Japan's ODA: Coinciding with aid policy

It was more than ten years ago that Japan made a significant breakthrough in international politics with a meaningful participation in the UN sponsored peacekeeping operations in Cambodia. The following decade saw further expansion of Japan's peacekeeping initiatives, but nothing has so far been matched to that of Tokyo's role in Cambodia, still seen by many in Japan as the apex of peacemaking initiatives that enhanced Tokyo's prestige as a significant player in the field of international development assistance. The chief of UN mission in Cambodia at the beginning of 1990s was the Japanese Under Secretary General of the United Nations, Yasushi Akashi. Although he failed to match his earlier success at a later stage when he was assigned as the UN peace broker in former Yugoslavia, Akashi is still revered in Japan for his contribution in Cambodia and till these days he remains active both as a critic of Tokyo's development aid policy and as an unofficial adviser to Japan's policy making circles dealing with ODA.

Akashi has recently published a strongly opinionated article in Japan's influential daily Yomiuri Shimbun, where he suggested that in the post Cold War period of uncertainty the right role for Japan to play in world politics would be to bolster its involvement in international effort to consolidate peace and promote nation building in conflict-torn countries. In short, what Akashi is proposing is that, Japan should change its focus of attention from financing large-scale projects in developing recipient nations to peace-dividend ODA projects that would facilitate the settlement of a conflict in a country devastated by civil war and violence. As Japan is compelled to shrink country's generous ODA budget due of prolonged economic recession at home, many within country's policy-making bodies are attracted by Akashi's comment, which they feel would be the right way to preserve Japan's high stake in international politics despite the dwindling financial contribution. And for Akashi himself, his new role as Japan's official representative in charge of issues concerning Sri Lanka has already placed him in a right position to try to put his words into practice. He himself has also made it clear that as Japan's ODA in the future would most likely be used more and more as a dividend for peace so that people themselves could feel the concrete benefits of peace, Sri Lanka, in this regard, would be a highly interesting case in which this new, more forward-looking approach by Japan could be tried.

The publication of the article coincided with the adoption by the government of an 81,718.1 billion yen budget for fiscal 2003 starting from April. The budget was approved in a cabinet meeting and will be submitted to parliament early next year for its final approval. The budget is 0.7 per cent larger than the initial budget for the current fiscal year. It includes 47,592.2 billion yen in discretionary spending, up 0.1 per cent. But as the government would be required to increase new issues of government bonds to finance the spending, the nation will no doubt go deeper into debt.

Earlier the finance ministry in its budget plan proposed a 5.8 per cent cut in Japan's official development assistance to developing countries and the cabinet approved the request by slashing the amount from next year's ODA budget. The government's decision would mean the ODA budget for fiscal 2003 is to be cut by 5.8 per cent to stand at 857.8 billion yen. It will be the fourth straight year of declines in ODA, following a 10.3 per cent cut in the current budget.

Despite such drastic cut in ODA spending, concerned officials in the finance ministry think that the draft budget has secured a necessary scale of funds for Japan to fully and appropriately serve its international responsibilities. As part of securing funds to be able to respond to international circumstances, the draft budget for the first time sets aside 15 billion yen in grants toward ensuring human security such as dealing with post-conflict situations. The draft budget also maintained the same level of emergency grants as in the initial budget for 2002 to support refugees and reconstruction. In a breakdown of ODA spending, the finance ministry set aside 224.7 billion yen for bilateral grants, down 6 percent from the current fiscal year. Economic assistance, which falls under bilateral grants, is cut by 16.8 per cent to 173.6 billion yen. The ministry also allocated 322.8 billion yen for bilateral technical assistance, down 3.5 per cent.

Pressured by a weak economy Japan is no doubt trying to map out a strategy to make better use of its vital resources. Echoing the voice of Akashi, a finance ministry official told reporters recently that Japan was willing to use its clout to take higher profile in global affairs by offering help in troubled spots and the ODA budget for fiscal 2003 tried to make a balance between this new role and the conventional standing the country was so far taking in disbursement of aids to developing nations. The 15 billion yen grant for human security projects would be utilized to finance projects like de-mining, combating the drug trades and resolution of regional conflicts. A further 16 million yen grant was set up for water resources development and no reduction was made to a 22.2 billion yen grant for emergency issues, such as refugee support and reconstruction of war-torn areas.

The ODA budget for fiscal 2003 reflects the gradual shift in Japan's official standing concerning country's role in helping the developing world to achieve sustainable development. The new effort to focus aid on global trouble spots is in part an attempt by Japan to play a role in maintaining world security. Such security concerns led Tokyo to host a donor conference for Afghanistan in January 2002. Earlier in December Japan hosted a donors' meeting for Indonesia's strife-ridden Ache province as an inducement to peace pact to end decades of bloody conflicts. Japan also announced it would do the same for Sri Lanka in 2003, after sponsoring peace talks in Tokyo. The Sri Lanka donors' conference was announced after a breakthrough in talks between Tamil rebel leaders and the Sri Lankan government in Oslo.

Such new initiatives of Japan as a leading donor would also mean slowing down of Tokyo's initiative in areas that until recently enjoyed some form of priority. Conventional recipients of Japanese assistance like Bangladesh might as a result see a downward trend in aid flow from Tokyo. But as if to compensate for any such losses to countries desperately in need of funding from overseas, Japan has also for the first time decided to forgive part of its debt to a number of heavily indebted poor countries. It was announced earlier that Tokyo would forgive up to 900 billion yen in ODA loans to Bangladesh, Myanmar and Ghana from next March. Until now the preferred practice of Japan was to offer additional grants to help recipients pay back existing debt, rather than simply forgive the amount.