Section 3. Positive Expansion of Economic Cooperation
1. Expansion of Economic Cooperation as the Responsibility of an Economic Power
(1) The world economic stagnation triggered by the second oil crisis still continues and the difficulties facing developing countries such as accumulation of debts are increasing. Under the circumstances, Japan, the second largest economic power in the Free World, has an increasingly important role to play. Acting on the basic ideals of "interdependence" and "humanitarian consideration," Japan decided to increase official development assistance (ODA) through a new medium-term target (setting the aggregate ODA for the five-year period from 1981 to 1985 at $21.4 billion at the least) and has continued its efforts to improve economic cooperation both in quantity and in quality and to make it more effective.
(2) Referring to the basic policy of Japan's economic cooperation, Prime Minister Yasuhiro Nakasone, in his policy speech to the 98th Diet session, said that in order to solve fundamentally the difficulties confronting the world economy, it was necessary to vitalize and steadily expand the world economy, that the growth of developing countries was essential to the balanced development of the world economy and that it was necessary for Japan to "further promote economic and technical cooperation under the new medium-term target".
(3) In his foreign policy speech at the same Diet session, Foreign Minister Shintaro Abe said that Japan, which has particularly close interdependent relations with developing countries, has the international responsibility of expanding official development assistance and that such contribution toward peace and stability of the world serves long-term national interests, and announced Japan's determination to continue its efforts to "expand official development assistance steadily" under the new medium-term target and to "bolster assistance to those areas which are important for the maintenance of world peace and stability."
2. Actual Expenditure in 1982 and Budget for FY1983
(1) Japan's ODA in fiscal 1982 (on a net disbursement basis) increased in terms of the yen by 7.7% over the previous year to \752.9 billion but declined in terms of the U.S. dollar by 4.7% to $3,023 million. This was due partly to the yen's fallen exchange rate. While Japan's bilateral ODA grew steadily (up 18.3% on a yen base and up 4.7% on a dollar base over the previous year) as a result of an increase in yen credits, its ODA to international organizations declined (down 18.7% on a yen base and down 28.0% on a dollar base) for two consecutive years because of decreased contributions to international financial institutions. Japan has earned a good international reputation for its policy of expanding assistance under the new medium-term target. It is expected that Japan's bilateral ODA will continue its steady growth and that further progress will be made in negotiations for increase in contributions to international financial institutions.
(2) The ODA budget for FY1983 was drawn up with special consideration for the new medium-term target despite the severe financial situation, and an increase of 8.9% over the previous year to \481.3 billion in the general account budget was approved. This substantive increase was indicative of Japan's positive attitude toward assistance, in view of the fact that the total expenditure for the general account was cat by \500 million from the previous year. The total ODA budget amounted to \967.8 billion (0.34% of GNP), up 2.8% over the previous year. In the FY1983 budget, the appropriation for economic cooperation under the jurisdiction of the Ministry of Foreign Affairs totaled \258.5 billion and the appropriation for the Ministry's ODA in the general account totaled \232.4 billion (up 10.8% over the previous year). Apart from enhancing the overall quality and quantity of ODA, the FY1983 budget was also aimed at (a) bolstering aid for basic human needs, (b) expanding aid for the development of human resources and (c) implementing effective aid. Efforts were also made to expand grant aid and technical cooperation by the Japan International Cooperation Agency (JICA). In the FY1982 budget for bilateral economic cooperation under the Ministry of Foreign Affairs, \99 billion (up 7.6% over the previous year) was appropriated for economic development assistance, \77 billion (up 8.2%) for JICA and \80.7 billion (up 6.6%) for shares in and contributions to international organizations.
3. Promoting Dialogue Among Developed Countries
(1) The OECD's Ministerial Council meeting (in May) and the Versailles Summit (in June) were major occasions in 1982 for discussion among developed countries on their overall political and economic policies including aid policies. At these international conferences, Japan emphasized its efforts to bolster aid despite its severe financial condition and also the necessity of "promoting aid for world peace and stability".
At the Versailles Summit, the then Prime Minister Zenko Suzuki explained Japan's basic aid policy at the beginning of his speech. The statement issued after the Summit stated clearly that "The growth of the developing countries and the deepening of a constructive relationship with them are vital for the political and economic well-being of the whole world." And referred to the necessity of "sharing responsibilities among developed countries."
