Mekong Watch CATFISH TALES
5 February 2003 Issue #10
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CONTENTS
1. JAPANESE POLICY NEWS: NEW DEBT CANCELLATION PLAN ANNOUNCED--BURMA's
DEBT INCLUDED (27 December 2002)
The Japanese Government announced that it will quit its previous debt
relief grants scheme and switch to debt cancellation from next fiscal year
(April 2003). Burma's debt is also subject to cancellation, but no
measures to ensure that this will lead to political, social and economic
reform have been formulated.
2. JAPANESE POLICY NEWS: ODA EMBASSIES--WATCH OUT FOR THE ONE NEAREST
YOU! (21 November 2002)
"ODA Embassies" have been opened in several countries as a part of the
Japanese Government's ODA reform. But exactly what these "Embassies" are,
what they are for, or what role they are to play is still not
understood. It is not yet clear whether they can become useful tools for
reform, or whether they will become token exercises used to justify
policies and practices detrimental to local communities in ODA recipient
countries.
3. TO SUBSCRIBE AND UNSUBSCRIBE
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1. JAPANESE POLICY NEWS: NEW DEBT CANCELLATION PLAN ANNOUNCED. BURMA's
DEBT INCLUDED (27 December 2002)
On 27 December 2002, the Japanese Government announced that the old debt
relief grant scheme will be replaced with debt cancellation beginning next
fiscal year (April 2003).
The 31 countries which have been receiving debt relief grants will be the
beneficiaries of debt cancellation from April. Of these, two are from the
Mekong Region--Laos and Burma. While the exact amount eligible for
cancellation is not clear, the amount of debt remaining to be paid by Laos
and Burma are 600 million yen and 273 billion yen respectively. The
Japanese government has not disclosed the precise amount of debt to be
cancelled, because that would make the arrears of each country
known. Burma's debt is largest among the 31 countries, and second to Burma
is Bangladesh at 131 billion yen.
While debt cancellation in and of itself may be a welcome development,
there are grave concerns about the apparent lack of thought behind the
Japanese government's decision, especially in regard to Burma.
One of the problems is monitoring. In order to ensure that debt
cancellation contributes to the improvement of economic and social
conditions in recipient countries, the Japanese government plan to follow
the progress made by each country in implementing their Poverty Reduction
Strategy Plans (PRSP). These plans are required under the HIPC
Initiative. Burma is a HIPC country, but does not have a PRSP. Therefore,
there is no mechanism for the Japanese government to monitor whether the
debt cancellation will contribute to poverty reduction in Burma. There is,
of course, no way to ensure that the debt cancellation will not encourage
the military regime to further inflate its military budget.
To see the Japanese Foreign Ministry's announcement of the change in the
debt cancellation policy, see:
http://www.mofa.go.jp/policy/oda/reform/measure0212-2.html
WHAT'S THE DIFFERENCE BETWEEN DEBT RELIEF AND DEBT CANCELLATION?
Under the old policy, the debtor country was required to initially pay
Japan the amount required by its payment schedule. After receiving this
payment, the Japanese government would return the same amount as a grant to
the debtor country. Upon spending this grant aid, the debtor country was
required to submit a list explaining precisely how the grant was used. The
grants could be used to purchase certain materials agreed upon between
Japan and the recipient country. In this way, the Japanese government
believed it encouraged self-help efforts and allowed the Japanese
government to monitor the ways in which the grants were used. This system,
however, proved to lack transparency and the Japanese government failed to
monitor the grants well. In the case of Burma, for example, it was found
that the use of approximately 5 billion yen in debt relief grants remained
unaccounted for over a 4-year period.
Under the new policy, the debtor country need not prepare payment at
all. The amount to be paid back according to its payment schedule is
simply cancelled. Lists will not need to be submitted to the Japanese
government. Countries participating in the HIPC Initiative will be
required to fulfill their obligations under this initiative, but for other
countries, there is no specified conditionality or monitoring
mechanism. Why there is differential treatment among the countries is
unclear.
More information on the policy change can also be found on the Jubilee
website:
http://www.jubilee2000uk.org/jmi/jmi-news/japan150103.htm
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2. ODA EMBASSIES--WATCH OUT FOR THE ONE NEAREST YOU!
In the year 2002, the Japanese Ministry of Foreign Affairs (MOFA) was hit
by a series of scandals including the expulsion of an NGO from an
international conference and a Parliamentarian's corrupt links to ODA
projects. Voices calling for reform of both ODA and the Foreign Ministry
itself grew stronger as a result.
