TICAD to redefine Japan aid to Africa

Decades-long economic slump means Tokyo has to change tack

by Jun Hongo

Staff Writer

When the first Tokyo International Conference on African Development was held 20 years ago, circumstances in Japan and Africa were vastly different than they are today.

Japan, despite the implosion of the bubble economy by 1993, was still the second-largest economy and the biggest supplier of official development assistance in the world, while many African regions were struggling to alleviate staggering poverty and seeking vast amounts of foreign aid.

Fast-forward to the fifth TICAD summit that kicks off June 1 in Yokohama, and it is clear both sides have undergone drastic transformations.

“Africa has demonstrated strong economic growth since around 2000, especially the sub-Saharan region,” said Kenichi Shishido, a senior adviser in the Africa Department of the Japan International Cooperation Agency.

The combined sub-Saharan economy expanded by more than 6 percent between 2004 and 2007, and more than 5 percent every year since 2010, according to the International Monetary Fund.

As the cost of natural resources spikes and private capital flows continue to support the continent’s rapid growth, some predict that Africa’s population will grow to 2.1 billion by 2050 from 635 million in 1990. People aged between 15 and 64 are forecast to reach 1.4 billion, exceeding even China’s total workforce.

Africa could prosper even faster by exploiting its rich reserves of oil, natural gas and rare earth metals.

Although 1960 is considered the Year of Africa because more than a dozen countries won independence from Western colonial powers that year, Shishido feels the continent is “truly becoming independent 50 years since then” due to its as yet untapped potential.

Japan, meanwhile, has continued to endure a decades-long economic slump that has forced it to cut its ODA budget. Although the government has achieved the pledges it made in the previous four TICAD meetings, including doubling development aid to Africa, laying out the foundation for a new relationship with the continent will be key in next month’s three-day summit.

” ‘Hand in Hand With a More Dynamic Africa’ is the event’s slogan,” a Foreign Ministry official said last month.

Whereas the first four TICAD meetings, all hosted by Japan, focused on assisting development, reducing debt and expanding ODA, the theme of this session will be how to strengthen economic partnership with Africa while respecting its ownership rights.

While Eastern Asia and the United States remain central to Tokyo’s diplomacy, pundits agree that Africa’s importance will continue to grow.

“We see Africa as an investment partner, and we intend to work together for its development,” the official explained.

The fifth TICAD will focus on ways to boost private capital flows to the continent, assist in the modernization and efficiency of local agriculture, and the provision of manpower and technological training on the ground, according to the official.

Japan, along with many other major economies as well as developing countries, has already launched a series of such projects. Its economic power may have diminished, but the government believes Japan has the advantage in providing distinctive and indispensable aid to Africa.

One key example involves Mozambique, located in the southeastern corner of the continent. While the country’s grain production doubled in the past decade, it still suffers from a lack of strategic farming and depends on imports to feed its people.

And yet the impoverished nation has a lot of agricultural potential, according to a 2009 World Bank report.

Japan is working with Brazil in Mozambique to help farmers grow soybeans and other crops under a joint program named ProSavana. The project is based on decades of Japanese and Brazilian technological innovation, including a method that has helped turn the South American nation into a leading soybean exporter.

Japan’s aim is to offer “an inclusive development,” JICA’s Kota Sakaguchi said, explaining that Japan is not only providing agricultural assistance but building infrastructure that will facilitate the transportation of crops and other resources across Mozambique.

China’s aid to Africa is quick and the amounts of money being pumped in by Beijing are extremely large, the Foreign Ministry official acknowledged. But assistance that is attentive to detail is lacking under this approach, including creating jobs for local residents and correctly instructing them on the technologies and techniques China is exporting.

“On the other hand, assistance to Africa by the Japanese government is mindful of providing more jobs for locals and of returning the projects’ profits to the country. Its fair to say that African nations think highly of our style,” the official said.

Many have praised the ProSavana project, including Microsoft founder and philanthropist Bill Gates, who in a recent article published in a Japanese magazine called it “one of the most successful cases” of assisting Africa’s agriculture.

But JICA recognizes that it still needs to build on its relationship with Africa.

In February, farmers from Mozambique visited Japan and held news conferences to express concern over Tokyo’s assistance to the region. Some claimed that they feared losing their source of income once their land is used for massive production projects to generate global exports.

“There is some misunderstanding that needs to be resolved,” Sakaguchi said, explaining that projects like ProSavana will proceed with the utmost care for local farmers.

Along with African delegations and representatives of international organizations, including the United Nations and the World Bank, nongovernmental groups are also expected to join TICAD and events on its sidelines. The summit will provide an opportunity to clarify to such organizations the details of Japan’s aid.

“It is understandable that there are many opinions” from locals and NGOs on how Africa’s development should proceed, Sakaguchi said. “We will continue to promote close communication with all parties involved.”

Poverty, though it has diminished substantially over the years, remains another important subject to be discussed at TICAD.

“It is often said that when the economy in Asia grows by 1 percent, the poverty rate in the region drops also by 1 percent. But the decline of the poverty rate in Africa is not as sharp,” Shishido, the senior JICA adviser, said, adding that more than 386 million people were still living in extreme poverty, on less than $1.25 per day, in Africa as of 2008.

“There is a structural problem, and creating a better system for social welfare and properly distributing the countries’ income is necessary,” Shishido said.

Addressing the safety concerns that remain in Africa will also figure prominently at the summit, especially as the continent seeks to lure greater foreign capital inflows. In January, Islamic militants attacked a natural gas processing plant in Algeria and killed foreign workers, including 10 Japanese. The case raised concern among Japanese firms doing business on the continent.

The incident “reaffirmed the complex background and difficulties in coping with Africa’s political and safety risks,” a report issued in April by the Japan External Trade Organization said.

Relying too much on natural resources as a means to develop Africa’s economy is said to trigger antiforeign sentiments by some locals, the JETRO report said.

Pundits have also pointed out that crime in Africa, including piracy off Somalia’s coast, stem from the massive gap between the haves and have-nots.

The fifth TICAD meeting should not only present an opportunity to discuss sustainable and stable economic development but also must focus on “quality of growth,” the JETRO report noted.