Japan Preparing for 2008:
Setting the agenda for UK-Japan partnership

GRIPS Development Forum
September 2007
Izumi Ohno, National Graduate Institutefor Policy Studies (GRIPS)

About GRIPS Development
Forum (GDF)
Launched in 2002, within GRIPS A research unit dedicated to policy studies
and networking in the area of int’ldevelopment and aid
Industrial policy and globalization
Development administration and aid management
 Education policy in Africa
 ODA policy and reforms, etc.


http://www.grips.ac.jp/forum-e/1Topics of Presentation
How is the Government of Japan (GoJ)
preparing for 2008?



TICAD IV (May 28-30: Yokohama)
G8 Summit (July 7-9: Hokkaido Toyako)

Initiatives by GDF for 2008

Formulating ODA reform proposal -- with a viewto the 2008 events and the birth of “new JICA”(October)Compiling Japan-UK Aid Partnership Report

TICAD: Tokyo International Conference for African Development
JICA: Japan International Cooperation Agency

1. GoJ Preparation for 2008 (1):TICAD IVTowards a Vibrant Africa: 3 pillars
 Boosting economic growth in Africa
 Ensuring “Human Security”
 Poverty reduction towards achieving MDGs
 Peace and stability, and democratization Addressing environmental issues/climate changeFirst awarding ceremony of Hideyo Noguchi
Africa Prize-- Preparatory meetings planned in fall 2007-spring 2008-- Efforts are underway, separately by MOFA, MOF, JICA,JBIC, METI/JETRO etc., to intensify support to Africa

2Our Observation
Japan’s promise of doubling ODA to Africa(2005-07) at the 2005 Gleneagles Summit: likely
to be achieved, if debt relief is also included But, Japan’s vision for future ODA strategy andvolume for Africa remains unclear
 Absence of stakeholder forum to discuss AfricandevelopmentConcerns expressed by African Diplomatic Corps inTokyo, CSOs, academia, etc.

Advocacy efforts by CSOs (TSCF, TNNet, CCfA,etc.): organizing workshops, involving African
NGOs
TSCF: TICAD Civil Society Forum / TNNet: TICAD IV NGO Network /CCfA: Civic Commission for Africa

Regional Distribution of Japan’’s
Bilateral ODA (net disbursement basis)
百万ドル

in million of US dollars, % shows share of SS. Africa

12,000
12.6%

9.5%

11.8%

10,000
10.3%
10.1%

10.8%
10.1%

11.0%

12.8%

11.8%

8,000
1,33312.1%

859

6,000

8.7%
969

950

966
1,067

4,000

1,137

11.4%

995
1,144

910

851

8.8%

10.9%

530

647

2003

2004

584

803

2,0000
1991

アジア
Asia

1992

1993

1994

Middle
中近東
East

1995

1996

Africa
アフリカ

1997

1998

Latin
中南米
America

1999

2000

2001

Oceania大洋州

2002

Europe欧州

2005

Others
その他

Note: The data on 2004 and 2005 include debt relief, amounting to $107.55mn (1.8% of the total) in 2004
and $3553.45mn (33.8%) in 2005.
Source: Ministry of Foreign Affairs, Japan (Japan's Official Development Assistance White Paper 2006)

3

GoJ Preparation for 2008 (2):G8 Summit: Hokkaido, Toyako
Climate change/environment: priority agenda
 PM Abe’s proposal for “Cool Earth 50”
Building on “A Leading Environmental Nation
Strategy, Japan”
 A new financing mechanism proposed to support
developing countries
 MOFA requesting ODA budget increase (+13.9%)
for FY2008, mainly on global environmental issues(Aug. submission to MOF)
African development: to carry on thediscussions at TICAD IV

Our Observation
Modest public interests in the African agenda,compared to climate change/environment (bothLDP and DPJ) Political inertia likely to continue, affecting
budget and strategic decisions (humiliating defeatof LDP in the July 2007 Upper House election)
Advocacy efforts by CSOs intensified, based on
the experiences of the 2005 G8 Summit
GCAP Japan (Hottokenai Sekai no Mazushisa)
 Japan 2008 G8 NGO Forum: established in Jan. 2007,
with more than 100 NGOs; currently preparing
common platform

4

2. GDF Initiatives for 2008 (1):Formulating ODA Reform ProposalMonthly discussion forum among aid
stakeholders on Japan’s ODA reforms
Started in July 2006 (met 11 times) Over 120 participants

