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Japan: Evolving Policy Toward the Third World
Japan: Evolving Policy Toward the Third World
ihcapan's policy toward ihe LDCl has evolved as Tokyo's own view of Japanese national interest* has changed and as Japan has responded lo US pressure tolobal role commensurate with its economic
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Economics have always dominated Japanese lies lo developing nations. To Japan, the LDCs arc sources of raw materials, fuels, and foodstuffs indispensable to its survival and industrial growth and important markets for Japanese manufactured eoporla. Japanese officials argue lhai the long-term stability of the Japanese economy requires stable trading relations with thej
Aggregate trade and investment numbers tell the story. Japan's dependence on LDC markets and sources of supply has been increasing.1 LDCs absorbedercent of total Japanese nvcrveas sales, up fromercent1 (sec figure I) LDCs also supplied nearlyercent of Japanese imports1 compared withecade earlier, in part because of higher oil poors. Moreover, Japan is more depettdent on the LDCs than is the United States or Western Europe. The United States marketed onlyercent of its exports in the LDCs1 and drew onlyercent of im imports from those counlriea^For Western Europe, the shares were even smallcrH
In terms of major commodities. LDCs suppliedoercent of Japanese food imports andoercent of raw materials over the past decade. LDCs have been particularly important as sources of supply for fuels; they meet almostercent of Japan's requirements, including almost all oil and liquefied natural gas (LNC).I
Figure i
Japan: LDC Share or Total Exports, b> Region
Africa
Partem
market for the manufactured capital and consumer good* that dominate Japanese oserseas sales. Asia ranks firstource of supply for foodstuffs, wood, nor ferrous metal ores, and LNG. second for crude petroleum and iron ore (see figuret also absorbs about half of all Japanese exports to the LDCs. The Middle East continue* to supply most of Japan's oil needs and much of its LNG. It also IsC regional market.
Reflecting Tokyo's drive to line up secure sources of fuel and raw materials, LDCs had receivedillion in direct investmentore than half of
stands out among LDC regions, bothupplierroad range of commodities and
Japan's overseas investment worldwide Majordcvelopmenl projects were undertaken in(oil andrazil (ironnduwait neutral rone (oil) |J
Nonetheless, the aggregate statistics mask the client to which Japan's economic interests haveairly small number of LDCs:
The fast-growing East Asian LDCs.
The raw material suppliers in ASEAN.1
Oil producers in the Middle East.
A few countries in Africa and Latin America with high-growth potential or large raw material bases.
Five LDCs -Indonesia. Bra/il. South Korea, llong Kong, and Saudifor Si percent of Japanese investment in developing countri-
New PeJi tieal Co
In theokyo began to take another look at its relationship with the LDCs. The immediate causes of this rrevaluation were Vietnam's invasion8 and the Soviet invasiono the Japanese, these Soviet or Soviet-backed advinces directly threatened the security and stability of tbe Middle East and Southeast Asia, the LDC regions of greatest importance toJ
Tokyo's new perspective alsoore basic change in Japan's overall foreign policy. Through most of, Tokyo had stressed Japar.'i detennusation to be on good terms wiih alt countries in order to maximize access to foreign markets and sources of supply and to minimizeIn Japan's relations with foreign governments, including the Soviet Union. As the spirit of East-West detente evaporated in thend Tokyomore conscious that Japan's actions had an impact on big power relations, the Japanesebegan to emphasize its commitment to the
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Japan: Evolving Policy Toward the Third World
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considerations have begun to figure more prominently inpolicy toward LDCs us Japan's own vie* of ils national interests evolves and as Tokyo respondsS pressure tolobal role commensurate with its economic power. The Japanese approach, however, continues to be driven by economic imperatives.
'revaluation of policy toward the LDCs was stimulated by Vietnam's invasion of Kampuchea8 and the Soviet invasion of Afghanistanhich threatened stability in ASEAN and the Middle East. Underlying this, however,arger change still under way in Japan's overall foreign policy that reflects growing appreciation of the Sovieteepening self-confidence stemming from Japan'ssuccess, as well as US demands that Japan use its economic power io help deal with the Soviet challenge.
