serve as the Philippines? growth corridor.

The Subic-Clark-Tarlac Expressway Project [SCTEP] is intended to grant easy access to northern provinces of the country and make transportation of goods to and from the area much easier.

Another ongoing project funded by Jica is the Logistics Infrastructure Assistance Facility (Linaf). Through Linaf, a re-lending facility managed by the Development Bank of the Philippines, private investors wanting to invest in projects that would enhance the logistics system can borrow money at competitive terms.

Common problems

The Pinatubo Hazard Urgent Mitigation Project is another ongoing project and is in its final stage. The project involves the rehabilitation of areas in Pampanga that were devastated by the eruption of Mt. Pinatubo in 1991. Jica said that upon completion of the project, perennial flooding in Pampanga would already be addressed.

Togo said many Japanese-funded projects in the Philippines have achieved their objectives. However, there were also some projects that have not been able to maximize their supposed contributions to the economy.

A common problem, he said, was the failure of the Philippine government to ensure sustainability of some projects.

?One area that needs improvement is maintenance. Choice of projects, which is done by the National Economic and Development Authority, is good but sometimes implementation is slow or maintenance is poor,? Togo said.

He declined to specify which projects were poorly maintained, but said it was crucial for the government to provide sufficient funds to maintain ODA-funded projects.

Togo said Japan was likewise willing to help improve the government?s fiscal management system so that it will have sufficient capacity to maintain vital projects.

Another problem, according to Matsuda, is the lack of capacity of some local government units to maintain projects transferred to their control by the national government.

Asked about which areas should the Philippine government focus on to better boost its economic growth, Iwakami Kenzo, senior representative of Jica, said more investments should be put in developing human capital.

The Philippines already has sufficient skilled laborers and professionals, Iwakami said, but additional investments in education would help reduce the ranks of the unemployed. ?The strength of the Philippines is in its human resources, and so there should be more investments in that area,? Iwakami said in the same interview.

Togo also stressed the need to end violence in Mindanao. He urged the Philippine government to provide a solution to the long-standing problem of fighting in Mindanao.

?If peace will reign in Mindanao, then this will help uplift its economy. Helping develop the economy of Mindanao will translate to improved economy of the entire country,? Togo said.

Togo added that the Japanese government would continue to support efforts to resolve the problem in Mindanao, adding that peace was vital to achieving economic development.

?By working together, countries will be able to achieve more easily the goals of economic development. Cooperation is the way forward,? Togo said.