On 9 July 2002, Foreign Minister Junko Kawaguchi announced "Fifteen
Specific Measures for ODA Reform," based on the results of reports such as
the Final Report of the Second Consultative Committee on ODA Reform. These
15 measures are categorized into five areas, including "Partnership with
Non Governmental Organizations," and in this area is a measure stipulating,
"[i]n those developing countries where many Japanese NGOs are engaged in
assistance activities, regular consultation meetings ("ODA-Embassy") among
Japanese embassies, field offices of JICA and JBIC and NGOs will be
immediately started." [
http://www.mofa.go.jp/policy/oda/reform/measure0207.html]
It is not a bad idea for the Japanese government and ODA implementing
agencies to have discussions with NGOs familiar with local
situations. However, the "Fifteen Specific Measures for ODA Reform" do not
elaborate any further. Exactly what is this "ODA Embassy?" What is to be
discussed, and how should discussions proceed? Will results from these
discussions be reflected, as have results from other ODA reform-related
meetings, in final decisions on ODA policy and reform? These are crucial
issues which have yet to be clarified.
For example, on 13 September 2002, at the Third Meeting of the Board on
Comprehensive ODA Strategy held in Tokyo, the Director of MOFA's Economic
Cooperation Bureau, Mr. Nishida, made the following statement in regard to
work which had just begun to reevaluate the Country Assistance Program for
Vietnam.
"Some time ago, MOFA released its 15 Measures for Reform. One of these
points is called by the name of "ODA Embassy." It is developing into a
framework in which Embassies, JBIC, JICA, and NGOs (not only Japanese NGOs)
can participate and exchange opinions on a constant basis. It will be a
local system which we want to be used to the fullest extent. The first
draft has been written, and we will take advantage of this occasion to
discuss and finalize it."
According to Mr. Nishida, it seems that the ODA Embassy is a mechanism to
draft proposals for country assistance programs, and this mechanism will
ensure that NGOs (not exclusive to Japanese NGOs) can also participate.
However, on 26 November 2002, during the Fifth Meeting of the Board on
Comprehensive ODA Strategy when discussions on Country Assistance Program
for Sri Lanka were taking place, there was no particular mention of the ODA
Embassy being such a drafting mechanism. In addition, in a midterm
proposal released by the Working Team on ODA reform (set up by the Liberal
Democratic Party) on 29 October the same year, it included the following
statement: "In regard to NGOs...coordination among our diplomatic
missions, implementing agencies and NGOs will be strengthened with the
utilization of the 'ODA Embassy.'" In this case, it seems that the ODA
Embassy is more a channeled through which JIBC and JICA can coordinate with
NGOs when implementing ODA rather than a place to discuss ODA policy.
On 21 November 2002, an ODA Embassy was opened at the Japanese Embassy in
Bangkok, Thailand, and one staffperson from Mekong Watch attended. On that
day, there was a total of about 10 participants from the Embassy, JBIC,
JICA, and NGOs active in Thailand. At the beginning, the government side
explained the various schemes it has, such as the NGO Project Subsidy, and
some opinions from NGOs were raised regarding these schemes. Concerns were
also raised that the objectives of these meetings had not been explained,
but the government side failed to provide a clear answers. Other opinions
included the need to keep and disclose records of the meetings and to
organize such discussions with Thai NGOs.
In response to the opinions raised by NGO participants, the Japanese
Embassy in Bangkok has put minutes of the meeting up on the website (though
only in Japanese) at: http://embjp-th.org/indexjp.htm
What is happening with ODA Embassies in other countries? As far as Mekong
Watch has been able to gather from inquiries through the Japanese embassy
in Bangkok, ODA Embassies have already been opened at least in Cambodia,
Kenya, Nepal, the Philippines, and Burma (as of December 2002). However,
there is no information about these meetings on any of the websites of the
Japanese embassies in these countries.
The idea for the ODA Embassy was announced by Foreign Minister Kawaguchi
herself as part of the "Fifteen Specific Measures for ODA Reform," but
outcomes thus far are disconcerting. What is necessary for ODA reform are
not top-down directives from MOFA to create this kind of a
framework. There must be sincere and critical discussion on the need for
and meaning behind ODA reform. MOFA, Embassies and ODA implementing
agencies must then clearly understand why these reforms are necessary and
implement them accordingly. If it is for this purpose that the NGO
Embassies are gathering the opinions of citizens and NGOs, both from Japan
and other countries, this is commendable. It is a concern, however, that
records of ODA Embassy meetings cannot be easily obtained, making it
impossible to evaluate if are effective means for reform. One would
imagine that embassy staff would want to refer to the experiences of ODA
Embassies in other countries, but even this is not being done.
Mekong Watch would like to bring your attention to the possibility that an
ODA Embassy has already been opened in your countries of concern. With the
current mystery surrounding their objectives, it is necessary to watch and
ensure that they are not used as a means to implement negative policies or
justify faulty practices in ODA implementation.
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