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Japan's troubled foreign aid
policy
By Purnendra Jain
ADELAIDE - The No 1 aid donor of the 1990s lost
its top position among the Organization for Economic
Cooperation and Development donor nations last year when
it slashed its aid budget by more than 10 percent. The
Japanese official development assistance (ODA) budget,
once considered a sacred cow receiving the largest
allocation in the world until 2000, has faced cuts since
fiscal 2001. Prospects of further reduction loom large,
as indicated by the initial budget proposals for fiscal
2003. It is not just the decline in its budget but a
range of other important concerns, including cases of
corrupt political practices and bureaucratic bungling
that have raised concerns with regards to Japan's ODA
policy and its future directions.
Criticism of
Japan's aid policy and its directions in the past
emanated from various quarters, including both the
national and international media. Japanese taxpayers
raised concerns over aid monies finding their way into
the personal bank accounts of Asian political leaders
such as Ferdinand Marcos of the Philippines.
Furthermore, the main beneficiaries of large
infrastructure projects such as roads and dams carried
out in recipient countries using Japanese aid money
benefited big Japanese companies rather than helping the
local economies. Critics also lamented that there was no
aid philosophy to underpin Japan's aid programs.
When in the early 1990s Japan established an ODA
charter defining Japanese aid philosophy, it soon became
obvious that the conditions of the charter were not
applied uniformly and consistently. In the eyes of many,
Japan acted soft on the issues of human rights and
nuclear tests in China, but India and Pakistan received
drastically different treatment when they detonated
their nuclear devices. And Japan acted tough on the
human-rights conditions in Myanmar. Thus despite the
massive amount of money that the government injected
into its aid budget, Japan did not receive the accolades
or international respect it expected.
But
emphasis on aid continued as Japan aspired to become a
"civilian power" shunning its past military aspirations.
Even with Japan in economic recession and its growing
fiscal deficit, the ODA budget remained untouched
throughout the 1990s and Japan maintained its No 1
position in the world of aid donors.
The rise of
Japan in the 1970s as a prominent economic player and
major global power led Harvard sociologist Ezra Vogel to
describe the nation as No 1 in many fields ranging from
its bureaucratic structure to the education system.
Japan's status in the world was enhanced greatly in the
1980s as its economic engine moved at great speed. But
the burst of the 1980s bubble economy in the following
decade brought to light the weaknesses of Japanese
political, social and economic institutions. The model
economic powerhouse of the 1980s turned into an economic
non-performer throughout the late 1990s, a situation
that continues in the first quarter of this decade. One
area where Japan remained No 1 was the quantity of its
aid in absolute dollar figures. But Japan jettisoned
even this status by reducing its budget, surprisingly at
a time when the United States and European nations have
allocated more funds to their foreign-aid budgets.
Although many ministries and agencies are
involved in administering Japan's overseas aid, the
Ministry of Foreign Affairs (MOFA) has been the key
player. However, revelations of scandals and unethical
practices in the Foreign Ministry have damaged its
reputation both domestically and internationally. This
year Prime Minister Junichiro Koizumi sacked his feisty
foreign minister Makiko Tanaka and then top Foreign
Ministry bureaucrat Yoshiji Nogami after revelations
that high-ranking and influential Liberal Democratic
Party (LDP) parliamentarian Muneo Suzuki had pressured
the Foreign Ministry to bar a nongovernmental
organization (NGO) from an international conference held
in Tokyo in January on the reconstruction of
Afghanistan. This episode was used as a guise to sack
Tanaka. But discontent within the ministry was growing
against Tanaka as she was discovering and exposing a
number of corrupt practices and wastage of taxpayers'
money within her ministry.
The Suzuki saga
unveiled Japan's continuation of the unholy alliance
among politicians, bureaucrats and business groups, the
famous "iron triangle". A number of cases have appeared
in the media indicating Suzuki's political influence on
ODA-funded projects and how he compelled MOFA officials
to favor construction companies from his own electoral
district. These companies in turn gave millions of yen
in political donations to fuel the electoral machinery
of Suzuki.
To reform the scandal-tainted
ministry, Foreign Minister Yoriko Kawaguchi recently
commissioned a private advisory body. Yoshihiko
Miyauchi, chairman of Orix Corp, heads the 13-member
advisory panel comprising business leaders, academics
and former MOFA officials. After having considered a
range of issues, including reform in the ODA program,
the panel presented its report to the minister last
week. In its earlier draft, the panel had recommended
that a new agency be established to oversee ODA
programs, currently conducted by various ministries and
agencies, with MOFA and the Ministry of Economy, Trade
and Industry (METI) as the two key players.
The
proposal naturally faced stiff opposition from MOFA and
its former officials who served as members of the panel,
as the proposed new agency would have taken away one of
the most prized diplomatic tools of the ministry. This
was not the first time a proposal to create a
specialized aid agency was made and rejected.
Change and reform do not come easily in Japan.
Bureaucrats resist and oppose change and defend their
ministries and protect their turf. Inter-ministerial
rivalry is common in Japan. For example, Foreign
Ministry officials have long been at "war" with other
ministries over which should lead those policy areas on
which both MOFA and a rival ministry have jurisdiction.
ODA is one such policy issue. Foreign Minister
Kawaguchi's attempt last week to bring Hajime Furuta,
director general of commerce and distribution policy at
METI, to the post of director of the Economic
Cooperation Bureau at MOFA met with strong resistance
from MOFA officials. So opposed were foreign-affairs
officials to METI that at one point some senior
officials even threatened to resign in the event that
the minister did not change her mind. In the end Koizumi
threw his weight behind his foreign minister and MOFA
officials ultimately buckled under pressure.
Some changes have appeared recently in Japan's
ODA policy and new directions are on the horizon. New
actors such as NGOs and local governments now
participate in Japan's aid delivery, although those who
differ from MOFA's line of thinking are not welcome. New
programs, especially related to environment protection
and human development have been put in place. But the
ministry wants to keep a firm grip on policy matters and
budget decisions. Ideas that are not compatible with
those of the ministry's or that threaten its grip on its
policy areas are opposed and rejected.
Kawaguchi
has expressed concern over moves to cut the ODA budget
again by about 10 percent. "A 10 percent cut every year
would mean Japan's ODA would be one-third that of the
United States in 2006," said the foreign minister, and
emphasized the importance of aid, for example, in the
reconstruction of Afghanistan. While no one would argue
with her comment that reform is needed and ODA must
serve Japan's national interests, she has yet to tell
the Japanese taxpayers and the international community
clearly what those reforms are and just what are Japan's
national interests.
Japan is still a long way
away from articulating its aid policy and purposes
clearly. The nation will command the international
respect it desires only when it sets its policy
directions clearly and implements them fairly and
transparently. But given the Foreign Ministry's
narrow-mindedness and lack of strong political will,
it's indeed a tall order for today's politically torn,
bureaucratically humiliated and economically recessed
Japan.
Purnendra Jain is a professor
in the Center for Asian Studies at Australia's Adelaide
University.
(©2002 Asia Times Online Co,
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