Japan's Foreign Aid Policy

Abstract

Developing countries are now at the threshold of the so called decade.l The outlook is promising but it is wishful thinking to underrate the immense and pressing difficulties. Developing countries must accelerate and diversify their economic development urgently if they are to attain momentum for self-sustained growth in the coming decade. To facilitate this, developed countries should voluntarily help to initiate the big push for developing countries for the mutual benefit and progress of both groups of countries. It was in order to invent and accomplish efficient measures for expanding trade of developing countries, that the United Nations Conference on Trade and Development was held in March-June, 1964. Whether increase in trade or increase in aid is the more urgent for developing countries may be debated. It seems, however, that aid is a necessary precondition to increasing their capacity to trade, and their trade strength in world markets. Both trade expansion and aid are urgently needed. Since she depends heavily on the markets of developing countries,2 Japan (a country which must trade to live) has a vital interest in the steady econornic development of Southeast Asia and other developing regions and the expansion thereby of their external purchasing power. Furthermore, political unrest and disillusionment developing countries, particularly in neighbouring regions, create anxieties in Japan. Hence, Japan takes a keen interest in development assistance and has been doing her utmost in extending both financial and technical assistance to developing countries despite various limitations on her own resources. The present paper attempts, firstly, to review briefiy what Japan has done in extending foreign aid. Secondly, Japan's aid policies are critically examined in order to find lessons from experiences, either from success or failure. Thirdly, an attempt is made to assess what Japan should do and how she could improve her foreign aid policy. And fourthly, it is stressed that a wider international cooperation among advanced countries in framing foreign aid policies is urgently needed.