With Decline in Development Aid, Japan Fears Losing Diplomatic Clout

from World Politics Review

Jason Miks

TOKYO -- As expected, at the meeting here of G-8 development ministers earlier this month, rich countries reaffirmed their commitment to tackling poverty in Africa and pledged to fulfill past promises of aid to developing countries.

Yet for host nation Japan, the meeting came at an awkward time, coinciding with the release of a report by the Organization for Economic Co-operation and Development stating that Japan's net official development assistance (ODA) fell 30 percent in real terms in 2007 from a year earlier.

The latest figure means Japan has now dropped to fifth place among the world's major aid donors, its lowest position since 1972, and a far cry from the 1990s, when Japan consistently topped the United States.

The decline is proving of concern not just to development campaigners, but to the Foreign Ministry itself, which fears it is losing a key diplomatic tool.

"It's not good because Japan has placed a lot of its pride on its ODA," says David Arase, associate professor of politics at Pomona College in Claremont, Calif., and author of the book "Japan's Foreign Aid: Old continuities and new directions." "It can't provide troops, it's not on the [U.N.] Security Council, so when ODA goes down, it loses out."

Barred by Article 9 of its constitution from maintaining an offensive military capability, and having been so far unsuccessful in its lobbying efforts for a permanent seat on the U.N. Security Council, Japan has had to lean heavily on its aid for diplomatic clout.

But despite being confronted with the prospect of an increasingly powerful neighbor, the Japanese government announced in December it was cutting ODA by 4 percent in fiscal 2008.

Indeed, concerns over China's rise -- including its rapidly growing economy, coupled with economic stagnation in Japan -- have in recent years led to growing dissatisfaction among the Japanese public with the country's yen loans to China, which reached a peak of 214 billion yen ($2.14 billion) in 2000.

"Since 1992, China's economy has been growing by 10 percent a year," says Aichi University's Prof. Ichiro Kawabe, author of a book on Japan's diplomacy. "Chinese growth and a Japanese recession was unacceptable to right wingers, and they started criticizing Japanese aid to China."

Kawabe says right-wing opposition to assistance to China has drawn increasing sympathy from the Japanese public, many of whom feel the country has gained little from the 3.316 trillion yen ($33.2 billion) lent to China since 1979, or from its ODA efforts more generally.

"According to various polls, the cuts in ODA have been supported by public opinion," Kawabe says. "Japanese people tend to think that Japan has been discriminated against. It's the second largest economy, but it doesn't have much power relative to its economic power."

Jonathan Strand, associate professor of political science at the University of Nevada in Las Vegas, agrees there has been growing domestic disillusionment in Japan. "A cynic would say Japan's efforts are not working because they've been pursuing a [Security Council] seat for 20 years. This has created domestic criticism," he says.

Strand says Japanese development assistance has given it a certain amount of diplomatic leverage on some issues. "The example [the Ministry of Foreign Affairs] doesn't like to use is whaling, and the use of ODA to get support from countries without real ties to whaling," he says.

But he also notes that in recent years there has been an increasingly humanitarian aspect to Japanese aid. "The qualitative and quantitative studies have shown that in the past decade [Japanese ODA] has shifted to the humanitarian, as opposed to mercantilist self-interest," Strand says. "Japan gives more to poorer countries, and there is evidence that Japan's aid goes to countries with better human rights records."

Arase agrees there has been a shift. "Maybe 20 years ago, Japan used to think of ODA as a way of securing its economy," he says. "But I think now Japan is interested in creating goodwill." He also believes that humanitarian aid could be hit not only by ODA cuts, but by structural reforms in Japanese lending, as the Japan International Cooperation Agency, which is mandated to improve international cooperation, completes a merger this year with the Japan Bank for International Cooperation, which is traditionally more focused on promoting Japanese exports.

"I think that could set back humanitarian progress, as it is [the Ministry of Foreign Affairs] that sees the value of a humanitarian element," he says.

Jason Miks is a Tokyo-based writer and a managing editor with the Center for International Relations.