Japan enacted its ODA Charter as a Cabinet decision in June 1992. Comprising fundamental Japanese policies on aid, the Charter is the product of a long-term, comprehensive perspective and a mindfulness of Japan's experiences in the ODA field.

The Charter has several philosophical underpinnings:

1) The imperative of humanitarian considerations,

2) Recognition of the interdependent relationships among member nations of the international community,

3) The necessity for conserving the environment, and

4) The necessity for supporting self-help effort of developing countries.

Furthermore, in the "Principle," the Charter lists four key points, in addition to principles set forth by the UN Charter as important elements to be considered in aid implementation. First, it emphasizes efforts to reconcile the needs of development with environmental protection. Second, it stresses that aid must not be utilized for military purposes or promoting international conflicts. Third, it urges that sufficient attention be paid to trends in the recipient country's military spending, including the development or manufacture of missiles or weapons of mass destruction, and weapons trafficking. Fourth, it also urges attention to recipient accomplishments in democratizing, establishing market-oriented economic systems, and assuring basic human rights and freedoms. The Charter mandates that decisions to provide aid be made on the basis of a comprehensive approach that takes these points into account and that also weighs such factors as recipient-country requests, economic conditions, and bilateral ties.

As noted in its own provisions, putting the ODA Charter into effective practice demands attention to a full range of issues, including bilateral ties.

Japanese ODA is extended to developing countries where governments and people are facing various concrete problems, and the impact of foreign aid on domestic matters are not always clearly found. The influence of ODA must be gauged on a case-by-case basis.

Japan may provide aid more generously to countries that show progress in democratization or transition to a market economy to encourage such positive progress.

Careful decisions will be necessary when trends or developments in a recipient country worsen. The values expressed in the "Principle" of the Charter are pursued through Japan's foreign policy. Nonetheless, questions about military expenditures and issues concerning the democratization process will often have a direct bearing on a given country's internal affairs or efforts to maintain its own security. Accordingly, handling of these issues could conceivably backfire. In addition, it is necessary to consider a positive reaction if a country shows improvements in these areas.

The needs of the people in recipient countries also demand consideration. In the event it decides for some reason to suspend aid to a given developing country, Japan should be flexible enough to exempt, for example, humanitarian or emergency aid, or aid given through international organizations or NGOs.

In application of the principle of its ODA Charter, Japan considers these factors comprehensively. In the event it decides to take action, including suspension, Japan will need to consider the depth of the recipient country's problem, as well as the impact that would be caused by Japan's measures, and weigh these factors into its final decisions which include the timing or the scope of measures.

In terms of the ODA Charter's emphasis on transition to market-oriented economic systems, China has continued to demonstrate progress. Japan has provided China aid in recognition of the fact that continued support for its economic transition and participation in international affairs is in the interest of East Asian peace and stability. However, in August, 1995, Japan imposed a freeze on most of grant aid to China because China continued to engage in nuclear weapons testing despite repeated requests by Japan to bring such activities to a halt. As a consequence, total Japanese grant aid to China shrank from about ¥8 billion in FY 1994 to less than ¥5 billion in FY 1995. Following its last test in July 1996, China declared a moratorium on nuclear testing, and became a signatory to the Comprehensive Test Ban Treaty. In response, Japan decided to resume grant assistance to China in March 1997.

Many foreign countries, and developing countries in particular, are now well-aware of Japan's ODA Charter. In its policy dialogues to date, Japan has taken every opportunity to explain the Charter to ODA recipients. Furthermore, Japan is prepared to utilize similar opportunities in the future to explain the policies of the Charter, as well as the current practice of its application.

Through the application of the principle of the Charter, Japan has been sending a substantially clear message to the developing countries concerned, as is shown in the aid record. However, the Japanese public has hardly been informed of such efforts. In fact, some people demand that the principle of the Charter be much more rigorously applied. This suggests that the government needs to further disclose information and facilitate promotional activities to encourage a wider debate on the issues.

Since the adoption of the ODA Charter, Japan has witnessed a growing level of domestic debate concerning foreign policy and ODA. We hope that this trend will develop further and help encourage heightened public interest in ODA.

Chart 6-1 The ODA Charter as Applied in Practice - An Example of Positive Linkage

Chart 6-2 The ODA Charter as Applied in Practice - An Example of Negative Linkage