Japan's ‘Aid’ to developing countries

Although Japan has now emerged as one of the major donors, next only to the USA, Japanese aid activities have been criticized as being ‘neo-colonial’. Much of the criticism results from the fact that in the total flow of financial resources, the share of the official development assistance and the ‘grant’ element in it is rather small. A much greater proportion of the total flow is directed towards export promotion for Japanese goods and securing the sources of raw materials abroad. The geographical distribution of Japanese assistance gives further grounds for allegations of ‘neo-colonialism’. Around 60 per cent of the total financial flow is directed towards Asia, a little less than half of which is concentrated in South-east Asia. It is almost certain that the total flow in absolute terms will continue to increase; in view of the energy crisis and the likely balance of payments difficulties, it is doubtful whether the current high levels in terms of percentage of GNP will be maintained. If there is to be a cutback it is almost certain that ‘aid’ will suffer more than foreign investments. In terms of proportion of GNP, official development assistance has not reached the target set by the International Development Strategy for the UN Second Development Decade. It is not expected to do so in the foreseeable future.