Re-Thinking the ODA Philosophy : The Clarification of Diplomatic Strategy

ABSTRACT

Though Official Development Assistance (ODA) is necessitated by the imbalance of economic development amongst countries, it can also be seen as a transnational money flow. Thus, while it has the primary purpose of economic and humanitarian aid, it also has important strategic and diplomatic dimensions as well.

For the receiving country, the aid becomes a stimulus for economic development that will help strengthen the infrastructural deficiencies - e.g. electricity and transportation - that stifle its economic development. It is believed that such support will help economically lagging countries catch up to other developed countries and thereby narrow the economic gap that exists amongst the world's nations. For the donor countries, the aid is not just about supporting the economic development of developing countries. Also referred to as "strategic economic aid," this type of support is also aimed at improving the donor country's influence and authority abroad.

With the collapse of the Soviet Union and the unification of Germany in the 80's, the global focus shifted from the East-West divide of the Cold War to the North-South divide of developed and developing nations as the economic difference between these countries emerged and deepened. Amidst the globalization of today's economies, the issue of underdevelopment has worsened with the accumulation of such problems as destitution, dearth, environmental pollution, health, and global warming. The economic aid of developed countries has been necessary to help developing countries overcome these problems.

Japan's economic aid toward China began under this context. In December of 1979, Japan announced that it would begin providing China with governmental support for development (ODA). The purpose of Japan's policy toward China was to support the modernization of its physical infrastructure, to encourage the reform and liberalization of its policies, and to establish political and economic relations between China and Japan. More generally, it was also meant to give special attention, within in its overall ODA initiative, to a country that turned down its rights to war reparations. Among Japan's bilateral ODA projects, the projects in China had been the most important. However, toward the end of the 1990s, the international climate began to change. Japan-China relations entered a new phase and Japan's ODA policy toward China was re-evaluated.

Japan's long-term stagnation is causing its economic support programs for foreign countries, including its economic cooperation with China, to downsize. Though Japan has reigned for many years as the world leader in foreign directed economic support, it relinquished this position to the US in 2001. According to Ken'ichi ?no, "It may not be so important for Japan to cling to the glory of being the world's largest donor when its struggling with its own recession." Nevertheless, many urge Japan to maintain its ODA so as to avoid a decline in its diplomatic influence.

Meanwhile, the upturn in the Chinese economy as well as its military buildup has spurred proposals in the Japanese government for large cuts in ODA toward China. It is natural with regard to any developing country that ODA should be gradually reduced as the economy develops. However, if the reason for these cutbacks has more to do with a perceived threat within the economic development, such a step will bring about a large setback in Japan-China relations going forward.