Chapter 2
Outline of the Revised ODA Charter and the Recent Status of Implementation

Summary
Chapter 2, based on the structure of the revised ODA Charter, gives an outline of its philosophy (objectives, basic policies, priority issues, and priority regions), the principle of ODA implementation, the system of formulation and implementation of ODA policies, etc. And along with the explanation, some concrete examples concerning the recent status of implementation are also given.

One of the major goals of the ODA Charter revision was to come up with an answer to the question “why is ODA necessary?” In this regard, as described in the revised ODA Charter, the goal of ODA is “to contribute to the peace and development of the international community and thereby to help ensure Japan’s own security and prosperity.”

Japan has committed itself to utilize ODA to resolve humanitarian issues including poverty and famine and global issues including the environment and water supply, and to take measures for the realization of sustainable growth and peace-building. These measures bring benefits not only for developing countries, but also for Japan itself in various forms: building and sustainment of a peaceful and stable international environment, mounting friendly relations with other countries, and people-to-people exchanges, and strengthening of Japan’s position on the international arena. And for Japan, a country which desires peace, ODA is the most suitable policy for gaining the empathy of the international community.

The basic policy of Japan’s diplomacy is to ensure the security and prosperity of Japan and its people and if ODA, implemented as a part of Japan’s diplomacy, does not contribute to ensuring Japan’s security and prosperity, then it will not gain the understanding and support of the Japanese public. The government intends to increase the strategic value of ODA above its previous level and works to ensure the security and prosperity of Japan through ODA, based on the revised ODA Charter.

The “Basic Policies” consist of five items: (1) supporting self-help efforts of developing countries; (2) the perspective of “human security”; (3) assurance of fairness (impact on the environment and society, the perspective of gender equality, etc.); (4) utilization of Japan’s experience and expertise; and (5) partnership and collaboration with the international community. Of these, the newly added “human security” perspective refers to the concept of paying attention to each individual person and placing importance on protecting and empowering individuals in order to ensure their lives, livelihoods, and dignity. Japan is working to promote the concept and to put it into practice.

The revised ODA Charter makes the “Priority Issues” (1) poverty reduction; (2) sustainable growth; (3) addressing global issues; and (4) peace-building. Concerning poverty reduction, Japan is placing importance on sectors such as education, healthcare and welfare, water and sanitation, and agriculture, which are the essential components of the Millennium Development Goals (MDGs). Japan has fulfilled an active role in peace-building in recent years and this issue has newly been made a priority issue in this ODA Charter revision. Japan is contributing reconstruction assistance and other aid to Iraq, Afghanistan, and Sri Lanka.

The “Priority Region” is Asia, a region with a close relationship with Japan and which can have a major impact on Japan’s stability and prosperity. However, Japan strategically prioritizes assistance to this region, fully taking into account the diversification of the Asian countries’ socio-economic conditions and changes in their respective assistance needs. And making Asia the priority region does not necessarily mean that Japan considers ODA to other regions to be unimportant.

“Formulation and Implementation of ODA Policy” advocates increasing public participation, ensuring unity of the entire government (formulation and revision of medium-term ODA policies and country assistance programs), collaboration both within and outside Japan, in particular, non-governmental organizations (NGOs), strengthening policy consultations with developing countries, strengthening functions of the field missions (Country-based ODA Task Forces, etc.), etc. Concerning increasing public participation, Japan is promoting the broad participation of all sectors of society (the Senior Volunteer Program of Japan International Cooperation Agency (JICA), etc.), human resources development and development research (collaboration with universities and research institutes, etc.), development education, information disclosure and public relations (Monitoring Group of Citizens on Japan’s ODA, etc.).

ODA Photo Studio 1: Overseas students visiting Japan under the Foreign Student Grant Aid Project. The photo shows the students performing an emergency drill (Photo: Japan International Cooperation Center 2004)

 

Key Points
Section 1

• The Charter defines the “objectives” of Japan’s ODA as “to contribute to the peace and development of the international community and thereby to help ensure Japan’s own security and prosperity.”
  • There are many development challenges such as poverty, conflict, terrorism, infectious diseases, environmental problems, gender issues, etc. Making a contribution commensurate with its national strength is a duty of Japan as one of the world’s leading nations
  • As the nations deepen their interdependence, a peaceful and stable international environment is necessary for Japan itself. Such an environment will produce benefits for Japan itself in a number of ways including promoting friendly relations and people-to-people exchanges with other countries, and by strengthening Japan’s standing in the international community
• The “Basic Policies” outline the most important ODA concepts and importance is always placed on them in every stage, from the ODA policy formulation stage to implementation.
• In order to enhance the strategic value of ODA, limited funds should be selectively injected in a prioritized manner in compliance with the “Priority Issues” and “Priority Region.”

