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Monday, May 26, 2008
Tokyo ready to shift foreign-aid focus from Asia to Africa
Japan is embarking on a diplomatic sea change.
In a clear departure from the long-term emphasis of doling out official developmental assistance in Asia, Japan is boosting aid to Africa, and the international conference this week in Yokohama on African development will underscore this change.
The new course comes as global competition for resources is intensifying and China is sparing no expense to ensure its needs are satisfied.
At the TICAD, or Tokyo International Conference on African Development, taking place this Wednesday through Friday, Prime Minister Yasuo Fukuda will announce a new plan to double ODA to African countries to ¥200 billion over the next five years.
"Extending assistance is not only for humanitarian reasons but is also in Japan's national interests," said Toshio Watanabe, president of Takushoku University in Tokyo and an expert on development economics.
Behind the shift is an intensifying race in a resource-hungry world to extend aid to African countries whose resource-rich economies are finally emerging from long slumps and in some cases civil wars.
Sub-Sahara nations collectively logged zero economic growth in the 1980s, and most donor countries had long been pessimistic about Africa's economic future.
That attitude has passed.
Sub-Sahara Africa began posting rapid economic growth after 2002, thanks in part to the recent surge in prices for their commodities. A growing sense of political stability has also contributed to the growth.
Africa in general posted 3 percent to 6 percent economic growth every year since 1999, well outpacing the overall growth of OECD nations during the same period.
The Foreign Ministry also hopes to use TICAD as a launchpad for expanding ODA, which has seen a drastic fall in the past decade due to the ballooning government debt.
In 2007, Japan fell from being the world's third-largest to fifth-largest donor state in terms of overall net ODA — its lowest ranking since 1972. Japan was the top ODA donor from 1993 to 2000.
"No opportunity could be better than TICAD" for the Foreign Ministry to demand more ODA for Africa, a senior ministry official said.
After lengthy negotiations, the Foreign Ministry prized from the Finance Ministry a compromise to double ODA for Africa by 2012, excluding debt waivers.
But the two ministries are still at odds over the total aid amount, and a key government panel will have to hammer out a basic economic policy in June.
Current policy obliges the government to cut ODA allocations from the general account by 2 percent to 4 percent every year until 2011. Whether the Foreign Ministry can reverse this remains to be seen.
Takushoku's Watanabe points out that drastically cutting ODA will severely hurt the nation's diplomatic clout.
"ODA is one of the few sources of Japan's diplomatic power," Watanabe said, warning that Tokyo seems to be disarming itself by cutting aid.
Japan used ODA skillfully in the past to solicit support from developing countries when voting took take place at various international organizations, most notably the U.N.
Watanabe also argues that failing to boost ODA to resource-rich African nations would severely damage Japan's national interests if and when it suffers shortages, a scenario gaining greater credence amid soaring oil and food prices worldwide.
Japan held the first TICAD in 1993. At the time, it was one of the few global initiatives promoting economic growth in Africa via development assistance.
Since then, TICAD has taken place every five years. This time around, participants will focus on boosting economic growth, ensuring "human security" by addressing basic needs in terms of poverty and disputes, and addressing environmental issues, particularly climate change.
The circumstances surrounding the event are entirely different this time.
Major Western nations have more than doubled ODA for Africa compared with 2000 levels, in part after recognizing — following the Sept. 11, 2001, terrorist attacks in the U.S. — that poverty is a key source of instability.
China in recent years has also extended vast assistance to Africa, particularly Sudan, Angola, Nigeria and Zimbabwe, in a bid to secure crude oil, natural gas and rare metals.
In 1999, Chinese companies completed construction of a 1,500-km pipeline in Sudan that now reportedly provides half of China's crude oil.
In addition, resource-hungry China organized a development forum like TICAD in Beijing in 2006, inviting 48 African countries.
Although China, which is also a recipient of Japanese ODA, does not disclose the total amount of aid it gives to Africa, Watanabe of Takushoku University said an official of the OECD's Development Assistance Committee estimates it is probably the world's largest in terms of value.
"We would never be able to beat China (in African aid). Japan's presence has certainly sunk," a senior Foreign Ministry official admitted.
Japan is now trying to differentiate its African aid from that of China, which mainly focuses on massive infrastructure projects.
According to Foreign Ministry officials, Japan is emphasizing community-based assistance to meet basic needs such as education, sanitation and agricultural support, and efforts to boost Japanese private-sector investments in Africa.
On April 18, the Foreign Ministry announced a major policy change to allow firms to propose ODA projects to recipient countries.
In the past, only projects proposed by recipient nations were considered, because the government feared criticism that it was favoring certain companies.
Although it is still uncertain if the new tack will be effective, Foreign Ministry officials at any rate hope the change prompts companies to invest more in Africa.
Delegates from Africa appear to share this view.
Jean-Christian Obame, the Gabon ambassador to Japan, told The Japan Times recently that he hopes Japan will strengthen ways to facilitate private-sector investment during TICAD.
"We want TICAD to be more action-oriented" compared with the past meetings, he said.