(2) In 1982, the OECD's Development Assistance Committee (DAC) played an important role in the discussions on aid philosophies and policies by its members (17 developed countries including Japan and the U.S., and the EC Commission). Topics included mixed loans, non-project aid, ways to promote the exports of low-income nations, aid for developing human resources and the importance of environmental protection in aid. Japan is exerting efforts to improve the quality of its assistance while taking into consideration the international trends made clear through the discussion on these matters.
(3) It is important to hold not only multilateral conferences like the ones mentioned above, at which major developed nations meet together, but also bilateral discussions between Japan and other developed, aid-giving nations for more intensive exchange of opinions, with a view to using aid funds effectively and making adjustments for implementing effective aid policies. For instance, Japan-U.S. Aid Policy Consultation shave been held regularly since 1978. At the third consultation held in Tokyo in February 1982, with the Administrator of the United States Agency for International Development (AID) attending, aid policies in general and Japan-U.S. "joint projects" such as school education in Tonga and cooperation in agriculture in Thailand were discussed and studied.
At the semi-annual high-level conferences between Japan and the EC, various aid policies were discussed at separate sessions and the possibility of giving shape to "Japan-EC joint projects" was studied.
The first Japan-U.K. Aid Policy Consultation was held in Tokyo in July with Deputy Administrator Harrel of the Overseas Development Agency (ODA) of the U.K. in attendance, and the second meeting in London in October. Japan also held the first Japan-Australia Aid Policy Consultation in Tokyo in July, which was attended by Deputy Administrator Campbell of the Australian Development Assistance Bureau (ADAB). At the Japan-Canada Foreign Ministers' Conference in October, the foreign ministers of the two nations agreed to inaugurate Japan-Canada Aid Policy Consultations.
(4) Japan's efforts to expand aid and increase its effectiveness while coordinating through intensive exchange of opinions with other advanced countries met positive response from the latter including the U.S. The positive aid policy of Japan has been viewed as evidence of Japan's willingness to fulfill its global responsibilities commensurate with its economic strength and also as one which would broaden and enhance cooperative relations among developed countries.
4. Promoting Aid for Peace and Stability
Japan extends economic cooperation toward developing countries for the purpose of assisting their economic and social development, and stabilizing the livelihood and improving the welfare of their people thereby helping to enhance the political, economic and social resilience of these countries and, thus, contributing to world peace and stability. With this in mind, Japan announced in the Japan-U.S. Joint Statement issued in May 1981 its intention to bolster its assistance to "those areas which are important for the maintenance of world peace and stability". Since then, Japan has stepped up aid to such countries as the ASEAN five, countries bordering conflict areas (Thailand, Pakistan and Turkey), Egypt, Sudan, Somalia, and Jamaica in accordance with its basic aid philosophy and on its own judgment.
5. Aid to Meet the Expectations of Developing Countries
(1) Japan's ODA, whose purpose is to assist developing countries in their economic and social development and to help stabilize the people's livelihood and improve their welfare, is greatly appreciated by the recipient countries. In the severe economic situation of the world in recent years, Japan's aid is regarded with great expectation and confidence.
1982 and early 1983 saw active summit diplomacy between Japan and developing countries, as shown by the visit to Japan of Kenyan President Daniel Arap Moi (April), Chinese Premier Zhao Ziyang (June) and Malaysian Premier Mohamad Mahathir (January 1983) and also by then Japanese Prime Minister Susuki's visit to Peru and Brazil (June) and incumbent Prime Minister Nakasone's visit to the Republic of Korea (January 1983). These countries expressed deep appreciation of Japan's economic cooperation and also their expectations of its continuance and expansion, as referred to in the joint statements.
(2) With her own financial situation in a severe state, it is essential that Japan implement its aid undertakings effectively and efficiently for the best possible use of limited funds to meet the needs of developing countries and also to expand aid to meet their expectations. Accordingly, it is important to make a thorough appraisal of proposed aid projects and screen them prior to their implementation, through diplomatic missions abroad or by dispatching survey missions. After aid project shave been implemented, it is important to conduct follow-up surveys and evaluate the results of aid so as to identify and determine what should be improved in the future. The Ministry of Foreign Affairs has stepped up the activities of the Economic Cooperation Evaluation Committee established in January 1981 for the purpose of bringing together the various evaluation activities. Japan gives special importance to the "policy dialogue" element in aid group meetings and annual consultations with developing nations, and tries to have the results of the dialogue reflected in its aid policy while encouraging recipient countries to introduce appropriate economic measures.