Section 2

• The “Principle of ODA Implementation” basically adheres to the “Principles” in the original ODA Charter.
• ODA should be implemented, sufficiently paying attention to the compatibility of the environment conservation and development, avoidance of use of ODA for military applications, trends in the development of weapons of mass destruction (WMD), military expenditure and the import and export of arms, efforts toward democratization, human rights, and the introduction of a market-oriented economy, etc., and comprehensively taking into account developing countries’ need for assistance and socio-economic conditions, and Japan’s bilateral relations, etc.

Section 3

• In conformity with the results and direction of ODA reform, the government should ensure the unity and coherence of the entire government and promote collaboration with aid-related entities both within and outside Japan, in particular NGOs, policy consultations with developing countries, strengthening functions of field missions and increased public participation

Chapter 1 explained the background to the review of the ODA Charter and the process and major points of the review. Chapter 2 gives an outline of the revised ODA Charter based on its structure.

Section 1. Principles

One major focus of the current ODA Charter revision is to present an easy-to-understand answer to the question “why is ODA necessary?” In “Principles,” the revised ODA Charter organizes and explains the three issues of why ODA is provided (“Objectives”), how it is implemented (“Basic Policies”), and where it is implemented (“Priority Issues” and “Priority Region”), as shown below. An outline of each item is given below.

1. “Objectives”—Why does Japan Provide ODA?—

The revised ODA Charter defines the objective of ODA as “to contribute to the peace and development of the international community and thereby to help ensure Japan’s own security and prosperity.” The international definition of ODA states that “it is administered with the promotion of the economic development and welfare of developing countries as its main objective,” but as stated below, for Japan to take the lead in efforts to resolve issues shared by the international community such as humanitarian issues, global issues, conflicts and terrorism, is necessary for a variety of reasons.

The Mounting Challenges of the International Community and ODA

In today’s world, primarily in developing countries, there are more than 1.2 billion people living in absolute poverty, defined as living on less than $1 a day, and nearly 800 million people are facing starvation¹³. In particular, since the end of the Cold War, as globalization advanced, the international community presently finds itself in a new environment, grappling with a multiplicity of problems such as the gap between the rich and the poor, ethnic and religious conflicts, armed conflicts, terrorism, suppression of freedom, human rights and democracy, environmental problems, infectious diseases, and gender issues. Specifically, there is a lot of work to be done on humanitarian issues such as the worsening of poverty issues, an increase in the number of refugees and displaced persons and disasters, global issues such as those related to the environment, water and infectious diseases, frequently-occurring conflicts and terrorism, and peace-building. There is a danger that not only developing countries, but also the entire international community including developed countries can be thrown into a crisis that transcends national borders and continents. To postpone resolution of these issues will mean leaving a large burden for future generations. For example, these burdens include the worsening of the global environment with such problems as acid rain and global warming, the possibility that countries suffering from poverty and without good governance will become hotbeds of terrorism, the continuing large income disparity between Japan and its neighboring countries inviting an international labor migration and that becoming a major factor in the increase of illegal immigrants coming to Japan, and so on. Taking measures to deal with these issues is certainly not somebody else’s problem; these are issues for us, ourselves. The trend is for expectations and demands for ODA to increase and diversify in order to deal with these issues.

Japan’s Duty as a Major Country of the World and ODA

Japan is making use of its experience as the first developed country in Asia to actively provide assistance through ODA for the construction of economic and social foundations, human resources development, and systems building. Thus, Japan has made a large contribution to the development of the economies and societies of developing countries, particularly in East Asia. Although, the ODA budget has been in decline for the last few years due to the current severe economic and fiscal situation, Japan must continue its contribution in tackling international problems as much as possible. After the Second World War, Japan achieved post-war reconstruction and laid the foundations of its current prosperity with support from the United States (US) and the World Bank, and it has come to occupy an important position in the international community as the number two economic power in the world and one of the G8 Summit members. Therefore, Japan, as a member of the international community as well as a developed country, is aware of its responsibility to make contributions commensurate with its national power to tackling humanitarian issues including extreme poverty, global issues including the environment, peace-building, democratization and the securing of human rights. At the same time, it cannot be negligible that the international community set its hopes on Japan as a major economic and political power. In the international community, the developed countries made a commitment to work to allocate 0.7% of their gross domestic product (GDP) to ODA in the “Second United Nations Development Decade” of the 1970s. As explained in Chapter 1, Japan is the number two donor country in the world in terms of total value, however, Japan is the 18^th in terms of ODA/GNI ratio and is the 9^th in terms of per capita ODA expenditure, so the international community continues to lay large expectations of Japan.

