In a change of position, the Japanese government last week announced that it would forgive 100 percent of the debt owed to it by the world’s poorest countries. The news is welcome: The countries involved are in desperate straits. But reports that accepting the offer would mean forfeiting future assistance is a cruel Catch-22. The government should determine what its goals are: genuine aid for the poor or good public relations.
Last year, Japan said that it would forgive 100 percent of the Official Development Assistance loans given to 40 heavily indebted countries and 90 percent of the loans that are not part of that program. The Foreign Ministry estimates that the additional 10 percent would eliminate about 100 billion yen worth of loans to some 30 countries. Tokyo also promised additional money to the World Bank debt-relief fund, bringing its contribution to $200 million.
According to Chief Cabinet Secretary Mikio Aoki, the step was taken because Japan, as host of this summer’s G8 summit, should set an example for the other nations in attendance. The timing suggests otherwise: The government decision followed moves by the United States, Britain, Canada and Italy.
Activists pushing for complete debt forgiveness have called the gesture misleading, alleging that the debt has been rescheduled, not forgiven. And the Foreign Ministry has said that countries that ask for complete relief will not be able to get new loans; it claims that this country’s economic circumstances make it difficult to maintain public support for the program if the donors request forgiveness.
That may be true, but the government has made much of the fact that it is the world’s leading provider of foreign assistance. If that is to be more than a mere statistic, then it is incumbent on the government to build public support for the program. Japan cannot give with one hand and take back with the other. Debt forgiveness is just that; conditioning forgiveness on the refusal to accept it is cynical and cruel.
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