Analyze the changes in the Japanese ODA policy towards China since 1979

Graduate School of Media and Governance

Rei Watanabe

 

Contents

1. Introduction

2. Overview of Japan’s ODA

3. Changing Japan’s ODA towards China

4. New ways of aid giving

5. Conclusion

 

1.     Introduction

The purposes of this essay are to analyze the historical facts of Japan’s Official Development Assistance (ODA) and make its problems clear. In addition, based on this analysis, I would like to suggest a new solution. The essay will focus on the ODA towards China because China is the single largest recipient of the ODA and it is the most controversial recipient.

ODA is defined by the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD). For the DAC, aid qualifies as ODA on three criteria: a) It has to be undertaken by official agencies; b) It has to have the promotion of economic development and welfare as its main objectives; c) It has to have a grant element of 25 per cent or more (Cassen, 1986).

The essay consists of three parts. In the first part, I am going to give an overview of Japan’s ODA. Secondly, I will focus on the ODA towards China and explore some problems. Finally, I will suggest new ways of aid giving. This time I could not refer Japanese and Chinese publications, that is why the argument has some limitations.

 

2.     Overview of Japan’s ODA

According to DAC, Japan had been the world’s largest donor of Official Development Assistance (ODA) between 1993 and 2000. In 2002, Japan was the second largest donor country. Although Japan has contributed to the world development as a top donor, the ODA has been criticized not only internationally but also domestically. There are a lot of reasons for the criticism. To understand the criticism, firstly we need to examine an overview of the features of the ODA.

Japan is a small country without raw materials so that it is necessary for it to trade to survive. As a trading nation, Japan needs to seek trading partners. In this point, because developing countries have an amount of non-exploitable resources such as oil, coal and gas, Japan has used the ODA to secure these resources. In addition the Japanese constitution is not allowed to possess an army. Therefore Japan can only contribute to the world development and peace thorough economic assistance. In other words the ODA is an important diplomatic tool for Japan.

Compared with other DAC countries, the ODA has some striking characteristics. For instance, the ODA has mainly focused on building infrastructures. Moreover it is carried out by the central government and involvement of civil society is limited.

Because of these characteristics, it has been criticized as placing too much emphasis on infrastructural assistance and people do not go to developing countries to assist. Especially the ODA towards China bears the brunt of these criticisms because China is the single largest recipient country. This essay will focus on the ODA towards China and analyze the problems resulting from this.

 

3.      Changing Japan’s ODA towards China

In 1979 Japan started to give the ODA to China. There were some emotional and practical reasons. Firstly, after World War U, China did not demand compensation for the war reparations to Japan, so that the Japanese government considered repaying to give economic assistance for China’s attitude. Secondly, on one hand, China is a huge country with raw materials and energy resources to export overseas. At that time however, China did not have fundamental infrastructures and technology to exploit these resources. On the other hand, Japan is a small country without raw materials and Japan had faced the oil crisis in Arabic countries and needed to find another way to get energy supply. Therefore it seems that Japan and China had common interests to Japan’s ODA.

Japan had given multi-years aid packages coordinated with the Chinese five-year economic plans. The first yen loan, was of 331 billion yen, was given between 1979 and 1984, and it focused on transportation infrastructures such as building railways, roads and ports. The second yen loan, between 1984 and 1989, was 540 billion yen, also given to contribute to basic infrastructures.

From the beginning of 1990s, Japan has changed its ODA contents towards China because in the 1980s the ODA had mainly focused on infrastructure assistance, and it had been criticized by another donor countries and international organizations. For that reason, Japan needed to reconsider about its ODA policy. In 1992, an ODA charter was adopted in an attempt to improve ODA quality (Fujisaki, 1996). In the ODA charter, Japan expressed that its ODA focus on environmental preservation. In the same year, at the UN conference on Environment and Development held in Rio de Janeiro, Japan announced the goal to expand bilateral and multilateral aid to the environment (Drifte, 1998).

However whereas China has achieved remarkable economic growth in the past 20 years especially in the coastal area, it has caused environmental problems. Although the Chinese government regards environmental protection as a vital task (MOFA, 2001), it is difficult to cope with both economic growth and environmental protection at the same time. Furthermore since the environmental problems are global issues, which spread beyond boundaries, Chinese environmental problems affect neighboring countries including Japan. As a result, the contents of Japan’s ODA towards China have changed from infrastructural oriented to environmental oriented.

In addition, there is perception gap toward Japan’s ODA between Japan and China. That is Chinese tendency is to recognize the Japan’s ODA as atonement for Japan’s wartime aggression. Japan has already sufficiently paid for the behavior, any further economic assistance does not relate to war compensation (Kawai, 2001). In that point, Chinese environmental problems are common problems for both of them, so that changing the ODA policy is inevitable.

 

4.     New ways of aid giving

In the 1960s Japan had also experienced severe environmental problems such as air and water pollution similar problems to those experienced by China. At that period, Japanese local governments had taken the initiative to deal with these problems because the contamination affected ordinary people’s lives. For that reason, in the area of environmental protection Japanese local governments have high knowledge and well skilled experts.

If the local governments can participate in overseas assistance through the ODA scheme, not only they can make the best use of the knowledge of environmental protection in developing countries but also improve the quality of the ODA. Although it is difficult for local governments to participate in the ODA under the present system, some local governments have already started international environmental cooperation at the local level.

Moreover, Kitakyushu, one of Japanese local government, had experienced severe environmental pollution, succeeded in using ODA budged to local environmental cooperation for Dalian-city in China. This is an important precedent for the ODA. If we can analyze the decision-making process of Kitakyushu-Dalian environmental cooperation and make it a model case of participation of local governments in the ODA, the ODA can avoid being criticized.

 

5.     Conclusion

In the essay I have discussed the problems of Japan’s ODA, focussing especially on the ODA towards China. Although there have been a lot of problems, it might be difficult to solve these problems simultaneously. However, if the Japanese local governments can participate in the ODA scheme, I believe that we can make the ODA more worthwhile.

Even though in the essay, I could not analyze the Kitakyushu-Dalian environmental cooperation specifically, in future research using Japanese and Chinese publications I will try to do so. Moreover, I really feel that in order to understand the decision-making process I need to interview the people who were involved in the cooperation, not only in Japan, but also in China.

 

 

 

Bibliography

 

 

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(http://www.mofa.go.jp/pilicy/oda/category/environment/pamph/2001/posture.html) 03/09/2003

 

---Zhou, Xiaoming. (1991) Japan’s official development assistance program; Pressures to expand, Asian Survey vol.31 No4