The government and the ruling coalition are considering a reduction of roughly 3 percent in Japan's official development assistance to developing countries for fiscal 2001, sources involved in ODA revision talks said Tuesday.
For fiscal 2000, which ends next March 31, the government has earmarked around 1.05 trillion yen for ODA in its initial budget.
If the 3 percent reduction is approved, spending on foreign aid would shrink by about 31.4 billion yen.
The government may consider reducing its spending on the Japan Bank for International Cooperation, a governmental body that manages ODA spending and international financial operations, Finance Minister Kiichi Miyazawa told a news conference Tuesday.
A coalition task force -- made up of representatives of the Liberal Democratic Party, New Komeito and the New Conservative Party -- set up to review ODA in light of Japan's critical fiscal situation, has been working on cutting the ODA budget at the same time as making it more effective.
Some government and ruling party officials have said Japan should prioritize domestic expenditures, rather than foreign aid.
Opposition has mounted within the government, however, against a possible sharp reduction in ODA -- such as a 30 percent cutback proposed by top LDP policy planner Shizuka Kamei -- as it would have a severe impact on recipient countries.
Asian countries that depend on Japan as their top ODA donor have expressed concern over possible reductions.