 By Richard Johnson
IDN-InDepth NewsAnalysis
PARIS (IDN) - Japan has been urged to reverse the pattern of decline in its international development cooperation budget and to make progress towards its committed aid targets and regain its former position as a leading donor.
A new review of Japan's official development assistance (ODA) says that though Japan considers aid as an important tool for building friendships with other countries and also wants its aid to benefit the country's economy in the medium term, the volume of Japanese ODA budget -- excluding debt relief -- continues to suffer decline.
Japan’s overall development co-operation budget for 2009 was around USD 9.5 billion, equivalent to 0.18 percent of gross national income (GNI), down from 0.19 percent of GNI in 2008 and a long way from the 0.7 percent of GNI target.
Japan lost its prized position as the largest bilateral donor in volume in 2001. The Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development (OECD) welcomed the 10 percent increase in Japan’s development cooperation budget in 2008 compared to 2007 but noted that preliminary figures for 2009 indicate that there has since been a 10 percent decline, cancelling out gains made the previous year.
The OECD DAC peer review notes that in addition to its strong focus on Asia, Japan is now supporting Africa and helping developing countries in Asia to share experiences with those in Africa. It is also boosting the capacity of partner countries to cope with the effects of climate change.
The creation of the new Japan International Cooperation Agency brings many aspects of Japanese aid under one roof. This will allow Japan to increase the efficiency and effectiveness of its aid.
"Raising its voice and sharing its very relevant experience, as well as increasing its coordination with other donors and its alignment with partner country priorities and systems would strengthen Japan’s influence on international development issues and make its own aid more effective," the peer review states.
But to ensure Japan and its partners get maximum value for money, says the review, Japan needs to make progress towards untying its aid from the purchase of Japanese goods and services. It also needs to ensure that all relevant policies -- whether international or domestic -- support, or at least do not undermine, its international development efforts.
Japan has established an effective and rapid system for responding to humanitarian emergencies. But, says the peer review, it should ensure its humanitarian assistance is supported by a clear policy statement on humanitarian action in situations of conflicts and fragility.
BILATERAL AID
The review points out that Japan has a strong preference for bilateral aid, which accounted for 84 percent of its aid in 2008. This preference reflects concerns about the visibility of Japanese aid and its importance for political leverage and as a foreign policy instrument.
Japan uses three main channels or "schemes" for its bilateral development assistance: (i) loans, which accounted for 47 percent of Japan's gross bilateral ODA in 2008; (ii) grants (40 percent); and (iii) technical co-operation (13 percent).
"The relatively high use of loans reflects the fact that Japan finds it easier to mobilise resources for loans than for grants. Japan also believes that the requirement to repay encourages recipients to be fiscally more responsible and to allocate scarce resources more efficiently, which links with its emphasis on building partners’ self-reliance," notes the review.
"However, the gross volume of loans has not grown significantly in recent years, since Japan has re-scheduled and forgiven some debts and become more conscious of partners’ ability to repay when agreeing new loans," the review adds.
The Development Assistance Committee, which groups major aid donors that are members of the OECD, has issued its main findings and recommendations on Japan as part of a series of examinations of member aid policies and programmes.
Every three to four years each of the 23 DAC members, which also includes the World Bank, the International Monetary Fund (IMF) and the UN Development Programme (UNDP) as observers -- is scrutinized by its peers within the Committee.
Five different member countries are peer reviewed each year. The aim is to assess the extent to which the development policies, strategies and activities of the reviewed country meet the standards set by the DAC.
Members provide constructive criticism and recommendations based on a report that touches on aid policies, volumes, institutions and field operations. There are no sanctions if the country fails to take the recommendations on board. The exercise is meant to encourage positive change, support mutual learning and raise the overall effectiveness of aid throughout the donor community.
RECOMMENDATIONS
Among a set of recommendations the peer review makes is that in order to build on its strong strategic framework for development co-operation Japan should:
-- Update its policy framework, to refer specifically to Japan’s commitment to aid and development effectiveness and to policy coherence for development. The process could also be used to increase the substantive engagement of members of the Diet (parliamentarians) and other stakeholders.
-- Use a policy statement on policy coherence for development to raise awareness, and improve the understanding of the concept amongst government ministries and agencies, the Diet and the wider public. It can then use its existing inter-ministerial co-ordination mechanisms to implement and monitor this policy statement.
-- Strengthen capacity within the government for monitoring, analysing and reporting coherence issues and make more use of independent analytical capacity (research institutes, universities) for exploring the development impact of Japanese policies. Japan should share its lessons from progress in this area with other DAC members.
-- Adapt its development co-operation to suit situations of conflict, fragility and poor governance, using written strategies drawing on Japan’s own experience and the lessons collected by the wider donor community.
-- Write and adequately fund a strategy, preferably whole-of-government, to increase public awareness of development and to support a more proactive approach to communication and the engagement of all major stakeholders.
To ensure that the country meets its commitments and gets the most out of its ODA, says the peer review. Japan should:
-- Set a timeline for increasing volumes to regain ground lost over the previous decade and make progress towards meeting the UN target of 0.7 percent ODA/GNI and other existing commitments. To support this Japan should obtain political backing for an indicative multi-year framework for all of ODA and broadly how it will be allocated.
-- Review its ODA portfolio to ensure that it meets the requirements of the DAC Recommendation on the Terms and Conditions of Aid in all future years.
-- Draw up a clear strategy for supporting NGOs, including (i) harmonised and simplified NGO funding schemes and (ii) how Japan will continue to increase its dialogue and engagement with both Japanese and partner country NGOs.
-- Agree a formal strategy for multilateral aid to help to guide allocation decisions. Give more weight to core funding of those multilaterals which are effective and aligned to Japan’s own priorities rather than earmarked funding and the use of separately administered funds. (IDN-InDepthNews/23.06.2010)
Copyright © 2010 IDN-InDepthNews | Analysis That Matters
-----
Related IDN articles:
http://www.indepthnews.net/news/news.php?key1=2010-06-19%2001:39:42&key2=1
http://www.indepthnews.net/news/news.php?key1=2010-06-13%2012:33:56&key2=1
http://www.indepthnews.net/news/news.php?key1=2010-06-10%2018:40:30&key2=1
External link:
http://www.oecd.org/department/0,2688,en_2649_33721_1_1_1_1_1,00.html
|
