Wealthy Japan opens its purse. Asia, Africa, Latin America receive Japanese aid

By , Staff writer of The Christian Science Monitor

Africa and Latin America need money. Japan has it.

After a great deal of arm-twisting by the United States, Europe, and international aid groups, Japan is planning to boost its assistance to the poor nations of the world.

``We very strongly feel we should take a responsible role consonant with our economic strength,'' Hiroshi Kitamura, Japan's deputy minister of foreign affairs, said in an interview in Boston this week. ``Part of that responsibility is foreign aid.''

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Altruism is not the only reason. Nathaniel Thayer, an East Asia specialist at Johns Hopkins University, notes that the Japanese ``are embarrassed to be so wealthy.'' They also know, he says, that if they do not provide more foreign aid, they will be pressured to shoulder a bigger military burden. This is something the Japanese and their neighbors are very reluctant to see happen.

So official development aid from the Japanese government is growing, albeit slowly. It totaled $5.6 billion in 1986. For the fiscal year beginning April 1, Japanese aid is projected at $9.1 billion. This would make Japan the second largest donor in the world after the United States.

The third world desperately needs money. The debt crisis has constrained growth by channeling off earnings into debt service. Private banks are extremely reluctant to make new loans to the third world. Problems such as recurrent drought, AIDS, and low commodity prices also hurt the developing world, especially sub-Saharan Africa.

And the US - fighting its budget and trade deficits - is limited in its ability to aid poorer nations. Under the Reagan administration, development assistance has been deemphasized. At the same time, once-generous nations such Saudi Arabia have been hurt by lower oil prices and are trimming back their development assistance.

Japan, however, is a different story. Huge new wealth has washed over the nation in recent years - first with the profits from exports and now with the windfall that the stronger yen is bringing to Japan. Japan does not have the kind of military commitments the US has. Its wealth is relatively unencumbered.

Thus, notes Professor Thayer at Johns Hopkins, the world is ``banging on Japan's door.'' Only if Japan gets into economic difficulties, he says, will the pressure decrease.

In a policy speech to the Japanese Diet last month, Prime Minister Noburu Takeshita repeated a promise to recycle more than $20 billion from Japan's trade surplus to developing countries during the next three years.

But that is still quite modest. Japan ran a $90 billion surplus last year and spends only 0.3 percent of its gross national product on development aid. That puts it near the bottom of the 18 well-to-do countries in the Development Assistance Committee of the Organization for Economic Cooperation and Development. (Japan is above the US, however, while Norway is at the top of the list.)

Critics also frequently charge that Japan ``ties'' its aid by requiring it be used to buy Japanese goods and services. Mr. Kitamura denies this, saying the charge is no longer valid and that most of the new aid, especially to Africa, is ``untied.''

Since the end of World War II, Japanese development assistance has concentrated on Southeast Asia and South Korea - on countries with which Japan needed to make war reparations. But in recent years, these nations have made steady progress toward higher standards of living.

``Some of those Asian countries have now become `newly industrialized countries' [South Korea, Taiwan, etc.],'' Kitamura says, ``so now we are shifting our weight from the Asian side to the African countries and the Near Eastern countries and some of the Latin American countries.''

It is a small shift at this point. The bulk of Japanese aid still goes to Indonesia, India, China, Malaysia, Burma, South Korea, Thailand, and the Philippines.

Thayer of Johns Hopkins notes that Japan prefers to give to poorer nations through organizations such as the World Bank. This is less risky than direct assistance and shields Japan in the event of controversy. Regardless of how it is done, however, Kitamura says Japan increasingly understands the self-interest argument.

``Without the prosperity of the South,'' he says, referring to the poorer half of the world, ``the North, including Japan, cannot have prosperity. That is what many Japanese feel strongly about now.''

Kitamura traces this change of thinking from a basically mercantilist viewpoint to a more global one to 1986, when the Miyakawa Report urged the government to begin shifting the powerful economy from exports to domestic demand and a greater role in maintaining world economic stability.

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