A further fall in Tokyo's ODA budget

Japan for quite some time has been trying to convince the world community that it is now time Tokyo is given a greater say in matters that shape the global outlook on important issues. In the pursuit to win the support of various nations that would help her reaching the desired destination to become a permanent member of the most important organ of the UN, the leverage that Japan has so far used was that the country has long been a very important player in the process of helping the poor to overcome difficulties in their long and painful journey towards the road of progress. Japan's key argument has always been her generosity in providing assistance to countries in need of international support.

As the country's Official Development Assistance (ODA) budget reached a record high in the second half of the 1990s, Tokyo was seen courting developing countries to win over their support, which policy-makers considered essential if the country is to become an active player in international games that go beyond the narrow scope of helping the poor. As a result, many around the world expected that Japan would most likely continue that diplomatic initiative with an inflated ODA purse. But in reality things did not happen according to expectation and much is to be blamed to Japan's troubled economic performance that was triggered by the burst of a grossly over-rated bubble economy more than a decade ago.

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The year 2004 marks the fiftieth anniversary of Japan becoming a donor nation. Japan's ODA had a humble start back in 1954 with Tokyo's participation in the Colombo Plan. Though still an aid recipient at the time, Japan's involvement in technical cooperation programme of that joint initiative to assist Asian nations helped Japan gain vital international support less than a decade after the country was forced to abandon its colonial dream on the Asian mainland. During the last fifty years, Japan has utilised ODA to support actively the development of economic and social infrastructure as well as human resources and institution building in developing countries. But the gain was obviously not one-sided. Japan too, as critics of Tokyo's ODA policy like to point out, heftily gained as Japanese companies were winning lucrative contracts in countries where ODA funds were channeled.

The gain for Japan was also not confined merely within the economic and financial sphere. Politically too, Tokyo could gain a new status as Japan repeatedly got elected to one of the ten non-permanent seats of the Security Council and its candidates periodically being chosen for crucial UN posts. No wonder, Tokyo's ODA budget saw a continuous growth until it hit the eventual ceiling in 1999, bypassing the $15 billion mark on net disbursement basis. But since then, Japan's ODA budget has been in continuous decline, reflecting the ailing state of economy that is yet to come out of a prolonged recession.

At the beginning of this week, Japan's finance ministry released the government's budget plan for 2005 fiscal year starting from April. In the draft budget, the ministry has earmarked less than $800 billion for Official Development Assistance, the lowest level since fiscal 1989, representing an almost 4 percent drop in ODA allocated in the initial budget for the current fiscal year.

The downward trend in Japan's ODA allocation is nothing new. The proposed reduction for next fiscal year will mark the sixth consecutive year of decline that started in fiscal 2000. The largest drop in ODA allocation was marked in fiscal 2002, when ODA allocation saw a sharp 10 percent downward trend. This was the direct consequence of growing criticism within Japan that much of the money was being spent on wasteful projects without bringing the desired results of helping the poor to improve their situation. The criticism also prompted the government to review Japan's ODA Charter. The Ministry of Foreign Affairs announced in December 2002 that it would review the ODA Charter, the basic document of Japan's ODA policy, and a cabinet meeting in August 2003 approved the revised ODA 11 years after it was first adopted.

The revised Charter declared the objectives of ODA as contribution to peace and development of international community and thereby helping Japan's own security and prosperity. The Charter also identified "human security" as a basic principle and "consolidation of peace" as one of its priority issues. This coincided with Japan's active involvement in peace initiatives in East Timor, Afghanistan, and Sri Lanka.

Although the scope of Japan's ODA has been expanded significantly to allow the country to use its ODA allocation as a means that would help find solutions to conflicts in various parts of the world, the ODA budget, nonetheless, never saw an increase. And as with the war in Iraq came a new responsibility to help Tokyo's closest ally finding a way out from the mess it had created, an already trimmed ODA budget is now shrinking further to accommodate the requests from such strategic partners.

One interesting aspect of Japan's ODA has always been country's focus on mid-level developing nations that are relatively prosperous compared to many others that stand on the threshold of extremity. China till today being a leading recipient of Japanese ODA does not speak well of the revised Charter's proclaimed noble intentions.

So, who are the countries that eventually will find themselves in difficulty due to ever declining budgetary allocation for Japan's ODA? No doubt, it is once again the forgotten poorest of the poor, part of whose shares are most likely to be seen diverted down the roads of Najaf, Karbala, or Kabul; and much of that amount not for the real benefit of those for whom the ODA is supposed to be targeted, but for those soldiers of fortune who are always at the forefront in the wild run of cashing in from the misfortunes of others.