Japan has the third largest economy in the world with close to five trillion dollars in gross domestic product (GDP). It is also one of the top 10 countries in the developed world to open its coffers to help poor countries such as Ethiopia. In the early 1950s, it paid reparations to East Asian countries who it wronged, mainly during the Second World War. Now Japan commemorates 60 years of largess to the world’s poor through its cooperation agency, Japan International Cooperation Agency (JICA). A few weeks ago, its president, Akihiko Tanaka, met with journalists from recipient countries, in JICA’s Tokyo headquarters, to answers questions about JICA’s prospects in times of recession, slashed budgets and refocused priorities by the Japanese government.
Fotune: What do the Japanese people and their government gain from providing official development assistance?
Akihiko Tanaka: There are not many direct and immediate benefits to us in many cases. But there are many indirect and long term benefits. We want to contribute to the betterment of society, while the tangible results we would like to see are the betterment of our partner countries. There is big a benefit we obtain from our long term cooperation with South East Asia, from its emergence as a dynamic economic region where Japanese companies find a huge market. And another important benefit in the long run is the long term friendship between the Japanese and the peoples of partner countries.
These include broad and general types of friendships, and sometimes it creates individual benefits to those who participate in the development of these partnerships. Many JICA volunteers, young and old, have gained a lot for their activities in the future, after spending two years in partner countries working together. And sometimes, some of the projects that involve complex issues, technology and techniques used in solving them could be used in this country too. For example, there is a mountain called Melapi and Java in Indonesia, that has frequent volcanic eruptions. We have been cooperating with the Indonesian government to create a way to limit the damage caused by the eruption to buildings and dams. The participation of those Japanese experts helps because we have many volcanoes in this country.
Q: In times of economic stagnation and growing skepticism among many Japanese what approach are you planning to take in setting priorities on what to support and finance? For example JICA’s budget has been slashed in half. Will it be on areas of interest, sectors of interest or are you going to refocus on private sector growth?
Over the past 20 years, during the period of economic stagnation the Japanese government budget has been worsening. There is fair amount of skepticism amongst Japanese public opinion about the development assistance. The budget for official development assistance has decreased very much.
It is the Japanese government, rather than JICA that decides in which countries Japan should spend its resources, and how much. I am not in a position to say much about the distribution of our budget. Our role at JICA is how effectively we can implement the projects that are agreed opon between JICA and partner countries.
But my observation is that Japan’s development cooperation is globally oriented; we do not restrict the countries. We would like to have programs in the countries where the needs exist and where Japan can usefully contribute to the betterment of conditions. But again, under the fiscal constraint, we cannot do everything that our partner countries want us to. We have to be rather selective; and we would like to be as global as possible and probably more selective as to the sectors in the partner countries.
Q: If you decide to promote Japanese interests using foreign assistance, will you be comfortable that foreign aid is used as a tool to advance foreign policy, even if that is economic diplomacy?
For any country, development cooperation is a part of foreign policy, if broadly defined. In that respect, we would like to have better diplomatic relations with our partner countries where we are working in development cooperation. Again, for specific policies, you might ask officials at the Foreign Ministry. But as somebody in charge of the implementing agency, our main mission is to improve the specific sectors that we are working on in our partner countries. We all welcome the improvement of diplomatic relations with our partner country governments as a result of our work being effective.
Q: Your Foreign Minister said that he would like to see Japanese aid create a broader macroeconomic situation where the countries’ economies grow so that Japanese companies would go in to advance their business interests.
That depends on how you define the national interest. There are tangible benefits that we have out of development cooperation. That comes, for example, from the development of a region. I believe the development of a region of our partner countries is in the interest of our national interest.
I believe what the Foreign Minister mentioned is that as a result of Japanese assistance, the recipient countries’ economies grow, and that would provide a greater market for Japanese companies, which in turn contributes to the benefit of the Japanese economy. But, of course, the creation of better markets as a result of development is not exclusively beneficial to Japan.
The expansion of markets is for the good of the public; you cannot attach conditions to the partner country to create special access to Japanese companies. Development as a whole is open to everyone.
Q: Many of the mega infrastructure projects Japan pays for in poor countries have little to show for grassroots’ benefit. The success rate is not so good where corruption and incompetence is seen and your local partners let you down and your money gets stolen. How are you going to maintain your track record in these challenges?
This is an issue that we need to tackle very carefully and energetically. We want quality growth with inclusiveness, sustainability and perseverance. This quality growth is easier said than done though. This is a dilemma of the development agencies of cooperation. They are under scrutiny by the public and by parliaments. We were demanded to design projects that will succeed.
There are certain projects that can succeed following standardised projects. There are some that can succeed and there are others that are really needed, but may involve a lot of challenges. If we are only motivated by maximising the number of successful projects, we may leave these out. That is a tendency that I would like to avoid. I encourage our staff to design the needed projects, however difficult they are.
Q: I just want to know if there is consensus between the governing party and the opposition regarding international assistance. What happens to your position if the government in power now gets defeated by another party?
I was appointed by the Foreign Minister in the previous government of the Democratic Party of Japan. I continue to keep this position in the DLP. There is a general consensus amongst Japanese political parties about the necessity and modalities of Japanese official development assistance. Of course, there are certain differences; for example, in the previous DPJ government, there was very strong pressure to reduce all possible kinds of waste in our activities. We were requested to sell certain properties that we had, but that does not affect the general pattern of the policy toward Official Development Assistance (ODA).
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