MINISTRY TUSSLE A DRAW

No big change in ’07 ODA spending

by Reiji Yoshida

The battle between the Foreign and Finance ministries over official development assistance outlays for fiscal 2007 ended in a draw Wednesday as the Finance Ministry proposed a 4 percent cut in ODA spending in a draft budget, while much of that reduction was made up for in a supplementary budget the government adopted the same day.

The Finance Ministry revealed its draft for fiscal 2007, including an ODA allocation of 729.3 billion yen, down 30.4 billion yen, or 4.0 percent from the initial budget for the current fiscal year.

The regular ODA budget to be finalized later this month will decline for the eighth straight year since fiscal 2000 if it is passed.

The size of ODA in the general account budget has shrunk by about 40 percent from its peak in 1997 as the government has struggled to reduce mounting debts.

At the 2005 Group of Eight summit in Gleneagles, Scotland, then Prime Minister Junichiro Koizumi pledged to boost ODA spending, particularly to Africa, by $10 billion over five years. But the government in July adopted a budget framework for the five years starting in fiscal 2007 that called for 2 percent to 4 percent cuts over that period.

Based on that goal, the Finance Ministry sought a 4 percent cut for fiscal 2007. The Foreign Ministry meanwhile called for a sharp increase in ODA to meet Koizumi’s G-8 pledge. The government squared this by adopting a 3.77 trillion yen supplementary budget for the current fiscal year, which included 86.2 billion yen for ODA.

Defense cutbacks

Kyodo News The government plans to cut defense spending in the next fiscal year for the fifth straight year, despite higher outlays for a missile defense system being developed together with the United States, the Finance Ministry’s budget draft showed Wednesday.

The Finance Ministry proposed an initial budget for fiscal 2007 starting next April 1 of 4.798 trillion yen, down 15.6 billion yen, or 0.3 percent, from the 4.814 trillion yen allocated in this year’s initial budget. The Defense Agency had sought a 1.5 percent rise to 4.863 trillion yen.

In the budget for fiscal 2007, the ministry proposed earmarking 182.6 billion yen to upgrade Japan’s missile defense capabilities, an increase of 42.7 billion yen, or 30.5 percent from this year, in response to heightened regional tensions following the test launch of ballistic missiles by North Korea in July.

An additional 7.6 billion yen was set aside for Patriot Advanced Capability-3 (PAC-3) missiles and 4.5 billion yen to upgrade EP-3 reconnaissance aircraft in a supplementary budget for fiscal 2006.

The ministry also proposed 81.1 billion yen to defend against small-scale military strikes and terrorism, an increase of 6.9 billion yen, or 9.2 percent, and 7.2 billion yen in new funds to help pay for the realignment of U.S. forces in Japan.

The costs of the realignment include 1.0 billion yen for an environmental impact study ahead of the planned relocation of the U.S. Marine Corps Air Station Futenma in Okinawa to Camp Schwab in Nago, also in Okinawa.

The spending also covers surveys in communities where U.S. bases are located, and spending aimed at persuading those communities to accept the realignment.

The Finance Ministry said the government can reduce the cost of buying eight F-2 fighter jets to 105.6 billion yen from 121.8 billion yen by purchasing them in one year rather than two.