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Japan's Growing Leadership in Global Development
- SAIS Review
- Johns Hopkins University Press
- Volume 14, Number 1, Winter-Spring 1994
- pp. 101-118
- 10.1353/sais.1994.0000
- Article
- Additional Information
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JAPANS GROWING LEADERSHIP IN GLOBAL DEVELOPMENT CarlJ. Green Japan's latestfive-year budgetforforeign assistance, announced inJune 1993, marks an important transition in international affairs. An aid recipient diree decades ago, Japan is about to take a decisive lead over die United States as die world's largest donor. During the last five years, Japan and the United States shared leadership widi annual official development assistance (oda) expenditures of roughly $1 1 billion each. But Japan's newly announced budget of $70-75 billion over the next five years (averaging as much as $15 billion per year) represents a 50 percent increase over its previous five-year budget. U.S. foreign aid audiorizations, on die odier hand, are on a downward course, decreasing from $14 billion in FYl993 to $1 3 billion in FYl994.' In addition to die new ODA budget, Japan has also announced a "Funds for Development Initiative," under which it will provide developing countries Export-Import Bank loans, international trade insurance, and odier aid not within the definition of oda,2 amounting to an additional $50 billion over the five-year 1 The $14 billion figure does not include the special $12.3 billion IMF Replenishment provided in FYl 993. - ODA includes financial flows (grants and loans) to specified developing countries that are (a) undertaken by the official sector, (b) with promotion of economic development or welfare as main objectives, and (c) at concessional financial terms (if a loan, at least 25 percent grant element). ODA does not currently include assistance to Russia or Eastern European countries. Organisation for Economic Cooperation and Development (OECD), Development Cooperation (Paris: OECD, 1992). Carl J. Green is a senior fellow ofthe Overseas Development Council and director of its Program for U.S-Japan Development Cooperation. He is a member of the faculty of Georgetown University Law Center, whete he teaches in the field ofinternational law. Mr. Green serval as the Ford Foundation's representative in Japan in die nineteen seventies. 101 102 SAIS Review WINTER-SPRING 1994 period. These funds, to be provided on an "untied" basis (in odier words, diey can be used for procurement of goods and services from any source), will be used for economic infrastructure, die environment, and odier purposes closely related to Japan's oda program. Together widi ODA, die Funds for Development Initiative will bring Japan's untied assistance to developing countries to die level ofapproximately $125 billion over die next five years. It would be hasty to conclude diat Japan has made a dramatic bid to assume oda leadership. A large part of the dollar-value increase in aid is attributable to recent appreciation ofthe yen. Moreover, Japan's oda expenditures are not especially impressive as a percentage of gross national product The 0.30 percent share of Japan's GNP devoted to oda in 1992 was slighdy below die 0.33 percent average for members of die oecd's Development Assistance Committee (dac). This figure is unlikely to change significandy under die new budget, assuming diat die Japanese economy returns to a reasonable rate ofgrowth. Butwidi die United States and odier dac countries suffering from advanced stages of "aid fatigue" (America's 1992 oda contribution was a dismal 0.20 percent ofgnp), even a relatively modest five-year effort will put Japan far in front of all DAC members in total ODA volume. Is Japan prepared to be die global leader in oda? Psychologically, die Japanese appear to be quite ambivalent about die prospect There are clearly some advantages. Through oda, Japan has become far more influential in world affairs, widi a voice heard not only throughout Asia but increasingly in Latin America and Africa as well. As a Foreign Ministry official recendy noted, die number of heads of state, ministers, and other leaders visiting Japan from developing countries doubled from 1988 to 1991.3 Japan has also gained greater stature in multilateral organizations, as reflected in U.S. sponsorship of Japan's bid for a permanent seat on the UN Security Council. On die other hand, Japan increased its influence in world affairs while sharing top donor status widi the Unita! States. Despite frustrations over some policy differences, there is no indication diat...