Japan is the leader in volume among DAC donors, but it ranks 19th out of 21 bilateral Members in terms of ODA as a percentage of GNP. Compared to other Members, its aid programme has a higher proportion of loans, with preference towards Asia and lower middle-income countries, and a heavy emphasis on assistance for economic infrastructure as opposed to the social sectors. Japan is making major efforts to improve its aid programme through an administrative reform, piloting the new international development strategy, a country-focused approach, and a push towards increased quality, transparency, and efficiency. The DAC encourages these developments and recommends that Japan should: - strengthen staffing and decentralisation; - enhance NGO involvement; - mainstream cross-cutting issues such as poverty, gender, and governance; - design and evaluate projects with a view towards cost-efficiency, sustainability, technological appropriateness, and socio-economic impact; - and ensure policy dialogue with recipient countries.