Press Conferences

Mr. YOSHIDA Tomoyuki, Press Secretary: I would like to report on one issue in my opening remarks.

It is related to what was pointed out in the Fiscal System Council of the Ministry of Finance (MOF) on October 20 regarding funds for ODA grant aid projects implemented by JICA.

The funds for ODA grant aid implemented by JICA are issued from MOFA to JICA and then managed by JICA until they are paid to the government concerned. These funds are called “pre-payment funds.” The Fiscal System Council pointed out that the total of these funds reached about 196 billion yen at the end of FY2020.

I believe that materials have been distributed to you. I will explain their content. About 60% of the 196 billion yen, or about 121.5 billion yen, was for projects that have been completed but are awaiting final inspections on flaws to be finished. These funds are being managed by JICA on a project basis extending over the fiscal years until the end of the inspections on flaws.

On the other hand, 40% of the 196 billion yen, or about 7.44 billion yen, comprises funds being managed by JICA beyond the presumed period due to project delays caused by various circumstances unique to the developing countries they were to be conducted in, including the novel coronavirus, political instability, and losing tenders.

For about 80% of the projects accounting for about 7.44 billion yen in funds being managed by JICA due to project delays and other such reasons, construction has already been completed and they are awaiting the investigations on flaws to be finished, or their construction is in progress toward being completed.

That is the current situation. However, it was pointed out by the Fiscal System Council, therefore, in order to decrease and optimize the long-term stagnation of pre-payment funds due to project delays at JICA, first we would like to swiftly take measures that can be taken.

In principle, we will consider termination of firstly projects for which there is no conclusion of an exchange of notes between the governments by the end of the fiscal year following that of the Cabinet decision and no conclusion of a grant contract between JICA and the government of the country receiving assistance, as well as secondly projects that have been suspended for a long time, five years have passed since the Cabinet decision, and their specific end is not foreseen. Additionally, there will be consultations with the governments of the countries receiving assistance.

There is also a deadline for the funds’ provision stipulated by grant contracts concluded between JICA and the government concerned. For projects that have gone beyond the deadline, a review will be strictly conducted on the necessity of extending the deadline, and consideration will be given including discontinuing the project and the possibility of returning the funds to the national treasury.

The reform measures I just mentioned will be applied not only to projects that will be newly implemented but also to projects currently being implemented. Comprehensive checks will be done for all projects currently being implemented.

In addition, before projects are implemented, a written explanation will be provided to the governments of the countries receiving assistance regarding these new policies and so that we could gain their understanding.

By taking these new reform measures, we aim to firstly reduce by about 10 billion yen the number of pre-payment funds managed by JICA arising through project delays.

Furthermore, although there are of course people concerned in Japan who feel tense, we hope that the people concerned from governments receiving assistance will have greater awareness of the issues regarding swift and seamless implementation of projects and that this will lead to effective and efficient implementation of grant aid.

Based on what was pointed out in the Fiscal System Council, regarding reform measures to decrease pre-payment funds and efficiently utilize public funds, we will continue consultations with the implementing organization JICA as well as the financial authorities. That is all for me to report.

Nikkei Shimbun, Mizorogi: Concerning the pre-payment funds you just introduced, when did the amounts shown in (2) and (3) of the figure begin to increase? I believe they have been steadily increasing. Could you please give a simple introduction of when the amounts began to increase and what they were like in the past?

Press Secretary Yoshida: By (2) and (3), you mean what are shown in the figure?

Nikkei Shimbun, Mizorogi: Yes. I believe that the 74.4 billion yen is the total of (2) and (3). I believe that what MOFA views as a problem as you have raised now is (2) and (3). What was this like in the past?

Press Secretary Yoshida: I do not have the specific data from the past now, so I would like to request you inquire with the department in charge if needed. Pre-payment funds for grant aid have indeed been steadily accumulating. I mentioned earlier that it was pointed out that the funds have reached 196 billion yen overall. The overall amount has been steadily increasing since at least a decade ago. In addition, it can be said that it has been on an increasing trend.