Tokyoigh priority on maintaining stable commercial relations with the LDCs, which are valuable markets for Japan's manufactured exports and supply much of the fuels, foodstuffs, and raw materials indispensable to Japan's survival and industrial growth. Japanese interest ihus focuses on the relatively fast-growing East Asian LDCs, the raw maicrial suppliers of ASEAN, and the oil producers in the Middle East. The key policy tool has been economic assistance.
Japanese foreign aid increased rapidly in thend, although tight budgets havelowing of the growth rate. Tokyo remainslo further expansion of aid. SoutheastThailand, ASEAN's "frontline state" -has been the principal beneficiary ofeconomic assistance. Japan has also boosted aid lo Turkey, Egypt, Oman, and other strategic countries in or adjacent to the Middle East.
International pressure and Japan's own estimate of its strategicwill continue to push itore active relationship with the LDCs. The new Nakasone government will, if anything, move further in this direction. Nonetheless, there are limits to how far and how fast Japan will proceed:
Aid policy will continue lo be driven by economic imperatives, and Asia will continue io receive the lion's share of foreign assistance-
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Within Asia, more iban half of ODA is directed toward ASEAN. The dramatic increase in aid to ASEAN that occurred after the fall of Saigon and the invasion of Kampuchea reflects Tokyo's decision to use economic resources in tupnort ofobjectives (tee table 1I. Indonesia has ranked first, not only within ASEAN but among all atd recipients, but"frontlinemost from the new Japanese approach61 Japanese aid commitments togrewillion6 million,share of bilateral Japanese aid grewerceni |
Outside of Southeast Asia, Tokyo has boosted aideterogeneous collection of slates in and around the Middle East. Although most aid decisions in this area were coloredesire toegion crucial to Japan's oil supply, the rationale in each case was usually more complex:
to ir
lia, and Kenya.
Tokyoman. Soma-
The Soviet invasion of Afghanistan strcngthedclaim on Japanese aid.
Tokyo increased aid to Egypt and Jordan because ii viewed both countries as essential to the Middle East peace process.
ember of NATO and well outside Japan's traditional area of concern, has nonetheless received Japanese ODA, primarily because Tokyo hopes this will help to burnish its credentialsember of the WesternaBBaV
Countries in Central America and the Caribbean, although on the periphery of Japan's foreign policy interests, are now receiving more Japanese ODA, albeit still in modest amounts. We believe Tokyo sees Jamaica, the Dominican Republic. Costa Rica, and Honduras as places to demonstrate to Washington that Japanooperative ally. Japan's own interests in Latin America focus on the major raw material exporters of Mexico. Brazil, and Venezuela, which together account for almost half of Japan's trade with tbe region, Japan's involvement includes far more investments, trade credits, and bank loans thanaid. Reflecting its belief that Mexico is anC. however. Tokyo is heavily involvedultilateral efforts to solve Mexico's international financial problems J
Over the past decade, the share of Japanese aid going to Africa has increased even though tbe relative importance of trade with the continent has declined. In part the Japanese are motivated by humanitarian concerns; aid for refugees and for food has increased.
alliance with the United Slates and its concern over the policies of (be USSR. We believe the underlying factors in this process, which is still in progress, include:
Increasing concern about the Sovieterceived erosion in the US strategic position and the growing Soviet military presence in East Asia.
Growing Japanese self-confidence stimulated by the rapid growth in Japan's economic power.