The Advancement of Interdependence and ODA

For Japan, which depends on trade and investment with the other countries of the world for its livelihood, a peaceful and stable international environment is essential in order to ensure its own survival and prosperity. For example, Japan is dependent on supplies from overseas for about 80% of its energy, which provides the basis for the economic activities and livelihoods of the people and Japan’s food self-sufficiency ratio is declining every year, with the self-sufficiency rate on a supplied calorie basis currently at 41%¹⁴. On the other hand, Japanese companies have developed a network of branch offices and affiliated companies throughout the world and there were 12,476 overseas subsidiaries of Japanese companies by the end of 2001¹⁵. Japan’s foreign direct investment (FDI) was about $19.6 billion in 1980, but by 2000 it had increased to $280 billion, about 14 times the 1980 figure¹⁶. And the number of Japanese traveling overseas has also increased year by year, reaching 17.9 million in 2000¹⁷.

This kind of interdependence is advancing equally in both developed and developing countries, and among them the interdependent relations of the Asian countries are becoming closer in a variety of respects such as political, economic and social, due to historical and geographical factors. For example, looking at Japan’s trade by continent, about 50% is with Asia, much more than the 30.3% with second-placed North America. The total value of trade within the East Asian region, to which Japan belongs, increased 2.1 times between 1991 and 2000. It is not only expanding at a higher rate than the world rate (1.8 times), but is getting qualitatively closer¹⁸. Recently efforts toward strengthening economic partnership have also been advanced in East Asia and Japan has concluded the Japan-Singapore Economic Partnership Agreement (enacted November 2002) and has also actively worked on negotiations and consultations for economic partnership agreements with the Republic of Korea (ROK) and the Association of Southeast Asian Nations (ASEAN) while keeping in mind the goal of eventually realizing economic partnership for the whole of East Asia. In its relations with these countries, Japan is building partnerships in a wide range of fields including political dialogue and security, and not only the economic field.

In addition to the Asian region, Japan is also deeply involved in other regions such as the Middle East and Africa. Japan imports 88% of its crude oil, Japan’s leading energy source, from the Middle East region¹⁹ and the stability of that region ensures a stable oil supply for Japan. Africa is important as a supplier of mineral resources and natural resources such as cacao beans, manganese ore, and platinum and is also important as an export market for Japan’s industrial products. As interdependence deepens, more vigorous trade and investment by developing countries not only contributes to the economic development of developing countries, but is also is very important to Japan, which enjoys the benefits of international trade.

The influence of developing countries, including African and Latin American countries, in the process of making international rules is growing in discussion forums such as the United Nations (UN) and the World Trade Organization (WTO) and the partnership of Japan with the other countries of the world is becoming more important. There are issues such as conflicts, infectious diseases, environmental destruction and poverty which begin in a certain region or country but which can have an impact on the entire international community including Japan. For example, there are the conflicts in Afghanistan and Iraq, the Severe Acute Respiratory Syndrome (SARS) outbreak seen in 2003, acid rain, and the growth of the hole in the ozone layer.

For Japan, which is so interdependent with other countries, a peaceful and stable international environment is essential, so Japan must actively build and maintain such an environment through various measures. From this perspective, for Japan to use ODA to deal with the various development issues and global issues of developing countries and to contribute to the economic development of developing countries will lead to the building and maintenance of a peaceful and stable international environment and that is also necessary for Japan itself.

The Asian currency and financial crisis which began in July 1997 had a serious socio-economic impact on those countries but it did not end there. There were concerns that it would have a big impact on the entire world economy including Japan. First, Japan provided an appropriate level of assistance to the countries affected by the crisis in the form of public funds cooperation for the large-scale international aid package decided under the leadership of the International Monetary Fund (IMF). In 1998, Japan announced the New Miyazawa Initiative and provided funding support of $15 billion for the establishment of a special yen loans system to act as medium-term funding support for the recovery of the real economy of the Asian countries, etc., and $15 billion as a reserve fund in case short-term funding needs arose in the process of advancing economic reforms in these countries. Japan provided this assistance to ROK, Thailand, Malaysia, the Philippines, Indonesia, and Viet Nam through partnership between ODA and Other Official Flows (OOF)²⁰, provided assistance for the socially vulnerable, financing for economic reconstruction and social sectors, etc., and made a large contribution to containing the impact of the crisis. Assistance from Japan through a variety of channels is one stabilizing factor and the stability of the Asian region has gradually been restored.

Japan as a Country which Aspires Peace and ODA

The revised ODA Charter states that for Japan, as a country which aspires peace, to actively provide support for development of developing countries through ODA and to manifest this posture both at home and abroad is “the most suitable policy for gaining sympathy and support from the international community for Japan’s position,” and concludes its explanation of the objective of ODA with the statement that “Japan’s ODA will continue to play an important role in the years to come.”

