Japan will not slash aid budget for East Asia

As the largest provider of Official Development Assistance (ODA) to East Asia, Japan plays a crucial role in maintaining regional economic stability. However, domestic concerns over Japan’s declining fiscal health have left others anxious about its role as a benefactor to China’s growing prosperity . Some feel that Japan is financing China’s economic growth. Nevertheless, recognizing East Asia as a “priority area,” Japan has reaffirmed its commitment to the ODA program. – YaleGlobal

Japan will not slash aid budget for East Asia

Ignoring calls at home to stop financing China's prosperity, Tokyo says it still regards the region as a 'priority area'
Kwan Weng Kin
Tuesday, August 13, 2002

TOKYO - Japan yesterday reaffirmed its commitment to using its Official Development Assistance (ODA) to aid the future growth of East Asian nations.

Foreign Minister Yoriko Kawaguchi gave this assurance at a press conference following a one-day meeting of ministers from Asean, China and South Korea chaired by Japan.

She said that despite stringent budget conditions, Japan would continue to regard East Asia as a 'priority area' and pledged 'no change in Japan's commitment to ODA for East Asia'.

Ms Kawaguchi cited, as an example, Japan's intention to support the Initiative for Asean Integration, advocated by Singapore in November 2000 to redress the intra-regional economic gap and to raise Asean's competitiveness.

Yesterday's meeting, called by Prime Minister Junichiro Koizumi in a policy speech delivered in Singapore in January, brought 13 East Asian nations together for the first time to talk about the region's development process.

The Japanese have dubbed Mr Koizumi's initiative the Initiative for Development in East Asia, or IDEA.

Ms Kawaguchi noted all the nations participating in the IDEA meeting had acknowledged the 'significant' role played by Japan's ODA in the region's development and expressed expectations for continued Japanese efforts.

But though the minister said the Asean Plus 3 framework was appropriate for the discussion of planned development in East Asia and promoting regional cooperation, the meeting did not discuss the holding of a follow-up ministerial meeting.

Japan is by far the largest provider of ODA to East Asian countries.

But because of the nation's poor fiscal health, the Japanese government has been under great pressure to cut its ODA budget in recent years.

Some Japanese politicians have urged their government to slash the amount of ODA provided to Beijing, in the belief that such assistance was helping to finance China's economic prosperity.

Yesterday, China's delegate, Vice-Minister for Foreign Affairs Mr Wang Yi, said that whether or not to cut aid was Japan's prerogative.

Noting that Japan's ODA to China last year was reduced by 20 per cent, he reminded the Japanese that ODA was not a one-way street as it had also helped to boost Japan's trade with China.

Ministers at the IDEA meeting, who included Singapore's Second Foreign Minister Mr Lee Yock Suan, also endorsed the economic development process in East Asian nations and recommended it as an example to other developing regions of the world.

Copyright @ 2002 Singapore Press Holdings