Japan’s plan to cut back on official development assistance will worsen the nation’s economic prospects by shrinking the volume of trade it enjoys with the rest of the world, a high-ranking official of the United Nations Development Program said.
Hafiz Pasha, U.N. assistant secretary general and assistant administrator of the UNDP, said that a planned 10 percent reduction in ODA funding for fiscal 2002, part of budget outlines announced in early August, is not the answer to Japan’s economic woes.
“My own feeling is that a cutback in ODA at this time will worsen the prospects of the world as a whole, particularly developing countries, and will lead to a deeper recession elsewhere,” Pasha told The Japan Times in a recent interview.
“Given the fact that Japan is one of the world’s biggest exporters, it’s not clear how this (reduction in ODA) necessarily contributes to curing the recession.”
Pasha was visiting Japan earlier this week to attend a high-level meeting on sustainable development sponsored by the United Nations University in Shibuya Ward, Tokyo.
His comments came as Japan, the world’s largest ODA donor for 10 years running, reviews its ODA spending in line with ongoing fiscal reform discussions led by Prime Minister Junichiro Koizumi.
Japanese ODA, which totaled 1.02 trillion yen in fiscal 2001, is extended in the form of official loans, technical assistance and grants-in-aid to developing countries, as well as contributions to international organizations, including the UNDP, UNICEF and the U.N. High Commissioner for Refugees.
The government announced in August that it will slash ODA by 10 percent in fiscal 2002. The UNDP and other recipients will probably feel the pinch when the cuts are introduced in the next business year, although the size of the reduction for each recipient is yet to be decided.
Last year, Japan contributed $139.6 million to the UNDP, according to the international organization.
Pasha emphasized the need for Japan to keep supporting the UNDP, saying that allocating aid to international institutions allows Japan to provide development assistance to areas that it would not otherwise be able to.
Pasha cited the case of East Timor, which had its first democratic election in late August to pick a fledgling parliament.
The Japanese government, which has not had a presence in East Timor, put up $1.2 million for UNDP projects to support the independent electoral commission, Pasha said. The money was used for such purposes as citizen awareness campaigns, voter education and training of polling officers, he added.
As a result of the support from Japan, which provided the largest single contribution, as well as other countries such as the U.K. and Portugal, the elections proved a huge success, Pasha said.
“The end result was peaceful elections, not one incident, and a 90 percent turnout. It could not have been better.”