DEVELOPMENT: Japan Reverses Move to Reduce Aid to U.N. Funds

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Feb 11 1998 (IPS) - Japan, one of the world’s largest donors of development aid, has reversed a proposal to slash its contributions to U.N. Funds and Programmes this year.

“This is tremendous news for us,” Nafis Sadik, Executive Director of the U.N. Population Fund (UNFPA) told IPS Tuesday .

Sadik said Japan is expected to continue to hold onto its number one slot as the largest single donor to UNFPA sustaining a 54.4 million dollar contribution in 1998. “We made a very strong case – and the Japanese are very happy with our work,” she added.

Japan also is expected to leave untouched its annual contribution of about 106 million dollars to the U.N. High Commissioner for Refugees (UNHCR), and about 30 million dollars to the U.N. Children’s Fund (UNICEF).

“I am grateful that Japan has succeeded in reversing what might have been a major reduction in their 1998 contribution,” says UNICEF Executive Director Carol Bellamy.

UNHCR spokeswoman Marie Okabe said: “We were relieved to hear the good news,” particularly after reports that Japan planned to cut about 36 percent of its contribution to UNHCR. Last year, the head of UNHCR Sadako Ogata of Japan had expressed disappointment over the proposed reductions.

“If Japan cuts down its contributions by so much, Japan’s attitude towards humanitarian issues may not only be questioned internationally but also lure other nations to cut their contributions,” she warned.

The only sour note was that while Japan sustained its aid levels to UNFPA, UNICEF and UNHCR, it has decided to cut funding to the U.N. Development Programme (UNDP). Japan’s contributions to UNDP, which rose 1994 through 1996, have been sliding since then.

Japan, the largest single contributor to UNDP, gave 100 million dollars in 1994, 105 million dollars in 1995 and 110 million dollars in 1996. In 1997, funding dropped to 99.2 million dollars. In 1998, Japan is expected to reduce this by another 10 percent.

As a result of the continuing economic recession and a gradual shift in foreign policy, the Japanese government decided last year to cut its overall official development assistance (ODA) by more than 10 percent for fiscal 1998, which begins in April.

The proposed cuts on U.N. agencies and humanitarian organisations alone were estimated at between 30 to 50 percent. But now Japan has reversed this decision and only UNDP will suffer reduced funding.

The UNHCR has an annual budget of about one billion dollars, UNICEF about 900 million dollars, UNFPA about 300 million dollars and UNDP about 950 million dollars.

As far as UNFPA is concerned, Sadik said that several other donors, including the Netherlands, Germany, Belgium, Luxembourg, Norway, and Sweden, had also decided either to maintain existing levels or increase their contributions to UNFPA this year.

The Netherlands has pledged to increase its annual contributions from 39.8 million dollars in 1997 to 40.5 million dollars in 1998, Germany from 24.2 million dollars to 24.4 million dollars, Belgium from 1.7 million dollars to 1.8 million dollars and Luxembourg from 280,000 dollars to 394,000 dollars. Sadik said even the United States had pledged to maintain its 25 million dollar annual contribution to UNFPA.

Asked why these countries did not to cut funds at a time of declining development assistance, Sadik said: “They know we have made the best use of our resources”, and added smiling, “But we still need much more.”

A UNFPA study released last year said that most donors were reneging on promises they made at the 1994 International Conference on Population and Development (ICPD) in Cairo. The ICPD put a price tag of 17 billion dollars on a 20-year Programme of Action designed to tackle global population issues and promote human-centred development.

The programme was to have provided basic reproductive health services, including family planning, prevention of sexually transmitted diseases, and population research and policy formulation.

Of the 17 billion dollars required by the year 2000 and 21.7 billion dollars in 2015, only 9.5 billion dollars was committed in 1995. Of this, 7.5 billion dollars was spent by developing nations while international assistance, mostly in the form of grants and loans, amounted to only about two billion dollars.

Bellamy told the UNICEF Executive Board last month that the “depressing decline of development assistance at a time when the need for it was never greater” is a reality “we must live with.”

She said, however, that eight donor governments – Finland, Iceland, Ireland, Italy, Luxembourg, the Netherlands, New Zealand, and Norway – increased their general resource allocations last year over 1996 levels, irrespective of exchange-rate fluctuations. Seven other governments – Austria, Belgium, Japan, Sweden, Switzerland, the UK and the United States – were able to maintain the same level of allocations as in 1996.

“I also know that a number of other donors – all of them facing tough constraints – are making valiant efforts to find ways to offset the effects of both currency-exchange losses and general resource reductions. With friends such as these, we cannot fail,” she added.

Meanwhile, the growing strength of the U.S. dollar in international currency markets is also having an impact on U.N. Funds and Programmes which receive virtually all of their resources in national currencies.

Since 1996, the Japanese yen has declined by about 20 percent compared to the U.S. dollar but most of the U.N. Funds and Programmes expect donors to make the necessary adjustments to take into account the strength of the dollar.