Asia Times: Time to change tack on international aid



	January 5, 2000	atimes.com

Japan

Time to change tack on international aid
By Suvendrini Kakuchi

TOKYO - Dogged by domestic economic constraints, Japan's overseas aid budget - the world's largest - is facing a cut in fiscal 2000 that has prompted calls for a more people-friendly aid policy.

The cutback comes after the Japanese cabinet approved last month 1.04 trillion yen (US$10 billion) in funds for overseas assistance for fiscal 2000, which begins in April next year. The amount represents a decline of 0.2 percent from 1999.

Despite the slight drop, the first in two years, the government says it has injected ample funds to help Asian nations tackle poverty and improve their hard-hit economies since the financial crisis struck in 1997. Another priority in Japan's aid program will be environment and social development spending, for which Tokyo has extended an additional 3 billion yen in grants.

''Official development assistance [ODA] used to win strong backing from ruling party politicians who were eager to convey to the world Japan's commitment to international cooperation,'' one foreign ministry official recalled. ''But that's history. Overseas aid at a time of tight fiscal conditions at home has become unpopular. Humanitarian aid is relatively easier to win support for than conventional infrastructure projects.''

A foreign ministry official said the budget plan ''enables Japan, as host of next year's summit meeting [of the Group of Eight nations] to send a positive message to Asian countries recuperating from the economic crisis''. He explained that recent changes in Japan's ODA structure and policy were aimed at ''prioritizing allocations on tangible aid, global problems led by poverty measures and social development mainly in Asia, strengthening the ODA framework, promoting information disclosure, and improving the assessment system''.

Addressing concerns about the implications of a decline in Japanese aid, the official pointed out that in dollar terms Japan would actually be increasing its foreign aid budget by some 14 percent, because it was calculated at 120 yen to the dollar when drawn up in the fall. The dollar has fallen rapidly since then.

Foreign aid analysts point out that despite the fall, Japan's overseas budget remains a landmark in the nation's foreign policy. ''The ODA budget continues to be at the center of Japan's diplomacy which relies on aid, as Japan still play s a minimal role in military activities. The cut is not a major concern and can be taken as an indication of important changes in the ODA toward the better,'' explained Fumio Kaneko of Yokohama University, an expert on Japanese aid.

As for the future, Kaneko sees Japan spending more on environmental projects, especially in Asia. ''Asian economies are now back on track after the economic crisis. Japan will still focus its ODA in Asia, but put more money into protecting the environment and other social issues,'' he said. The government has pledged 1.8 billion yen for a new form of grant-in-aid to promote clean energy, increased environment and social outlays to 12 billion yen, and expanded reforestation grants to 2.4 billion yen.

Japan is the world's top donor, but its overseas assistance stands at just 0.28 percent of its gross national product, or way below the aid target by the Organization of Economic Cooperation and Development (OECD) countries of 0.7 percent of GNP.

In August, the government outlined new guidelines covering its ODA program between 1999 and 2003. The guidelines place emphasis on aid to Asian countries to help them implement structural reforms aimed at solving their economic problems. Experts say China and Indonesia will continue to be the top recipients of Japanese aid, as they have been for many years.

The government has also allocated contributions of 10 billion yen each to the World Bank and the Asian Development Bank for ''social development and poverty measures mainly in Asia''.

Still, critics in Japan have long called for the country, which has encouraged Asian countries to follow the Japanese model of economic development, to pay closer attention to the needs of poorer sectors. Indonesia's political turmoil, which forced Suharto to resign the presidency in May 1998, was seen as an important lesson for Japan, which had nurtured close relations with the unpopular leader.

''In the new millennium, we need the government to not work too closely with ODA recipient governments, but also increase aid to local community and grassroots movements in order to improve the efficiency of Japanese ODA,'' said Kiyoko Furusawa, who teaches development and human rights at Keisen University.

Aware of the criticism of its aid policy, the government, while decreasing general grants by 1.7 percent to 112.3 billion yen , has approved double-digit growth in funds for child welfare, removing anti-personnel landmines and reforestation. Child welfare funds have been raised to 6 billion yen and spending on mine clearing to 2.7 billion yen.

Also, 355.3 billion yen has been allocated for bilateral technical assistance, up by 0.3 percent and including the dispatch of senior volunteers, development of human resources and student assistance.

The budget plan also calls a new system for disclosing information, another pressing request from grassroots organizations lobbying for more meaningful aid programs. The current assessment system is limited to results of ODA projects, but activists both in Japan and aid-receiving countries have long batted for Tokyo to address debt relief, a pressing concern for developing countries.

Kaneko explains that it is difficult for Japan, which uses the nation's enormous postal savings to provide ODA loans, to approve a secure plan for debt relief. ''But Japan will soften its stance in the future on the issue in order to cooperate with growing international support for some kind of debt relief,'' he predicted.

(Inter Press Service)

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