The future of Japan’s ODA: defining donor identity in a crowded marketplace
Alina Rocha Menocal - Research Fellow, Politics and Governance, ODI and lead researcher and manager of the first phase of ‘The Future of Japan’s ODA’ project
Dr Keiichi Tsunekawa - Professor and previous Director Japan Ineternational Cooperation Agency Research Institute (JICA-RI)
Penelope Jackson - Policy Analyst, Peer Review, Development Cooperation Directorate, OECD
Debbie Warrener - Ex Policy Advisor, Donor Relations, DfID
Edward Hedger - Research Fellow, ODI
Chair: Edward Hedger, Research Fellow, Centre for Aid and Public Expenditure, ODI opened the event by welcoming guest speakers and framing the discussion in the larger context on aid effectiveness and the run-up to the Fourth High Level Forum on Aid Effectiveness in Busan.
1st Speaker: Alina Rocha Menocal, Research Fellow, Politics and Governance, ODI
The first speaker presented a summary of findings from the report, “Informing the future of Japan’s ODA,” on the history and evolution of Japan’s ODA to date, which she and other ODI researchers had recently completed for JICA (the presentation and the full report are available online in the ODI website) . The primary focus of the report is to identify the added value of Japan’s development model compared with other major donors.
In her overview of Japan’s ODA, the speaker highlighted that Japan has a distinct model of development rooted in its own history and impressive transformation from a poor and aid dependent country to one of the largest world economies and a leading donor. Several key factors have influenced Japan’s ODA:
1. Emphasis on commercial and diplomatic interests: like many donors, Japan’s ODA has historically been driven by commercial and diplomatic interests. Without a standing army, ODA has been used to gain international influence, including within the UN.
2. Bureaucratic and centralized in nature: Japan’s ODA has little involvement from other stakeholders, including civil society, media, and political parties. Aside from domestic commercial interests, Japan’s ODA has lacked a clear domestic constituency. In addition, JICA, the official development arm of the Japanese government, is very hierarchical and centralised.
In addition, several key principles inform Japanese ODA:
3. Request-based assistance
4. Low conditionality
5. ODA as mutually beneficial
Japan focuses largely on loans and project based aid, often heavily tied to procurement of Japanese contractors. Although it has a traditionally strong focus on infrastructure and industrial production, Japan is gradually engaging with issues including governance and human security, even if such engagements remain limited. Japan is also beginning to emphasize poverty reduction as a key objective of aid, to be achieved through economic growth rather than the provision of basic services, which is the angle pursued by most mainstream donors .
Geographically focused on Asia and more recently in Africa, Japanese ODA has been criticized as being poor as it diverges from the “standard” model of aid effectiveness. However, just like other donors, Japan has different strengths and weaknesses and so it is important to recognise that the picture of Japanese ODA is more nuanced. For example, it has excelled in the promotion of south-south cooperation and triangulation but has found it harder to embrace donor coordination and harmonisation.
The speaker concluded by offering a brief summary of Japan’s value added to international development.
1. Japan has been one of the largest donors in terms of overall ODA for a long time and is thus an important player in the development community.
2. Sensitivity to both sides of development – as a former aid recipient Japan engages with recipient countries on a more level basis
3. Insider/outsider status – as a non-Western major donor, Japan has a distinctive voice which it has sometimes used to bridge the gap between DAC donors and emerging donors.
4. Consistency – Japan is viewed by many recipient countries as a highly reliable partner, partly because of its consistent focus on the “hardware” of development.
5. Innovation – Japan has been an innovative leader in South-South and triangular cooperation, “beyond aid” efforts, disaster risk reduction and management, and the human security agenda.
2nd Speaker: Dr. Keiichi Tsunekawa, professor and previous Director, Japan International Cooperation Agency Research Institute (JICA-RI)
The second speaker provided a response to the report prepared by ODI on Japanese ODA, stressing that his views were personal and not institutional.
He noted that the authors seem quite critical of the Japanese approach to ODA, in line with other western reports. At the same time, in his view, the authors highlight many of the criticisms of Japanese ODA as strengths later in the report.
According to Mr Tsunekawa, given the current fiscal environment, Japan cannot afford to be a comprehensive ODA provider in the near future, and Japan should continue to focus on modalities and previous approaches. He offered some key goals that Japanese ODA should pursue in the future:
1. Methods to sustain and enhance MDG’s should be explored: Japan needs to strengthen its efforts to achieve 2015 goals, but capacity development and empowerment must be improved at the local level if the MDG’s are to be achieved sustainably.
2. Japan can offer financial resources beyond aid: The expansion and development of infrastructure and private investment are also needed to make the achievement of the MDG’s sustainable. Altruism and commercialism are not necessarily contradictory, and public private partnerships can benefit both donors and recipient governments. African leaders are working to achieve economic transformation and increase private enterprises; emphasis on commercialism may help companies in donor countries and those in recipient countries.
3. The Paris declaration approach to aid effectiveness is not necessarily sound policy: Donor harmonisation and alignment can sometimes be counter-productive. Successful and innovative projects that do not meet the agenda of all donors involved in a country can be shut down if aid harmonisation is the only goal. For example, a JICA community based school management project in Niger, initially rejected by other donors, has become quite successful and has been scaled up to a larger region with assistance from the World Bank.
Finally, the speaker noted that the Japanese approach to development faces a serious challenge: because it is project-based, it has not always been successful in scaling up. Japan is only now starting to focus on a more programmatic approach.
3rd Speaker: Penelope Jackson, Policy Analyst, Peer Review, Development Cooperation Directorate, OECD
The third speaker presented the results of the 2010 DAC peer review of Japan (her presentation is available online). Country peer reviews are a hallmark of the OECD; they take place every 5 years, and the peer element is crucial. Germany and Denmark reviewed Japan, offering perspectives from a donor that is similar to Japan in many key respects (Germany) and another that is quite different (Denmark). Bangladesh and Kenya also provided input as recipient countries. Ultimately the objective of peer reviews is to change behaviour, improve accountability, and increase learning within each donor.