US demands that Japan use iu economic power to help deal with the Soviel >
Tokyo never considered military aid or theof military force, because such measures would have violated Japan's constitution and certainly would have aroused the Japanese public and provoked strong attacks from (he press and the opposition parties. Instead, the government opted to use economic(supplemented by loans and investment) as iu key policy tool for influencing ihc LDCs. Based on official statements and Japanese Governmentwe believe Tokyo's goals aretrengthen the economic underpinnings of LDCs and reduce opportunities for Soviet intervention
Figure 3
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Japan: Foreign Aid Com mi tree nls"
o" is? n
'OITklilAimunic IODA)
pledged in8 to double foreign aid over Ihe next three years. In fact,70 tolal Official Development Assistance (ODA)increased4 billion3 billion. In1 Tokyo followed up byew goal for ODAilhori. upillion1
Tbe Japanese Government favors bilateral overaid. The Japanese *ant masimum awareness among the recipienii of where tbe aid comes from (see figureilateral aid commitmcnu denominated in US dollars increased rapidly in theyercentince then, however, the rate of increase has slowed as Tokyo has tried to trim tu fiscal deficit and the yen has depreciated against the dollar.1 bilateral aid expandedercent. Nonetheless, compared with most other
government accounu. economic assistance has fared well. In the government's budgett will probably increase by aboutercent-JJ
Shifting Country Focus
Although aid is not accelerating as rapidly as it did during, countries of less economicand more political importance are receiving greater amounts of aid. Thevident in the share of LDC irade accounted for by tbeop aid recipients.0 the topccounted forercent of Japan's total trade with LDCs:1 onlyercei
Although Asian LDCs continue to be the favored recipients, they now receive only about two-thirds of Japan's ODA, compared toercenl'
'pf ibereeeable ioercent share c* lapaeeac aid Chiaeoenrfiuftisi Hale. China falls <MUtde tbe set of LDCeH
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in ihe Caribbean. Tokyo also warns io demonstrate its international responsibility. In its first involvementN peacekeeping activity, for example, Tokyo has volunteered equipment and civilian personnel to the prospective UN Transition Assistance Group for Namibia
Case Study
Egyptood example of how the Japaneseisreater role to political/strategic considerations in its approach to the LDCs. Japanese Foreign Ministry officials believe that Egypt is the pivotal country in the region because of its military, political, and cultural position in (be Arab world and because of its critical role in the US-sponsored peace process. Although the country's economic importance to Japanercent of total Japanesein aid.ercent of total bilateral aid commitments andercent of Japanese aid lo the Middle Eastapan has provided funds to improve communications, public health, andand to increase the capacity of the Suez Canal.
Prospects
International pressure and Japan's own estimate of its national interest will, wc believe, continue to push itore active relationship with LDCs. At former Prime Minister Suzuki's request, forapanese think tank recentlytudy of the Soviet threat to global stability. It concluded that Soviet expansion into LDC areas abundant in energy resources and raw materialserious threat to Japanese interests!
noncuicicss. there are limits as to how lar ana now fast Nakasone will move. Economic Interests will continue to drive Japan's policy toward the LDCs. We believecontinue to
receive tbe majority of Japanese aid. althoughcountries will move up and down on the annual list depending on particular projects and prioritiespj
Slower Japanese economicevere budget crunch, and adverse shifts in exchange rates probably will keep Japanese foreign aid from expanding rapidly. The Foreign Ministry is already predicting it will be very difficult for Japan to fulfill its pledge to double its aid. Although in absolute terms Japan is now the fourth-largest aid donor, the burden on ihe Japanese economy was only slightly heavier last year lhan il badecade earlier.0 aid2 percent of GNP compared3 percentecauseecline in multilateral aid. the ratio was8 percent.
In addition to economic constraints, continuedpolitical sensitivity to any involvement in the security affairs of other countries will force Tokyo to proceedapanese diplomat recently explained to US officials during consultations on Africa that Tokyo must "camouflage" the strategic considerations shaping aid policy andubliclhat aid is motivated by humanitarian concerns. At most. Japanese officials can publicly acknowledge lhat aid carihe used to promote Japan's economic sccurityH
The protracted, acrimonious aid negotiations between Seoul and Tokyo sincellustrate theand political dilemmas Tokyo occasionally faces in extending aid to strategic LDCs South Korea,eighboring country directly threatened byaggression, is of undoubted strategic importance to Japan. For that reason. Tokyoive-yearillion package of loans and aid. This was generous by Japanese standards and reflected Tokyo's commitment to maintaining stability on the peninsula as well as its interest in appearing supportive of the US defense commitment to SouthP^PJ
Prime Minister Suzuki, however, had to intervene before the various ministries could agree on the package Some officials argued thai South Korea's
status as one of the relatively wealthy LDCs made it ineligible for large amounts of concessional economic assistance. Still others were worried that giving way
lo Seoul up their
biggest obstacle, however, was Seoul's insistence on publicly justifying its aid request as Japan'sto supporting peace in Korea. Until ihe South Koreans decided to abandon this approach,almost broke down. Even so. the textbookthis fall has reduced Tokyo's enthusiasm and will probably delay final resolution of the aid issue for several more monlhsH
Original document.
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