Chapter 1

Section 2. Changes in International Trends Surrounding ODA

Section 1 described the domestic background to the revision of the ODA Charter, but when setting about the revision of the ODA Charter, factors such as changes in international trends surrounding ODA must not be forgotten. As was stated in the 2002 White Paper, due to the further advancement of globalization and changes in the international environment brought about by the end of the Cold War, new development issues have emerged and the developed countries have enhanced their efforts to deal with these issues. It is necessary to rethink Japan’s ODA also by taking into account these new conditions.

1. Emergence of New Development Issues and Concepts

The Exacerbation of Poverty

In the 1990’s, due to the shift to free market economies in the former Eastern Bloc countries, namely the Eastern European countries and former Soviet republics, the deregulation of trade and investment, and the rapid development of information and communications technologies, the movement of people and economic activities started to be carried out on a global scale. This advancement of globalization produced the benefits of growth in the world economy and improvements in living standards. In East Asia, along with economic growth, the number of people living on less than one dollar a day declined from 700 million in 1975 to 280 million in 2000. On the other hand, this does not mean that economic growth and improved living standards were realized equally throughout the world. For example, in Sub-Saharan Africa, the poverty problem is being exacerbated in many countries and economic disparities among developing countries are growing. As for the Asian Region, this region still remains home to the largest population of impoverished people in the world, especially in South Asia. It is estimated that currently there are about 1.2 billion people living in absolute poverty in the world, defined as living on less than one dollar a day⁷, thus dealing with the exacerbation of poverty is an urgent issue.

The Importance of Peace-building

In the post-Cold War international community, disputes stemming from ethnic, religious, historical issues, etc. and are complicated by political and economic motivations have become more prominent and regional and civil conflicts have broken out frequently. This has resulted in a large number of refugees and displaced persons, and in human rights infringement cases where children are forced to participate in the fighting, and thus humanitarian assistance has become necessary. Conflicts also instantly wipe out the results of development efforts made over many years and result in enormous economic loss. Therefore “peace-building”—emergency humanitarian assistance, post-conflict reconstruction and development assistance, and prevention of conflict and its recurrence—has become an important issue. It is necessary to implement “peace-building” in a seamless manner based on the following different stages: dealing with the causes of conflict, promoting an end to conflicts, reconstruction assistance for the damage caused by conflicts, and assistance to prevent conflict reoccurrence. The role fulfilled by ODA as a means to meet these various needs is attracting attention.

Perspective of Human Security

In recent years, there is growing importance to provide assistance to people in countries or regions where unrest or conflict has destroyed not only the economic bases, but also the basic framework of the state, including political and social systems, leaving the country or region with no government or with a weakened governance capacity. People living in these kinds of countries are facing the reality that there is no “government” or “state” to protect them from threats such as conflict, poverty, starvation, and a lack of safety, education and health care. In some cases “government” or the “state” oppresses the people. There is a new awareness that in order for these people to achieve survival, dignity, and a livelihood, efforts focused on individuals, namely efforts from the perspective of “human security” are essential. This is a concept in which bottom-up nation-building is advanced not only by protecting each individual human being, but also by further enhancing their capacities and building a strong society.

The threats faced by people are diversifying and becoming more complex due to the advancement of globalization which has freed up the movements of people, goods, capital and information. Issues that cross international borders such as transnational organized crime, particularly weapons and drugs smuggling and human trafficking, terrorism, and infectious diseases such as SARS and HIV/AIDS are becoming more serious, while the increasing sophistication and expansion of economic activities is accelerating global environmental problems such as global warming, destruction of the ozone layer, and energy problems. This worsening of problems that cannot be addressed by one country alone is also a threat to the survival, livelihood, and dignity of individual human beings and the “human security” perspective has become important as a perspective to complement “state security.” It has become necessary to reflect this kind of perspective, which was not seen on the occasion of the formulation of the original ODA Charter, in Japan’s ODA.

7. UNDP, Human Development Report 2003

2. Active ODA Efforts by the Developed Countries

In the second half of the 1990’s, placing human beings at the center of development to prevent the further impoverishment of the poor became shared international goals. The background to this decision was that, largely as stated previously, despite the many years of efforts by the countries of the world, the poverty issue had not been resolved and the fact was that the advancement of globalization had exacerbated it more and more. In particular, in the 1980’s under the leadership of the World Bank and the International Monetary Fund (IMF), many developing countries adopted development methods through structural adjustment policies⁸ reliant on market economy mechanisms, but not only did the structural adjustment policies not proceed well in many developing countries but rather the poverty situation worsened and this forced a shift away from those development methods. Reflecting on the experience in the 1980’s, in the 1990’s, concern about poverty increased and at the 1995 World Summit for Social Development, human-centered social development was targeted and a target of reducing world absolute poverty by half was presented. Following on from this, in the 1996 Development Assistance Committee’s (DAC) New Development Strategy^*1, the International Development Goals (IDGs) were adopted and a target was set to reduce the proportion of people living in extreme poverty by half by 2015. This sequence of events led to the Millennium Development Goals (MDGs), an enhancement and integration of the IDGs, being compiled at the 2000 UN Millennium Summit. The MDGs received wide support from the international community, and efforts to realize them are being increased.

In particular, at the United Nations International Conference on Financing for Development held in Monterrey, Mexico in March 2002, promotion of poverty reduction, sustainable economic growth, and sustainable development were reaffirmed as the shared goals of the world and it was confirmed that the developed countries and developing countries would cooperate in efforts to realize the MDGs.

