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Japanese
aid brings dividends, division
By James Borton
With the Tokyo stock market at 20-year lows, unemployment increasing and urban
land prices crashing to one-third of what they were a decade ago, many Japanese
citizens are up in arms about wasteful public spending and the siphoning of
precious funds into more overseas development assistance (ODA) for Southeast
Asia.
No one disputes that over the past 45 years, Japan has transformed itself from
a country whose famous bullet trains were partly financed with foreign aid into
one of the world's foremost providers of aid to developing countries. But with
Japan's leading newspapers now denouncing ODA efforts as "simple-minded
diplomacy", and with the country's financial recovery still elusive, it may be
its poor Asian neighbors that end up suffering the most from the widening
erosion of confidence for grant aid.
In total, an estimated US$14 billion of ODA has already been spent in the
Greater Mekong Subregion (GMS) on some of the world's most ambitious
infrastructure projects - roads, bridges, railways, waterway projects and air
transport routes linking China's Yunnan province, Thailand, Laos, Myanmar,
Cambodia and Vietnam.
The GMS comprises more than 250 million inhabitants, yet it is still an
untapped region of Asia. The most pervasive social problem in the GMS countries
remains helping those hardscrabble lives of deeply entrenched poverty,
especially among the rural population and ethnic minorities. Although rapid and
sustainable economic advances have been made over the past decade, Cambodia,
Laos and Vietnam remain low-income countries with a per capita gross domestic
product (GDP) of about $350.
For the past two decades, GMS developments have occupied the minds of
government leaders, planners, donor countries and investors from around the
world. With the direct assistance of the Asian Development Bank (ADB), the GMS
Economic Cooperation Program was established in 1992. It was the onset of peace
in the region in the 1990s that induced subsequent flowering of this program.
The GMS program has created a framework for economic cooperation among the six
countries to take advantage of their geographic location, ample resources, and
common desire to achieve economic development.
But many non-governmental organizations (NGOs) and observers do not believe
that either ADB-supported programs or bilateral Japan-driven ODA has
transformed villagers' dreams into reality.
"As a direct result of aid-supported programs, many people in the region have
been displaced from their families and homes and lost their livelihoods,"
claimed Mak Sithirith, coordinator of the Fisheries Action Coalition Team
(FACT), a Cambodian NGO.
It is no coincidence that this month there were scheduled in
Washington, DC, and Bangkok two GMS conferences largely to extol and explain
the impact of ODA. Foreign Policy magazine in cooperation with ADB co-hosts a
program called "Economic Cooperation and Opportunities in the GMS" focusing on
infrastructure and the development of the private sector next Thursday at the
Carnegie Endowment for International Peace. And last week, Nation Media
convened a two-day program on "Business Opportunities in the Mekong
Region".
These two programs come on the footsteps of a bullish projection that the GMS
is expected to post annual growth of 6 percent through the rest of the decade,
with the combined economies of the six members approaching $400 billion by
2010, according to Peter Brimble, president of Brooker Policy Research in
Bangkok.
Japan has been the top donor to the ADB responsible for the promotion of GMS
economic cooperation since 1992. Japan is also recognized as the second-largest
shareholder in the World Bank. Along with the ADB and WB, Japan plays a crucial
role in the development of the Mekong through its generous ODA.
One of the many priority projects for cooperation is the development of a trunk
road from Ho Chi Minh City to Bangkok via Phnom Penh, which is also identified
as a principal route in the "Asian Highway" network. Japan has been promoting
this road as the "Second East-West Corridor" in collaboration with ADB.
The once-war-torn countries of Laos, Cambodia and Vietnam have arguably
benefited from billions of aid dollars in bilateral support from Japan's ODA
reflected also in technical assistance from the Japan International Cooperation
Agency (JICA).
"Japan has a long-term interest in Southeast Asia and its support and
commitment to rebuilding the region really commenced after World War II," said
Takao Toda, senior representative of JICA in Washington.
Decades before the 1991 Paris Peace Accords signaled the end of the Cold War
alliances and alignments in Asia, Japanese assistance was evident in Southeast
Asia. A widely held perception was that Tokyo policymakers believed that a
refocusing on Asia might help Japan regain its own cultural balance and
establish a diplomatic moral imperative.
The Paris peace process did foster a new role for Japan in the region. Tokyo
shifted away from its previous Cold War commercial export-driven approach to
foreign assistance to a geopolitical diplomatic policy advancing
democratization and conflict resolution. The change was all the more dramatic
since it occurred in Asia, namely in those countries where the Japanese
Imperial Army had been an occupying power in World War II.
"Japan certainly assumes a dynamic and historic role in the rebuilding of this
region. We are not only engaged in the much-needed infrastructure development,
but also find ourselves more actively engaged in the simmering regional
politics as evidence by my own behind-the-scenes efforts earlier in the year to
quell the anti-Thai riots in Phnom Penh," said Gotaro Ogawa, Japan's ambassador
to Cambodia.
Japan has provided massive loans and technical assistance in mapping out its
contribution to Southeast Asia's industrial and economic development. For
example, in the midst of the Asian crisis in 1998, the total Japanese aid for
the region approached nearly $2.5 billion - higher by about $1 billion than the
aid flow to South Asia during the same time period.
Back in Tokyo, senior government officials and policy pundits are deeply
pondering some of these questions: Are ODA schemes and formulas diverse enough?
Is Japanese aid really promoting self-help efforts in these developing
Southeast Asia countries? Does aid always emphasize technology transfer in
technical cooperation?
JICA is responsible for the technical cooperation aspect of Japan's ODA
programs. JICA's primary objective is the transfer of technology and knowledge
that can serve the socioeconomic development of the developing countries.
JICA was established in 1974 as a "special public institution" of the
government, and will be transformed into an "independent administrative
institution" this autumn as a result of Japan's major administrative reform
plan. With more than 1,200 staff members working both in Japan and at its more
than 50 overseas offices, this represents for the demoralized government's
budget a significant financial burden and bureaucracy that the public demands
to see scaled back.
(Copyright 2003 Asia Times Online Co, Ltd. All rights reserved. Please contact
content@atimes.com for information on our
sales and syndication policies.)
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