Private Sector Development
A - Overview
Various benefits can be expected to emerge when private businesses are established and become active. For example, the creation of employment opportunities for people living in rural villages will drive growth in household incomes. In urban areas, the development of various industries will result in the expansion of national economic activity through growth in exports, imports, and investment. In today’s business environment of economic globalization, it is also necessary to improve the competitiveness of local industry in developing countries.
Accelerated development led by the private sector will expand national economic activity and create employment, raise incomes, and improve living standards.
Our private sector development reviews the role of national governments and provides support to bring about private vitality, aiming for economic growth that benefits not only the private sector but also the entire society of a developing country.
B - Our Efforts
Our cooperation in private sector development is centered on East Asia, which has achieved outstanding economic development, with a focus on vitalizing private corporations, main actors, and building an environment that facilitates private sector development. The following factors lie in the background of this policy: shift from the conventional economic structure led by the public sector to one centered on economic activities of the private sector; an increasing need for a response to economic globalization due to regional progress of a horizontal relationship of economic dependency, such as World Trade Organization (WTO) and Economic Partnership Agreement (EPA). This movement has been expanding from East Asia to Latin America, Middle East and Africa, where the importance of poverty reduction through economic growth was declared in the International Conference on African Development, and our support has been extended accordingly.
Many developing countries have problems in the sectors of health and basic education; however, social and economic infrastructure won’t be stabilized unless employment opportunities are secured through the promotion of SMEs and support for entrepreneurship. It is assumed that in many countries riots and ethnic conflicts stem from serious social unrest due to loss of employment opportunities. Unless such social unrest is solved, stability in regional communities cannot be attained, and therefore, efforts for private sector development to solve employment issues are increasingly important. From this viewpoint, we have provided assistance that leads to the stability of social and economic infrastructure, such as securing employment opportunities, correcting inter-regional income disparities, and considering gender balance in employment, through promotion of SMEs and support for entrepreneurship.
1. Trade and Investment
In order to respond to economic globalization and stabilize and consolidate economic partnerships, activation of trade and investment plays a critical role. That is because trade and investment support economic activities that form the foundation. Cooperation in the area of trade and investment focuses on building an institutional framework, organizational and institutional enhancement of implementing bodies, and human resources development.
In 2019, we implemented technical cooperation projects targeting trade promotion agencies in Indonesia and Egypt. Furthermore, in order to carry out trade and investment activities smoothly, building an environment for trade and investment is critical. As part of such environment-building, in terms of protecting intellectual assets, we support enhancing systems and the capacity of agencies and personnel in charge of intellectual assets countries. We also cooperate in the capacity enhancement of agencies and personnel as well as institution building in the course of creating a standardized approval system, which is a prerequisite for trade promotion.
In addition, though cooperation concerning trade and investment has thus far been implemented primarily in Asia, we have set about formulating concepts to implement trade promotion cooperation in Africa based on South-South cooperation, so as to make use of the experience gained in Asia.
2. Tourism
We dispatche experts to tourism promotion agencies in many countries to develop and promote tourism policies and systems. A technical cooperation project has commenced to develop community-based tourism based on the improvement of museum management.
3. SME Development and Promotion of Industrial Technology
Human resources who can lead the industry are still in short supply in many developing countries, and policies and systems to foster SMEs are underdeveloped. These situations hinder the accumulation of technical know-how in the production field as well as management know-how. The lack of know-how has impeded the growth of SMEs and the expansion of new businesses. To overcome these obstacles, in line with the progress of measures for promoting SMEs of the governments of developing countries, formulation of SME development policies and human resources development to implement the policies are essential.
In a region like sub-Saharan Africa, where there is no industry, support for entrepreneurship through regional community development represented by the Campaign of One Village One Product or the Road Station, which are more like micro enterprises rather than SMEs, creates local jobs, promotes support for women entrepreneurs, and contributes to the correction of regional income disparities.
At the same time, promotion of industrial technology is an important task for developing countries in order to expand business opportunities and improve competition through technological innovation.
Many developing countries work on the promotion of various industrial technologies as a national responsibility and have established official test facilities and laboratories for basic technologies; however, securing and developing the human resources that will work at those institutions remains to be done.
In the more developed countries, cooperation for relatively high level technical research targeting national research institutes is increasing. Through such cooperation, we support building systems that can respond to local technical needs.
4. Fostering Supporting Industries
The presence of SMEs, which supply components and parts, called supporting industries, is vital to foster comprehensive industries such as automobile and electric appliance manufacturing. Since the increased technical power of SMEs is very important for developing countries, we provide active support in this area.
Such support is expected to develop supporting industries in developing countries, promote further overseas investment, and consolidate leading corporations, thus leading to sustainable economic growth. As a result, it is expected that overseas procurement of leading corporations will increase, indirectly promoting overseas business opportunities, and at the same time, helping supporting industries expand and employment opportunities in developing countries increase.