NEW YORK – Japan has no plans to cut its aid to Botswana despite Moody’s Investors Service Inc.’s move to lower its sovereign rating on Japan to below that on Botswana, a top Japanese financial diplomat said in an interview to be published Monday.
“We have nothing against Botswana,” Haruhiko Kuroda, vice finance minister for international affairs, said in the latest edition of Newsweek magazine due to hit newsstands Monday. “And we don’t have any intention to reduce our foreign aid to them because ratings agencies were unreasonable enough to reduce Japan’s sovereign-debt rating to below Botswana’s.”
Kuroda made the comments following a decision late last month by the U.S. credit rating agency to cut its sovereign rating on Japan by a rare two notches to A2, below not only Japan’s Group of Seven partners but also under Botswana and Estonia and on par with Cyprus, Latvia and Poland.
Moody’s cited the Japanese government’s massive debt as the prime reason behind the rating cut. The debt is more than 130 percent of the nation’s gross domestic product, the worst in the industrial world.
“The debt-to-GDP ratio is very high, that is true. And our budget deficit is 6 percent of GDP, which is large,” Kuroda said. “If you look at our debt-service payments, you will find that our expenditures are not so big as the debt-to-GDP ratio suggests. They are comparable to the level in Italy.”
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