Use Resources to Ease Poverty, Tokyo Told

By Suvendrini Kakuchi, IPS, 19 October 1998

TOKYO, Oct 19 (IPS)—Japan's official aid to developing countries has been synonymous to the building of roads, bridges, ports and other infrastructure. And it served its purpose then.

Now, development experts are urging the government to make Japan's aid budget, the largest in the world, focus more on social services—rather economic development—especially in its two biggest aid recipients China and Indonesia.

A report on China compiled by the Japan International Cooperation Agency (JICA), one of Japan's official leading aid dispensers, says aid to that country must be geared toward supporting environmental and social issues to help it advance its market economy.

Health, education and social welfare rather than economic development must be given priority, says the report. Attention must also be on reducing poverty and closing the wide gap between regions in China.

The report will be sent to the Japanese Foreign Ministry in early November for its attention.

Japan has given China a total of 1.85 trillion yen (about 15.6 billion U.S. dollars) in low-interest yen loans for 210 projects between fiscal 1979 and 1996, making it the biggest recipient of Japan's ODA budget followed by Indonesia.

But the report says the development aid's main emphasis has been economic development, ignoring China's social and environmental problems that have accompanied its rapid growth rate of more than 10 percent over the past decade.

Professor Toshio Watanabe of the Tokyo Technology's Graduate School, who authored the report, called for monetary aid to develop infrastructure in the lesser developed areas in central and western areas of China, such as Hunan, Guizhou and Sichuan where there is a large economic gap compared to the coastal cities of Beijing and Shanghai.

He also pointed out the need for support for environmental protection and food supply as well as projects designed to combat urban pollution caused by car exhaust, acid rain, and swelling refuse and sewage.

China's huge environmental problems have been the subject of media spotlight recently. A series of articles by the Yomuiri Shinbun, Japan's leading daily, has focused on environmental issues such as desertification and flooding as a result of environmentally unsound development projects, as well as the rise in respiratory diseases because of pollution .

Poverty is now the greatest uncertainty in the world and it has often closed off rich countries from other countries as well as led to ethnic conflicts and terrorism. Japan should make the extermination of poverty the top priority for ODA, stated Tuneo Sugishita, senior writer at the Yomuiri Shinbun.

Two weeks ago a group of ODA experts on Indonesia and representatives of non-government organizations called on the Japanese Diet to re-examine Japanese aid to Indonesia.

Against the backdrop of Indonesia's economic downturn and growing poverty and food shortages leading to public protests, they asked that Japan learn from the mistakes of providing huge yen loans for the development of infrastructure, ignoring the need to balance out on social aspects.

There is a need to force the Japanese government to realize the need to forward funds directly towards reducing the huge gap between the rich and poor in Indonesia, says Professor Kazuo Sumi at Niigata University, who participated in the meeting.

The recent spotlight on Japanese ODA comes in the wake of the Japanese recession that has forced Japan to cut its ODA budget for 1998 by 10 percent.

The emphasis is therefore on making ODA, the centrepiece of Japan's foreign policy, more efficient. Quantity is now taking second place to quality, say critics.

In order to gain public approval for continued aid to developing countries in the light of the growing economic hardship at home, the Japanese government has promised to make ODA resources more efficient in alleviating poverty and environment problems.

People tend to pound away on environmental, poverty and humanitarian issues rather than economic infrastructure. Helping eradicate poverty is part and parcel of diplomacy. No can deny the need to extend humanitarian assistance, points of Mitsuo Miura, economic writer at the Yomuiri Shinbun.

ODA is expected to be a focal point in the forthcoming compilation of the national budget for 1999 and experts say aid levels may remain the same, or be cut.

In addition, projects will be scrutinised and at the urging of experts, transparency in extending aid to developing countries will be stressed.

The Foreign Ministry also reports that Japan's ODA will focus on Asia once again to help resolve the financial crisis. Low-interest yen loans will be extended for environmental projects in Southeast Asia and humanitarian aid for the elderly and children in developing countries will also be a priority.