Editorial
Free aid, not loans, the key to effective foreign assistance
The reorganization of the Ministry of Foreign Affairs' International Cooperation Bureau, the government branch in charge of official development assistance (ODA), has resulted in the previously separate sections handling international yen loans, grant aid, and technical cooperation being divided up by geographical region.
Following the move, officials aim to examine whether each country needs yen loans, free aid or technical cooperation, and examine what combination of assistance is appropriate.
With the exception of some free assistance, implementation of ODA was aligned with the activities of the Japan International Cooperation Agency (JICA), together with the yen loan division of the Japan Bank for International Cooperation (JBIC), in October last year. In line with the change, the bureau will consider aid on a country-by-country basis, whether it be in the form of loans, free assistance or technology. The move streamlines the operations of the Foreign Ministry, which handles ODA planning, and JICA, which carries out the plans.
Japan is now approaching an important phase in its ODA activities. In addition to pledges that past Japanese prime ministers have made to assist Africa, Japan must increase the amount of its assistance to other Asian countries. It has declared that it will provide both financial and technological cooperation in environmental measures, represented by measures to combat global warming.
However, as reforms align income and expenditure, the budget for aid has continued to decrease. On a global scale, Japan has fallen from its position as the world's top provider of ODA to fifth place. And in terms of the ratio of ODA to gross national income, it sits at the bottom of the list of developed countries, alongside the United States.
There is no doubt that up until now, Japan had considered the provision of foreign aid to be an important method of diplomacy. But in terms of the general account, cuts in aid have continued, and the situation has gradually become worse. By increasing the amount of its yen loans, the government hopes to secure projects and carry out its international pledges, but this has limited effect. Most poverty reduction is the result of free aid.
Determining what assistance is required in countries covered by JICA and the Ministry of Foreign Affairs, promptly carrying out investigations, deciding on and providing assistance, and implementing reforms that make an impression on recipients of Japan's ODA are essential. But that alone does not enable Japan's aid to function as soft power.
Firstly, if the government is not able to provide funding, then its assistance plan will be a pie in the sky. Neither the ruling nor opposition parties have clarified their stance in this respect. The budget for ODA should be increased. Saying that, however, budget constraints are tight. In addressing the issues, Japan should back a combination of private funds and funds from JBIC.
Secondly, while strategic aid as a diplomatic means is unavoidable to some extent, Japan must not forget that the foundation of ODA is in measures to help countries emerge from poverty and underdevelopment.
When facing a situation of recession, it is easy for political measures to turn inwards. But it is exactly at this time when development of ODA strategies is necessary.
(Mainichi Japan) August 10, 2009