Japan Bank for International Cooperation
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The Japan Bank for International Cooperation (国際協力銀行 Kokusai Kyōryoku Ginkou?), also known by its acronym, JBIC, is a Japanese governmental financial aid institution created in October 1, 1999, through the merging of the Export-Import Bank of Japan (JEXIM) and the Overseas Economic Cooperation Fund, Japan (OECF). [1]
The bank's capital is totally Japanese, and its budget and operations are regulated by Japanese laws, namely, the JBIC law. Its main office is located in Tokyo, but the bank can maintain subsidiary offices overseas. The main purpose of the institution is to promote economical cooperation between Japan and oversea countries, by providing resources to foreign investments and by fostering international commerce. It also has a major role in promoting Japanese exports and imports, and the country's activities overseas.
The bank's presence can be seen both in developed and developing countries. It tries to contribute to the stability of the international financial order and to the promotion of sustainable development. It follows a policy of not competing with ordinary financial institutions. The bank is one of the instruments of Japan's official development assistance (ODA), which contributes to the execution of the country's foreign policy.
As it aims at sustainable development, JBIC is concerned about social and environmental issues, [2] and requires Environmental Impact Assessment studies in order to provide funding to any project.
On Inauguration of New JBIC:
Following the passage of the Japan Finance Corporation* Law on May 18, 2007, during the 166th Ordinary Diet Session, the International Financial Operations (IFOs) of Japan Bank for International Cooperation (JBIC), National Life Finance Corporation (NLFC), Agriculture, Forestry and Fisheries Finance Corporation (AFC) and Japan Finance Corporation for Small and Medium Enterprise (JASME) will be merged on October 1, 2008, to become a new policy-based financing institution, tentatively called Japan Finance Corporation (JFC)*. (Note)
Overview of New JBIC: 1.Mission The new JBIC constitutes the international finance sector of Japan Finance Corporation (JFC)*, a policy-based financing institution. (Note 1)
The new JBIC will perform the following three functions in order to contribute to the sound development of the international economy, including Japan.(Note 2) (1) Promoting overseas development of natural resources which are strategically important; (2) Supporting efforts of Japanese industries to develop international business operations; and (3) Responding to financial disorder in the international economy.
Note 1: To maintain the international trust and confidence enjoyed by JBIC, the international finance sector of JFC* will continue to use the name of JBIC. Note 2: In addition to the above functions, the new JBIC will take over, on a separate account, financial operations for effective realignment of the US military forces stationed in Japan pursuant to the relevant special legislation.
2.Key Operational Principles
The new JBIC will conduct business operations based on the following principles: (1) Well-focused policy-based financing As a policy-based financing institution, the new JBIC shall conduct speedy and well-focused operations based on policy needs in response to economic and financial situations in Japan and abroad. (2) Complementing private-sector financial institutions To effectively perform the functions required for policy-based financing, the new JBIC shall take account of situations where private-sector financial institutions are placed in their international finance activities and supplement them. (3) Sufficient revenues to cover expenditures Pursuant to the Japan Finance Corporation* Law, the new JBIC shall make efforts to maintain the financial soundness of its international finance operations. (4) Maintaining and improving international trust and confidence In order to conduct adequate international finance operations and effective funding operations, the new JBIC shall maintain and improve the international trust and confidence enjoyed by JBIC. (5) Conducting business operations by drawing on its expertise and initiatives The new JBIC shall conduct operations by drawing on its own expertise and initiatives on international finance.
- tentative name in English
Of the two types of operations conducted by the current JBIC, JFC will take over IFOs in its international finance sector.However, to maintain international trust and confidence enjoyed by JBIC, the international finance sector of JFC will continue to use the name of JBIC as it conducts international finance operations.
[edit] Operation
JBIC has mainly two ways of performing its loans: International Financial Operations (IFO) and Overseas Economic Operations (ODA). These operations are independent of each other, and are clearly separated in the bank's financial statements.
The IFO operations include loans and equity participation in overseas projects of Japanese corporations, therefore contributing to Japanese activities overseas. These operations are aimed at both developed and developing countries. As of March 31, 2006, the IFO operations accounted for 985.5 billion yen. [3]
The ODA operations are aimed mainly at developing countries, specially the ones in Asia, which accounted for 51,8% of the bank's operations in 2004 fiscal year [4]. These operations provide long-term and low interest loans to important projects that develop social structure and infrastructure of developing countries. The JBIC's financial assistance represents 40 percent of Japan's official development assistance. As of March 31, 2006, the ODA operations accounted for 770 billion yen. [5]
As of March, 2005, the country which had access to the most loans was Indonesia, followed by China and the Philippines. Brazil was the most benefited from South American countries, holding the sixth place in the bank's investments. [6]