On the other hand, about the 74.4 billion yen corresponding to (2) and (3) that you pointed out and particularly the stagnation of problematic projects, we will carefully investigate this. Each project has different reasons why it is stagnating or delayed. As I stated before, some projects stopped due to the novel coronavirus, but most of the projects that were stopped due to the novel coronavirus have been restarted now.

There are also reasons such as political instability and worsening public safety, with differences according to the situation in various countries at the time. I believe it can be said that this has been on an increasing trend in recent years.

Nikkei Shimbun, Mizorogi: I would like to ask another question. The MOF’s Fiscal System Council recently pointed out the 196 billion yen, but is it correct to understand that before this was pointed out, MOFA had been thinking that it needs to coordinate some kind of countermeasures at some point in time against the part corresponding to (2) and (3)? Please give us an explanation regarding the circumstances.

Press Secretary Yoshida: We have conducted consideration and announced the reform measures due to what the Fiscal System Council pointed out this time, but we have been aware of such trends even before. We had been aware that we must of course implement grant aid smoothly and seamlessly and utilize this capital efficiently as it comes from taxes and public funds. We had been engaged in various forms of consideration with the implementing organization JICA.

Given what was pointed out this time and based on our consideration up until now, we have decided to take new reform measures.

Hokkaido Shimbun, Furuta: I would like to confirm about the JICA case. Please clarify whether this review is being conducted for the first time, and whether it began because the problem was pointed out by the Fiscal System Council.

Press Secretary Yoshida: It is fine to understand that the reform measures this time have been newly coordinated. We have of course always responded to each project by efficiently executing them in areas receiving assistance from the governments of the countries concerned and identifying problems with close cooperation between JICA and MOFA. But this is the first time we are implementing reform measures for all projects and engaging in discussions with the governments of countries receiving assistance.

You also asked about what led to the reform measures themselves. Firstly, as I responded to the previous question, we have been aware of the problems even before. Amidst this situation, the Fiscal System Council pointed out some problems. MOFA and JICA wanted to indicate that they will fully respond to these problems or strengthen their response, and thus made this announcement on the reform measures.

TV Asahi, Sawai: I would like to ask about Afghanistan. A press release was issued recently that Ambassador Okada was visiting Afghanistan for the first time yesterday. There are reports that he conveyed that the Japanese embassy, which has been temporarily closed, will reopen if the Taliban ensures safety. Please tell us whether that is true and the future outlook.

Press Secretary Yoshida: Firstly, although I believe you are already aware of this since you mentioned the press release, from November 21-24 local time, Ambassador to Afghanistan Okada visited Kabul and held working-level consultations with senior members of the Taliban. He held talks with the Taliban senior members including Mullah Abdul Ghani Baradar and Abdul Kabir, who are respectively the acting first Deputy Prime Minister and the acting third Deputy Prime Minister according to the Taliban’s press release. Ambassador Okada pressed them on ensuring the safety of Japanese nationals, local staff members, and others staying in Afghanistan, and realizing the swift and safe departure of people who wish to leave the country. He also urged them regarding ensuring humanitarian access and the safety of aid workers, respecting the rights of all people including women and minorities, building an inclusive political system, and preventing Afghanistan from becoming a hotbed of terrorism.

Ambassador Okada also held talks with former President Hamid Karzai, former Chairman of the High Council for National Reconciliation Abdullah Abdullah, and people related to the United Nations, and exchanged views regarding the situation in Afghanistan.

I would like to refrain from giving any more details about the discussions concerning Ambassador Okada’s visit to Kabul given the nature of the discussions and since I cannot deny the possibility that it could affect the assurance of safety and security situation of Japanese nationals and local staff who still wish to leave Afghanistan. About your question about the outlook on the reopening of the Japanese embassy, we believe we need to continue to monitor the situation, so we do not have a specific plan to reopen the embassy at this point.