Vietnam's position in Japan's foreign relations policy has been steady even in the time of the latter's economic slump.
Japan is applying a 10% cut to its foreign aid due to economic difficulties; for example Indonesia - one of the recipients of Japanese aid - will see its official development assistance (ODA) drop by more than 50%, from US$1.6 billion to US$720 million, in 2002. Vietnam has succeeded in persuading Japan out of taking a similar move with it.
During the past 10 years, the total Japanese ODA received by Vietnam has reached 750 billion yen (around US$600 million), including nearly US$130 million in non-refundable aid, making up more than 40% of the total committed by world donors.
Japan always considers the high importance of Vietnam. ODA helps Japan strengthen its position in Vietnam and enables Japanese businesspeople and technology to better penetrate the second most populous ASEAN country. The Japanese ambassador to Vietnam, Yamazaki Ryuichiro, asserted, "Cooperating with Vietnam contributes to the stability and development, not only of Vietnam, but also of the region Japan has invested for the sake of Japanese interests."
In a ceremony held by the Vietnamese Government to mark 10 years of the resumption of Japanese ODA to Vietnam, Deputy Minister of Planning and Investment Vo Hong Phuc surprised the audience by delivering a speech which focused on human resources and infrastructure development-the two fields absorbing 70% of Japanese funding. As assistance in social affairs has become a leading trend to donors, Japan has given priority to assistance for human resources development. In addition to developing and equipping hundreds of elementary schools and upgrading vocational schools, as well as improving the capacity of some universities, Japan has provided upwards of US$7 million to establish two human resources cooperation centers in Hanoi and HCM City. These two centers frequently organize training courses, seminars and information exchanges on the Japanese market and economy for Vietnamese businesses. Nischida Tsuneo, chief of the Economic Cooperation Department of the Japanese Foreign Affairs Ministry, said, "It is the hardworking Vietnamese people who are the irreplaceable resources and will be the key to the development of Vietnam in the future."
The Japanese ambassador to Vietnam said Vietnam currently has two tough tasks ahead, they are, "constructing the country" and "consolidating the regime" in a relatively limited time since the country has committed its full participation in the ASEAN Free Trade Area by 2006 and has begun talks on joining the World Trade Organization. "Vietnam is undergoing its most important period," he said. Aware of this, since December 1999 Japan has carried out a cooperation program that concentrates on contributing ideas to Vietnam's law-making efforts and the rearrangement of its laws, as well as training its manpower. One example is the flexible use of technical cooperation frames to assist in the completion of civil and commercial acts. There are projects that have not been carried out before by Japan, such as one directed by Prof. Ishikawa to organize joint research between a group of Japanese professors and Vietnamese experts in charge of policymaking in the fields of macro economy, industry, agriculture and rural development, and State-owned enterprise reform. Relevant petitions presented by the experts have been reflected in Vietnam's long-term development plans. This is the first time the Japanese Government has carried out a project on macro policy consultation for another country. Kawamura, managing director of the Japan Bank for International Cooperation, said, "The implementation of structural reform is facing many difficulties, but we highly appreciate the Vietnamese Government's commitment to economic reform."
Japan realizes that Vietnam has abundant natural resources and hence needs more infrastructure for production. Japan focuses mainly on assisting in the development of electricity, water supply and transportation. With its ODA, Japan is helping Vietnam develop a complete road system, initially national artery roads such as National Highway 5 linking Hanoi with Haiphong, national highways 18 and 10, bridges on National Highway 1A, and urban transport systems in big cities. Vietnam's electrical power system including large thermal and hydro power plants and power line and distribution systems such as Pha Lai, Ham Thuan-Da Mi, Dai Ninh, Phu My 1 and O Mon have been developed with Japanese yen.
Three other fields of Japanese interest will include assisting in the transformation of the structure of plants in agriculture, development of education and healthcare, and environmental protection. Technical cooperation in the form of projects has resumed with the Cho Ray Hospital (HCM City) project and will continue with the Bach Mai Hospital (Hanoi) and a project on mother and child health.
"We don't think that the economic success Vietnam has obtained during the past 10 years has come from Japanese aid," Nischida said. "However, it can be said that we have worked hard on the development of the Vietnamese economy, and fortunately the cooperation of Japan during the past 10 years has been an important catalyst for speeding up Vietnam's economic development."

Japanese ODA for Vietnam
(Unit: US$ million)
 

Year	1998	1999	2000
Grant disbursement	101.4	146.5	138.1
Loan disbursement	287.2	432.5	711.9
Total	388.6	579.0	850.0