By Suvendrini Kakuchi
TOKYO, Nov 24 2003 (IPS)

Cuts and a heavy focus on Iraq’s reconstruction in Japan’s aid budget – the country’s most important diplomatic tool – is a clear signal of a strategy that puts national interests over poverty eradication, say analysts here.

Japan plans to reduce it official development assistance budget for fiscal year 2004, which starts in April, by 5.8 percent from the previous year, according to the foreign ministry.

This would be fifth year reflecting a consecutive decline in overseas assistance. Japan’s aid budget was almost 9 billion U.S. dollars in the last fiscal year.

“The economic recession and growing criticism over Japanese aid has forced changes,” a foreign ministry official, who declined to be named, told IPS. ”The only way to win approval for international assistance from the local taxpayer is by developing strategies that show the benefits to the country.”

Benefits to the country right now include security and support for the U.S. ‘war on terrorism’, judging from a new draft released in August where the foreign ministry identified peace and security as the top priorities of Japan’s aid spending.

A key component of the upcoming aid budget is a hefty grant programme for war-torn Iraq – 1.5 billion U.S. dollars for 2004 – pledged by the Japanese government in Madrid in October.

The package represents by far the biggest offer from international donors – the European Union pledged 260 million dollars – a step that critics here say indicate pressure on Japan to support its closest ally, the United States.

This focus on security and affiliation with controversial U.S. foreign policy also means lesser attention on more development-oriented aid, which would have been more in keeping with changes in aid policy before the Sep. 11 attacks.

“I really don’t see the need to give Iraq so much, given the fact that there is not a clear needs assessment made for the country that is still struggling with war,” said Kiyotaka Takahashi, development assistance research and policy analyst at the Japan International Volunteer Centre, a leading non-governmental organisation.

”The move shows the pressure on Tokyo to support Washington,” Takahashi explained.

Observers also point to another major development in fiscal 2004 – the announcement that ODA loans to China would be slashed by 20 percent, on the basis of that country’s high growth rates the past 10 years.

Japan has been reducing loans to China that are targeted to developing infrastructure. Loans comprised 12 billion dollars in 2003. The rivalry between the two Asian giants also plays a role in Tokyo’s policy. Last month, some politicians issued calls to trim Japanese aid to China, after Beijing successfully completed its first unmanned space mission, sending a man to space after the United States and the former Soviet Union.

But development experts say that in truth, China remains very much a developing country.

“While China’s development is impressive, it still faces problems with poverty and wide gaps between the rich and the poor, which makes it still a candidate for aid. In addition, the decision (by Tokyo) is a sign of government being forced to squeeze aid to other recipients to meet its pledge to Iraq,” said Hiroyuki Ohtaka, who teaches international relations at Keisei University.

Grants to Iraq comprise roughly 80 percent of Japan’s grant budget for next year. This is bad news for other developing countries dependent on Japanese aid.

”I am not happy with the latest budget. Clear targets to reduce poverty, rather than focus on security, would have protected ODA from becoming a political message, as what it is becoming,” pointed out Takahashi.

In a bid to curb criticism, the foreign ministry has promised that it would not change aid pledges already made to needy countries next year.

”Pledges already made will be followed through,” said the foreign ministry official. He also stressed the Asian region, which has traditionally received 60 percent of Japanese aid, will continue to receive the bulk of its development aid.

In hopes of becoming more of a role model for ODA, Tokyo pledged in June to provide 1 billion dollars in aid for Sri Lanka to help promote peace talks between the government and Tamil Tiger rebels and end the two-decade ethnic conflict in that island nation.

Despite assurances from officials, activists are worried that Tokyo would evade pressure to instill clear guidelines in ODA disbursement in 2004.

A major point of contention with activists is the ”double standards” that critics say Japanese aid guidelines contain.

For instance, they say, Japan decided to freeze ODA projects for Burma in June after pro-democracy leader Aung San Suu Kyi was arrested and held in detention. But Tokyo continues to provide aid to Indonesia, Japan’s top recipient of aid, even though it launched military operations against rebels in Aceh province in May.

Activists also find the rise of security issues onto development priorities as going against other recent positive reforms in the area of aid.

Among these is the conversion of the Japan International Cooperation Agency (JICA), the technical cooperation arm of Japanese aid, into an independent organisation. Earlier in April too, it released a set of guidelines that pledged environmental and social priorities in overseas projects.

JICA, now headed by Japan’s most famous international diplomat, Sadako Ogata, will launch a new practice in fiscal 204 aimed at minimising the possible adverse effects of projects such as the construction of airports and dams on communities and the environment.

In contrast to the foreign ministry’s policy, JICA has outlined clearer assessment guidelines for aid projects, and called for re-examination by panels of outside experts when projects have questionable effects on the environment.

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