The preamble to the Constitution of Japan states that “we, the Japanese people, desire peace for all time” and expresses a determination by the Japanese people to “preserve our security and existence, trusting in the justice and faith of the peace-loving peoples of the world,” and that “We recognize that all peoples of the world have the right to live in peace, free from fear and want,” and that “We desire to occupy an honored place in � international society.” And Article 1 of the UN Charter stipulates that UN purposes are “To maintain international peace and security,” and “To achieve international co-operation in solving international problems of an economic, social, cultural, or humanitarian character.” After the Second World War, Japan established the pursuit of peace among the foundations of the nation, so it must contribute to world peace and prosperity in accordance with the intention expressed in the Constitution of Japan and with the spirit of the UN Charter. And it can be said that this is exactly the path that Japan has followed so far.

Actively providing development assistance to developing countries through ODA and expressing Japan’s sincere desire for peace both at home and abroad, as stated in the ODA Charter, is “the most suitable policy for gaining sympathy and support from the international community for Japan’s position.” It is necessary for Japan to continue to utilize ODA and to advance international cooperation.

Ensuring the Security and Prosperity of Japan and ODA

The necessity for ODA has already been presented from a number of angles. Japan is fulfilling a leadership role in its efforts to build an international order suitable for the 21^st century through utilizing ODA in the development issues of developing countries and in global issues, and thus it contributes to the harmonious and reciprocal development of the international community and leads to assurance of the deep trust of the international community in Japan, which leads to assurance of the security and prosperity of Japan. In the revised ODA Charter, it is mentioned that “such efforts are not only beneficial for developing countries; they will in turn benefit Japan itself in a number of ways including by promoting friendly relations and people-to-people exchanges with other countries, and by strengthening Japan’s position in the international arena.” Currently, Japan is providing ODA to 145 countries and regions (2002 disbursements) and the number of friends of Japan is steadily increasing throughout the world due to the international contribution called ODA. This does not only mean that friendly relations between states are being enhanced. With the fact that assistance providers are diversifying, ODA is also useful in increasing friendly relations between individual people, based on trusting relationships at the grassroots level. The increase in friendly relations of this kind also leads to a strengthening of Japan’s position and influence in the UN and other international organizations where developing countries make up the majority.

Despite the fact that it coincided with the UN General Assembly Session, the Third Tokyo International Conference on African Development (TICAD III) held in Tokyo from September to October 2003 enjoyed the participation of a large number of African heads of state and government and ministerial-level delegates. TICAD III played a key role as one of the largest international policy forums on global cooperation for African development. The trust and gratitude expressed by the African participants throughout the conference reflect the profound appreciation by African countries of Japan’s contributions to the development of Africa to date.

As stated in Chapter 1, ODA by definition is something used to develop developing countries and improve their welfare. Naturally, ODA must of course be used for developing countries. However, as already stated from a variety of perspectives, assistance for the development of developing countries is not merely beneficial for developing countries; it is also deeply connected to benefits for Japan itself. Therefore, assistance for the development of developing countries, in that sense, is also for the national interest of Japan. ODA is a part of Japan’s foreign policy, and therefore, policy coordination is needed. In the principles of the ODA Charter, there are a few factors for Japan that must be taken into account when implementing ODA, but this does not mean that when Japan carries out ODA, it should only consider the development issues and needs of the recipient country. Japan also takes into consideration factors such as the military expenditure of the developing country in question, trends concerning WMD etc., democratization, efforts to introduce a market economy, to what extent fundamental human rights and freedom are guaranteed, and the status of general bilateral relations. Therefore, ODA is provided after comprehensive consideration and assessment of such various factors. Essentially the basic principle of Japan’s diplomacy is to ensure the security and prosperity of Japan and its people. If ODA, as a part of Japan’s diplomacy, does not contribute to the security and prosperity of Japan, then it cannot gain the understanding or support of the Japanese public. In order to gain the understanding and support of the Japanese public regarding ODA, it is necessary to carefully explain how ODA contributes to development issues in developing countries and also to the peace and development of the international community, and thus, it contributes to ensuring the security and prosperity of Japan. Japan, under the revised ODA Charter, intends to increase the strategic value of ODA and work to ensure the security and prosperity of Japan through ODA.

13. UNDP, Human Development Report 2003
14. Ministry of Agriculture, Forestry and Fisheries “Food Balance Sheet”
15. Ministry of Economy, Trade and Industry “Survey on Overseas Business Activities”
16. “World Investment Report 2003” UNCTAD
17. “Sekai no Tokei 2003 (World Statistics 2003)” Statistics Bureau, Ministry of Public Management, Home Affairs, Posts and Telecommunications, page 50
18. White Paper on International Economy and Trade Japan 2003
19. White Paper on International Economy and Trade Japan 2003
20. Non-ODA economic cooperation for developing countries using government funds. Specifically, this refers to Japan Bank for International Cooperation (JBIC) financing for private sector export credits and direct investments, and purchases of World Bank bonds by the Bank of Japan.