The speaker presented the following findings from the peer review:
1. Although Japan is the 5th largest donor in terms of overall ODA, it scores poorly on the ODA as a percentage of GDP scale.
2. Japan has begun to develop a clearer strategic vision, with an emphasis on human security.
3. Japanese ODA is very consistent and reliable, because Japan’s policy framework is fairly stable. There are few shifts politically leftward or rightward within the country. Recipient government partners consider Japan to be very reliable
4. Engagement from Japanese civil society remains limited.
5. With the new streamlined JICA, Japan has an opportunity to streamline more than it has and become a more nimble donor. The Japanese ODA structure remains rather bureaucratic in nature, however.
6. Japan’s comparative advantage is in infrastructure, but to ensure it continues to be a leader in aid, Japan will need to untie aid more and consider the impact of its aid on local communities more appropriately.
Discussant: Debbie Warrener, ex-Policy Adviser, DfID
The discussant presented the following reflections on the preceding presentations to help shape the ensuing discussion:
1. Japan is putting a great deal of effort into communicating its model to the international community in fora such as this event. It is highly unlikely that DfID would hold a similar meeting in Tokyo.
2. However, Japan can still make a better effort at making its voice heard in the international donor community, especially given its size as a donor.
1. What is country ownership?
2. Given that bilateral aid is much higher than multilateral aid, is Japan trying to forge its own development identity?
3. How does the report translate non-Western research and articles for the mainstream?
4. How appropriate is the Paris agenda for Japanese aid? Some donors may need to follow the Paris agenda more closely than others, and others may not have the same problems. Where does Japan fit in this complex scenario?
5. What is the level of engagement from civil society in Japan and what does that look like?
6. Japan should make more efforts to constructively add value to the discussion and discourse in international dialogue. In what way could Japan be more strategic in achieving this?
Alina Rocha Menocal
The Japanese want aid to be mutually beneficial and to remain highly visible, and that’s much more likely in bilateral arrangements than multilateral ones. Japan has been an extremely important and dominant player in Asia where it has been a leading development partner. Japanese aid has been very successful in Asia. On the other hand, given the relatively disappointing results of international assistance in Africa after decades of engagement, DAC donors have tried to come up with different sets of principles to address the shortcomings of aid, and that is how the aid effectiveness agenda evolved. Japan is a much smaller and less well-known partner in Africa than it is in Asia, and so in that region it may be that it has to engage with the aid effectiveness agenda more fully to remain a relevant player, especially in terms of donor coordination and harmonisation
A key reason helping to explain why there has been relatively little engagement of (Japanese) civil society in ODA is that government ministries in Japan are very well structured and formal and civil society organisations need to have specific entry points. On the other hand, currently an organisation similar to BOND is starting to gain some ground but little has been achieved so far.
Mr. Tsunekawa said that he remains unconvinced of the alleged virtues of the Paris Declaration and the aid effectiveness agenda, and so Japan should not feel hostage to it.
He also stressed that It is very difficult to sell ODA to politicians; the Japanese electorate is not that interested in ODA.
Japanese society is much more inward looking than Western societies and civil society is not as strong. The awareness of the need for development and poverty reduction is much lower in Japan.
In 1979, Ezra Vogel, a Harvard academic, wrote a book entitled “Japan as Number One: Lessons for America” in which he portrayed Japan, with its strong economy and cohesive society, as the world’s most dynamic industrial nation. Just over three decades later, Japan holds lessons of a less encouraging kind. Its society is growing older at a faster rate than anywhere else in the world. Its position as the second largest economy in the world has been usurped by China many years earlier than had been predicted. And with the rise of the emerging ‘BRIC’ (Brazil, Russia, India and China) economies, its influence as the ‘Asian representative’ within high-level international forums is increasingly challenged.
To some extent, these problems have been looming for many decades already, with Japan typically finding it difficult to assert itself on the world stage on a level commensurate with its economic might. Its Official Development Assistance (ODA) has in many ways become Tokyo's main foreign policy tool, utilised as a form of investment, a confidence-building measure, a solution for bilateral problems, a manifestation of economic power and global leadership, and as a tool for buying power and influence in various international organisations. As the 2010 OECD-DAC Peer Review of Japan put it, “Japan sees international development cooperation as in its own long-term interests.” The future of Japan’s ODA is therefore an issue of much greater importance than simply maintaining Japan’s national pride in its status as one of the world’s largest bilateral donors – it is a political and economic imperative.
This means that after decades of being broadly acknowledged as the ‘quiet diplomat’ in international affairs, a ‘bridge’ between East and West, Japan is today standing at a political, economic, social and cultural crossroads, with the future of its ODA a critical influence on its compass. A number of interrelated questions are apparent:
What are the distinctive characteristics of Japan’s ODA, and can these add value to contemporary development efforts or are they more of an obstacle to effective collaboration and cooperation?
Should Japan aim to recapture / pursue a greater role for itself on the international stage, and if so, how might it need to change the way it promotes, allocates and evaluates its ODA accordingly?
To what extent is the way Japan views the value of its ODA aligned with the perceptions around its contribution held by the other major stakeholders in the development field?
How can Japan make more effective use of particular topics, countries, programs or learnings within the diverse spread of its ODA to secure greater interest, profile and influence among key external stakeholders?
Will the groundswell towards donor homogeneity (and assumed consensus of policy and practice) being led by the OECD DAC prove more effective in promoting sustainable development outcomes than a donor community that recognises and exercises different strengths in different areas?