JAPAN-DEVELOPMENT: The Politics and Economics of Aid Cuts

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Oct 22 1997 (IPS) - For years, Japan’s foreign policy has been synonymous to development aid and it was unthinkable for Tokyo to cut its loans and grants to foreign governments and international agencies.

But last year, broad budgetary cuts resulted in a sharp drop in its official development assistance (ODA). While some say the lower aid levels were a natural offshoot of the continuing economic recession, others see it as signaling a shift in Japan’s foreign policy.

Conservative thinkers point out that Japan must reduce its dependence on ODA — a pillar of its foreign policy — and instead expand the other aspects of international relations to reflect its stature as a world power.

But whatever the reason for cutbacks in its overseas assistance, the traditional recipients of Japanese assistance are now feeling the pinch. These include the United Nations agencies, which say cuts in Japan’s ODA budget will force them to scale down their activities.

For UN development and humanitarian agencies, Tokyo earmarks around five percent of its ODA budget, which for 1997 totals 13 billion U.S. dollars. The projected cuts would translate to a cut of 30 to 50 percent for each UN agency.

“We are naturally very worried and we keep hoping that the threatened cuts will not be carried out,” said Manzoor Ahmed, head of the UNICEF Tokyo office.

“Surely the Japanese government can see that the reductions it plans to make will not affect their massive ODA budget very much but will be big enough for us, making it very difficult to carry on,” he said.

Under pressure from the finance ministry, a bitter critic of its ODA policy, the Tokyo government is expected to slash official aid by seven to 10 percent in fiscal year 1998 that starts in April.

“The threatened cuts are a huge problem for us. We agree with UNICEF, but we are helpless,” said Mitsuko Ito of the foreign ministry.

Japan’s contributions to UNICEF, including emergency assistance, totalled 37.8 million dollars in 1996, behind top donors the United States and Sweden.

The proposed reduction comes to 12 to 13 million dollars, says Ahmed, adding that UNICEF’s programmes will naturally suffer as a result of diminished resources.

Threatened by the cuts are the immunisation of hundreds of thousands of children against six major childhood diseases, and the protection and treatment of millions of children afflicted with malaria and diarrhea.

The access by hundreds of thousands of children to primary education may also be affected by the cuts, UNICEF says.

Japan has also been harshly criticised by the Japanese head of the United Nations High Commissioner for Refugees, Sadako Ogata, who plays the role of one of the nation’s most prominent ambassadors.

In a letter addressed to prime minister Ryutaro Hashimoto in July, she expressed disappointment over Tokyo’s lower aid budget. “If Japan cuts down its contributions by so much, Japan’s attitude toward humanitarian issues may not only be questioned internationally but may also lure other nations to cut their contributions,” she said.

If cuts are to be implemented, Japan will fall behind the United States among aid donors.

Sadekazu Tanigaki, head of Japan’s liaison with UNICEF and director of the Science and Technology Agency, said Japanese supporters are fighting hard to prevent major cuts to the UN agency.

He explained that some cuts will be inevitable considering Japan’s austerity programme as a result of the continuing economic slack. “But the proposed 40 percent is too harsh and we are doing everything we can to force the finance ministry to come up with something lighter,” he said.

The final decision will be made in December, when the Japanese Diet meets to vote on the national budget.

“There is still a little more time to make the finance ministry officials see the importance of maintaining Japan’s image as a nation devoted to the eradication of poverty in the world through its assistance to important organizations like UNICEF,” he said.

Japanese ODA focuses mainly on infrastructure development in developing countries with the aim of expanding facilities for economic growth.

Bilateral loans comprise around half of the budget with humanitarian assistance toward projects such as gender, health and education receiving only around five percent of the pie.

Because contributions to UN agencies are voluntary, these organizations in a vulnerable situation and get hit hard when reductions carried out.

But with UNICEF enjoying enormous popularity among the public — private contributions amounted to 40 million dollars last year — Ahmed is keeping his fingers crossed on the final verdict.

“UNICEF is popular and is also recognised for its activities in Japan. It has a special appeal here which is all the more reason for the Japanese government to rethink its policy,” he explained.