Voluntary initiative by those professionals
who share a sense of crisis in Japan’s ODA
and the importance of 2008
 Formulating a proposal for renovating
Japan’s ODA

To be finalized by October 2007

Issues to be Addressed in
Our Private Manifesto for ODA Reforms
Philosophy and strategic visions
 Intellectual leadership in global development debates
 ODA budget increase Communication strategies to build political & public support
 Effective response to development needs in partnercountries
 Policy planning and implementation system (in both Japanand partner countries) Public-private alliances (esp., business, NGOs & CSOs,academia)
 Simplification of administrative procedures (e.g., budget,procurement reforms)
 System for professional career development
 Renovation in Japan’s aid to Africa
5<Preliminary>

Our Manifesto: Africa
Japan should increase ODA allocation toAfrica (e.g., new sources of funding,earmarked spending for Africa) Japan should concentrate additional aid toAfrica on a few countries with a potential tobe “growth leaders”:
Strong political will (top leader); social stability;
reasonable administrative mechanism, etc.

Create success models: “graduation from aid”
 Strengthen field offices in those countries
concerned

<Preliminary>

Our Manifesto: Africa (cont.)Provide comprehensive support -- from policy
advice to concrete activities on the ground

Promote the productive sector (e.g., agriculture, industry)
Flexibly mix bilateral and multilateral resources, and involve
private sector and other donors (incl. Asian emerging donors)

Establish stakeholder forum to discuss strategy
and implementation support to aid to Africa
 Create special facilities for Africa to promoteprivate sector investment (e.g., matching fundfor CSR, ODA equity investment, PPP)
6

3. GDF Initiatives for 2008 (2):Japan-UK Aid Partnership Report

ODA policy report:
Serving as the conceptual basis for Japan-UK
partnership Assisting GoJ in formulating key messages in the2008 events

Independent research initiative, as a followup to our Feb. 2007 visit to UK
Authors: researchers, policymakers andpractitioners in UK, Japan, Asia (Malaysia) andAfrica (Uganda)
 Publication: scheduled for early 2008
Japan-UK Aid Partnership:
Key Concept
Donor collaboration based on the principle of“diversity and complementarity”
 Arguments for strategic and instrumental
diversityComparative advantages of donors
 Non-fungibility of ideas
 Inseparability of content and instruments Japan-UK bilateral aid partnership should bealso guided by this principle

7

Comparative Advantages ofDonors
Is global convergence to a single idea or
approach desirable? (large swings indevelopment vision in the past decades)

Heterogeneity of partner countries, as well as
the donor community
 Each donor has different strengths andweaknesses relative to others
 Donor diversity likely to increase in the future Importance to seek an inclusive approach toenhance combined aid effectiveness

Distribution of Sector Allocable ODA to
Low Income Countries and Sub-Saharan Africa(commitments, period averages, %, 1990-2004)
Low Income Countries
11%
26%

11%

10%

15%

12%

Sub-Saharan Africa
14%
24%

26%

12%
19%

29%

33%

1990-1994

10%

15%
26%

34%

29%

12%

52%

39%

1995-1999

50%

47%
33%

2000-2004

Multisector
Production
Inf rastructure
Social sectors

1990-1994

1995-1999

2000-2004

Multisector
Production
Inf rastructure
Social sectors

Source: IDA (2007) Aid Architecture: An overview of the main trends in official development
assistance flows. p.11, Chart 7.

8

Non-fungibility of Ideas
Policy ideas are often non-fungible evenunder harmonized procedures.
 In light of diversity of donors and partnercountries, we should be open to various
possibilities and explore ways most suitablefor each case.
 Importance of providing alternatives
 Country ownership, based on policy
multiplicity.
Non-fungibility of Ideas(Examples)Debate over transition strategy: “big bang”
vs. “gradualism”
Different strategies adopted by China, Vietnam, ascompared to Russia, Eastern Europe

Some East Asian countries took advantagesof non-fungibility of policy ideasDeliberately seeking a variety of competing advice
from different donors to match country needs anddonor expertise (e.g., Thailand’s Eastern Seaboard
Development Plan, Malaysia’s response to financialcrisis)

9

Inseparability of Content andInstruments

Different degree of specificity and transaction
intensiveness in public sector activities


Pritchett and Woolcock (2002); Fukuyama (2004)

