A ministerial meeting of the Initiative for Development in East Asia, held in Tokyo on Aug. 12, acknowledged the significance of maintaining adequate Official Development Assistance as a tool for strengthening regional cooperation and agreed to examine how to make more effective use of ODA. The meeting was attended by foreign and development ministers from the 10 member states of the Association of Southeast Asian Nations (ASEAN) plus Japan, China and South Korea.

Japanese Foreign Minister Yoriko Kawaguchi, who chaired the session, told a joint press conference, “We have confirmed Japan’s commitment (to continue providing ODA), and we will proceed with our ODA reform by raising transparency and efficiency and making it more focused.”

In 2001, Japan was replaced by the United States as the world’s largest ODA donor — a position this nation had held for the previous 10 years. Japan’s ODA budget, which was reduced in fiscal 2002, faces a further cut in fiscal 2003. By contrast, the U.S. and the European Union have increased their ODA commitments.

Japan’s ODA policy is coming up for review amid strong criticism at home that the nation is giving China a considerable amount of such aid despite its continuing to increase its military spending. The nation’s ODA program, which the Foreign Ministry defines as “one of the most important instruments of Japan’s foreign policy” is at a crossroads.

With Tokyo’s ODA budget expected to decline for a third straight year, Tokyo’s influence in the international community is diminishing. In fiscal 2002, the ODA budget (not including special accounts) shrank by 10.3 percent from the year before to 910.6 billion yen. Current budget talks in the government aim for a 2 percent cut in fiscal 2003. The downward pressure will increase if the Foreign Ministry’s internal reform plans fail to produce tangible results.

Meanwhile, U.S. President George W. Bush has announced that the total amount of America’s ODA will be expanded by up to $5 billion over the next three fiscal years. The EU agreed at the March summit to raise its ratio of ODA to gross national income, or GNI, to 0.39 percent in 2006. In Japan’s case, ODA accounted for 0.23 percent of GNI in 2001, compared with 0.28 percent in 2000.

In an effort to counter aid-cutting moves in the government and the Liberal Democratic Party, Prime Minister Junichiro Koizumi’s diplomatic task force said in a July report that it is undesirable for Japan alone to reduce its aid when America and Europe are set to increase theirs.

As the Foreign Ministry points out, ODA is an importance source of Japan’s diplomatic prowess. If it is cut across the board in lock step with other spending items, the nation’s international diplomacy will suffer. The fight against poverty has become a common challenge for the international community since the Sept. 11 terrorist attacks on the U.S. Setting higher ODA targets is expected to be a focal issue at the World Summit on Sustainable Development that opens this week in Johannesburg.

The government’s 2001 white paper on ODA, released by the Foreign Ministry in May, emphasizes the importance of “partnership, participation and public-private interaction” as the guiding principles of aid implementation. Partnership means “making maximum use of the experience, technology and knowhow of nongovernmental organizations (NGOs), businesses, universities and local governments. Participation involves “broad segments of the public,” and public-private interaction means “two-way dialogue between the government and the public.”

The foreign minister’s private advisory forum on ODA stressed in its final report published in March that the ODA system should be drastically overhauled by promoting “public participation,” “securing transparency” and “improving efficiency.” Based on these recommendations, the General Strategy Council on ODA was established with Kawaguchi serving as the chairwoman.

In July, the Foreign Ministry announced a 15-point program for ODA reform calling for, among other things, expanded and improved audits by outside agencies, thorough ex post facto evaluations of aid projects, closer cooperation with NGOs and establishment of a human resources development center. Regarding relations with NGOs, the ministry came under criticism for banning a Japanese NGO from attending the international conference on Afghan recovery held in Tokyo in January.

Over a two-year period, the ODA strategy council plans to study aid projects country by country (involving formulation of new projects and review of existing ones) as well as sector-specific projects in such areas as education, infectious diseases and the environment.

ODA to China has come under attack from various quarters, particularly the LDP. China is not only expanding its defense budget, it is also providing aid to other countries. The government’s defense white paper says, citing published figures, that China’s military sending has continued to increase more than 10 percent annually for the past 14 years and that the figure for 2002 represents a 17.6 percent increase from the initial budget the year before.

The report adds, however, that opacity in China’s defense expenditures has increased because aggregate amounts of such spending have never been disclosed. The U.S. Department of Defense says in a report to Congress that Beijing’s defense budget does not include outlays for weapons development and certain other purposes and that the actual amount is at least three times the published figure.

At a Japan-China vice ministerial meeting earlier this month, the demand by the Japanese side for transparency in China’s defense spending and foreign aid reflected domestic criticism of Tokyo’s aid policy toward Beijing. The Chinese side reacted sharply to the request.

Private members of the ODA strategy council have raised questions about ODA to China and called for a review. However, Kawaguchi and other ministry officials have refused to conduct a review on grounds that the current economic cooperation program with China was formulated as recently as October last year.

The ministry’s passive stance seems to reflect a desire to avoid any further tensions in Sino-Japanese relations this year, which marks the 30th anniversary of the normalization of relations between the two countries. Earlier this year, bilateral ties became strained over Koizumi’s visit to Yasukuni Shrine, and over the Shengyang incident in which Chinese military police entered the Japanese general consulate to seize North Korean asylum seekers.

To build stable Japan-China relations, Tokyo needs to formulate a diplomatic strategy for China that inspires the support of the Japanese public. ODA policy must be a key element of that strategy.

Japan’s ODA charter sets forth four principles, one of which says the nation should pay careful attention to trends in military spending, the development and manufacture of weapons of mass destruction and missiles and the arms trade of countries that receive aid. Unless Beijing demonstrates transparency in these respects, Japan’s ODA to China will remain under critical scrutiny.

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