Before the meeting and at the meeting, in a complete turnaround from the “aid fatigue⁹” phenomenon seen in many countries in the 1990’s, the United States (US), the European Union (EU) countries, Canada and other countries announced increases in ODA due to their awareness that “poverty can become a hotbed of terrorism”, an awareness which was partly prompted by the occurrence of the September 11 terrorist attacks in the US the previous year. And in the Department for International Development (DFID) in the United Kingdom (UK) and the Bundesministerium f�r wirtschaftliche Zusammenarbeit und Entwicklungconomic Cooperation and Development (BMZ) in Germany and other similar agencies around the world, the movement to make poverty reduction a priority ODA issue gained momentum. Japan had been taking measures to deal with the poverty issue for ODA all along, but it has become necessary to further clarify these efforts based on these international trends.

The project to supply equipment and materials to the school “Terre des Hommes” for vocational training for women and literacy and aesthetic education for street children (a grant assistance for grassroots human security project in Côte d’Ivoire)

8. A series of economic reform policies reliant on market economy mechanisms and typically involving currency depreciation measures, austerity policies, a move to a market economy, the liberalization of trade, and the privatization of state-owned companies. They were formulated to bail out developing countries suffering from a sustained international balance of payments crisis due to the two oil shocks in the 1970’s.
9. This refers to the lack of growth in aid disbursements in the 1990’s as the strategic ODA of the Cold War era became less relevant, the fiscal situation of the developed countries as a whole worsened and their economies went into recession. During that period, Japan quantitatively supported world ODA.

3. Emergence of New Providers of Development Assistance and New Assistance Methods

(1) The Diversification of Aid-related Entities including NGOs

As globalization advances, assistance providers have diversified to include not only national governments but also non-governmental organizations (NGOs), local authorities, universities, research institutes, and private companies. Globalization has accelerated the flow of people, goods and capital across national borders and has created a new international environment. The globalization has also brought new development issues as stated previously. As the assistance needs of developing countries diversified, problems emerged that could not be resolved at the state level and a variety of assistance providers became active, each utilizing its individual characteristics. Taking the example of NGOs, actually the number of internationally active NGOs in the world rapidly increased in the 1990’s and had reached 44,000 organizations by 1999¹⁰. Generally, NGOs participating in international cooperation construct global networks and collect detailed information on the recipient country. As a rule they have good knowledge of local conditions and needs and can respond rapidly and flexibly through meticulous grassroots level assistance in close cooperation with the local communities and people in developing countries, and through emergency humanitarian assistance. In this context, they play an extremely important role in the international community. Based on this point, partnership with NGOs is increasing in the planning and implementation of Japan’s ODA policies. Partnership with a variety of assistance providers is getting more necessary for Japan’s ODA to be implemented in an effective, efficient, and swift way.

(2)  Diversification of Aid Modalities

In the 1990’s a variety of discussions were carried out, primarily in the Organisation for Economic Co-operation and Development (OECD)-DAC and the EU countries, on modalities to increase assistance effectiveness. New modalities and approaches such as a shift from project-based assistance to program-based assistance, provision of direct budget support, the introduction of a common fund¹¹ in the African region and the harmonization of assistance procedures all began to be suggested as modalities to increase assistance effectiveness. And in the World Bank, reflecting the fact that the structural adjustment policies actively introduced in the 1980’s did not produce sufficient results, the movement to review those modalities gained momentum in the 1990’s. And along with that, the common understanding of what the goal of development assistance should be shifted from the former goal of “economic growth” centered on economic policies to an approach which tackled “poverty reduction” from a comprehensive perspective including governance, basic education, and health care. The Comprehensive Development Framework (CDF) was proposed in 1999 as a modality to achieve those objectives and in the same year, recipient countries were required to formulate Poverty Reduction Strategy Papers (PRSP) based on the CDF concept. (Details about PRSP).

The distinctive features of these new assistance modalities are participation in the development process on the ground in the recipient country by a variety of assistance providers and more vigorous consultations with a variety of assistance providers on the ground in the recipient country. Because promotion of this kind of assistance on the ground is actually being introduced in developing countries and is expanding, it is predicted that the movement to increase coordination in assistance and procedures between donor countries and international organizations on the ground will become even more vigorous. In response to this, developed countries and international institutions are aiming at measures such as transferring authority to local offices, empowering local personnel and are aiming to ensure rapid and flexible assistance and to ensure its influence in developing countries. It is necessary for Japan to be actively involved in the development plan formulation of recipient countries through frequent participation in meetings held in the recipient country and expression of opinions at those meetings, in addition to traditional bilateral assistance, in order to participate in the assistance coordination processes, such as PRSPs etc. For that reason, it has become essential to develop and to strengthen personnel systems in the recipient country and to construct systems within Japan to support the systems within the recipient country.¹²

These international trends surrounding ODA are also one factor making revision of the ODA Charter necessary.

10. The Union of International Associations, International organizations by year and type 1909–1999. The Union of International Associations is a non-profit body established in Belgium in 1910 which provides information about NGOs’ international activities.
11. A fund to which donor countries and organizations donate some financing for development assistance to special sector assistance. It aims to improve the ownership of the developing country side, to lighten the administrative burden, etc. by utilizing it under the management of the government of the developing country.
12. Strengthening the assistance systems and functions in the recipient country is important not only for aid coordination but also for strengthening policy consultations with developing countries and for building country assistance plans. (Refer for details)