Different development objectives call fordiverse aid instruments
Conflict with the need for instrumental
harmonization?
 Need to match aid modalities with development
priorities of each countryInseparability of Content andInstruments
It is important to match country needs, instruments,
and comparative advantages of donors
Projects

Budget Support

Instruments Addressing specific

Providing large resource
transfers (incl. recurrentexpenditures), generating
multiple policy andinstitutional reforms in asynergic manner

problems, seeking policy
innovation, implementing
pilot activities (for welldefined objectives)

DonorsPreferred by donors whoemphasize field-based
process support, as anentry point

Preferred by donors who
excel in policy dialogue andadministrative reform

10

<From: Kenichi Ohno’s PPT, “The East Asian Growth Regime and Political Development”(Sept. 2007)>

How Different?
Development and Aid Strategy
There is a clear difference in developmental
thinking between Eastern practitioners andWestern aid community
East Asia’s Way

Western Donors

Economic prosperity andnational pride

Poverty reduction(MDGs)

Policies Investment, trade, skills,
technology

Health, education,
governance

GoalKeyactors

Central government andbusinesses

Local communities andpoor people

How Different?: Japan-UK as Donors
Volume (ODA/GNI)(2006: net disbursement)

Regional distribution

1.

(2004-05: % of total grossdisbursement)

2.

Major aid use

1.

(2004-05: % of total
bilateral commitments)

Grant share

Japan

UK

$ 11,608 mn(0.25%)$12,607 mn(0.52%)

East Asia & Oceania (40.7%)
Middle East & North Africa(19.3%)

Economic infrastructure(26.8%)
2.Social & administrative
infrastructure (21.4%)

1.
2.

Sub-Saharan Africa (53.6%)
South & Central Asia (21%)

Social & administrativeinfrastructure (30.0%)
2.Humanitarian aid (8.1%)
1.

48.8%

96.5%

4 countries

17 countries(2006)(2004/05)

1.7%

9.2%

(2005: % of total ODAcommitments)

Budget support
ODA through NGOs
(2004-05: %of total bilateralcommitments)

Source: OECD/DAC (Development Cooperation Report 2006, CRS online database)11

Features of Japanese Aid
Dual identity as donor and latecomer: growth
aspiration, real sector concern
 Field-based, concrete thinking; pragmatism
 Passive ODA policy; clumsy speaker

Ethical debts to neighboring Asian countriesFragmented aid system (both policy and implementation)
Weak political interest in ODA policymaking

Modest stance in aid relations can contributeto fostering relationships of mutual trust?
 Currently, reforms underway, on ODA
institutional framework
New Institutional Framework for Japan’’s ODA
1.

Overseas Economic Cooperation Council (OECC)

Tooyama
Chief Secretary<April 2006>

Prime Minister

MOFA Minister

MOF Minister

METI Minister

2. Strengthening of MOFA’’s policy planning and coordination capacity
MOFA Minister
Global Issues Dept.
Development

Policy Planning forInt’l Cooperation

UN Admin.

ECB<Aug. 2006>

ICB

Foreign Policy
BureauRegionalBureaus

3. New JICA with multiple aid menu <From Oct. 2008>
JBIC
OOF

ODAloans

Source: Ministry of Foreign Affairs

JICA

MOFA

New PFITA

GrantsPublic Financial
OOF
Institutions

New JICA
ODA
TA
loans

Grants

Notes: ECB: Economic Cooperation Bureau / ICB: International Cooperation Bureau

12Features of British Aid
DFID, widely seen as effectively leading global
development debates; coherent and organizedapproach to aid delivery
 Good at designing policy frameworks andinstitutional architecture; strong drive forinnovative approaches
 Sometimes perceived as promoting its own
model? (DAC Peer Review 2006)
 “Policy-rich”; but driven by idealism, detachedfrom field-based practices?
Why Japan-UK AidPartnership Now?
Japan and UK are important players in the donor
community (2nd & 3rd largest DAC donors) Because the two are very different, there exists a
great potential for productive cooperation
 2008 offers a window of opportunities forpromoting fruitful collaboration, esp. in growth
support in Africa
 The two can also make important contributions
to engaging Asian “emerging donors” insupporting African development
13

Thank You Very Much !
Please visit the website of GRIPSDevelopment Forum
For our general activities
http://www.grips.ac.jp/forum-e/ For publications
http://www.grips.ac.jp/forum-e/publications.htm
The END

14