DEVELOPMENT-JAPAN: East Asia Is Still Apple of Japan’s Eye

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Aug 17 1999 (IPS) - Japan’s overseas development programme over the next five years will continue to focus on East Asia to help ensure stability in the region, while keeping an eye on projects that will stimulate business for Japanese companies.

An eight-page draft of ‘The medium-term official development assistance policy,’ points out that Japan sees it as “extremely important for economic recovery and social stability to continue in East Asia”.

Tokyo’s official development assistance (ODA), the biggest in the world, will also put emphasis on national and diplomatic interests, according to the policy outline issued last week by the government to cover fiscal 1999 through 2003.

A Foreign Ministry official who presented the new report explained that this is the first time that Japan has spelled out an ODA policy based on seeking benefits for local firms.

Analysts contend the shift in policy reflects Japan’s economic recession that has forced the government to tighten its budget. They say the new measure is in reaction to pressure from businesses that are facing recession problems at home and see the overseas market as a means of expansion.

Against this backdrop, the policy outline promises to expand opportunities for Japanese companies to take part in ODA projects and better utilise non-governmental organizations (NGOs) in ways that expand the participation of Japanese nationals in ODA activities.

Keiji Omura, an expert at the Institute of Developing Economies, points out that the 30 billion U.S. dollar Miyazawa Plan extended by the government last October to aid an economic recovery in Southeast Asia, is also aimed at boosting Japan’s goal to internationalize the yen.

“The pledge was made with the desire towards a faster internationalization of the yen,” he explained.

NGOs in Tokyo express disappointment over the new policy explaining that the government has ignored important global trends in ODA planning as adopted at the June G-8 meeting in Cologne earlier this year.

During the conference, international donors decided to write off debt made to poor nations struggling to meet repayments. Japan, the biggest lender, was forced to compromise by pledging to waive some of the debts.

“The message during this important meeting was definitely to reduce yen loans which tend to weigh down the development of poor nations. But we don’t see this reflected in the Japan’s new ODA policy,” says Tokihara Okazaki of Friends of the Earth, Japan.

“This is obviously because of pressure from business consultants who see big profits in yen loans that support large infrastructure projects,” he adds.

The ‘Nikkei Weekly’, Japan’s leading financial daily, notes similar concerns. In an editorial on Monday, the newspaper writes the new aid policy dodges the need to reduce yen loans, saying only that appropriate and timely reviews will be made in response to changes in the situation.

In addition, critics are angry that the government has not clearly stated Japan’s goal of increasing untied loans in keeping with other international donors.

The ‘Yomuiri’, Japan’s most popular newspaper, insists that Japan’s ODA programme constitute a central pillar of the nation’s basic security policy.

Towards this purpose, the newspaper suggests that ODA policy clearly mark its proposals to reduce poverty through self-help efforts. It points out that the latest ODA draft states that it seeks post-crisis economic recovery and political stability in Southeast Asia and promises to outline measures to rectify regional gaps and environmental problems in China and poverty eradication, market transition and sustainable growth in Mongolia and Indochina.

On South Asia, the document stresses the need to clarify the nuclear policy of both India and Pakistan before considering extending ODA to the countries.

The Japanese government will likewise continue to earkmark ODA for global concerns such as the environment, overpopulation, AIDS, food, energy, drug-trafficking, natural disasters, post- conflict rehabilitation, and debt relief, the paper said.

As for ways to implement ODA more efficiently and transparently, the outline proposes a system under which private experts, NGOs and other third parties to assess ODA projects.

But as The Yomuiri pointed out in a recent editorial, the key to the success of Japan’s ODA programme is in the implementation.

It noted that in compiling the medium-term policy, the interests of 17 ministries and agencies concerned as well as other organizations often conflicted with one another, thereby prolonging the process.

Tokyo will compile later this year a country-by-country ODA programme for up to 40 beneficiaries.

“If the same thing happens during the formulation of plans for each country and in the accompanying budget allocations, the result may be far from the goal of having highly transparent and efficient aid,” the paper said.