EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

Abstract: The world’s largest donor of ODA during the 1990s, Japan, is now making substantial cuts. ODA decreased by three per cent for the fiscal year ending March 2002 and for the coming year another ten percent cut will be made. This is an attempt to improve the situation of the Japanese state budget that after ten years of economic stagnation or recession is running with a huge deficit. Coupled with this we have the falling value of the yen, which further decreases what the recipients can expect to get from Japan. Under present conditions conventional Japanese ODA is not likely to play a major role in the development in Northeast Asia, at least not in the short term perspective. There is considerable space, however, for a number of initiatives from local levels and Japanese NGO:s. I will start by looking at what countries that have a chance of getting ODA. This will be followed by a general overview of Japanese ODA and what future trends will look like. Aid to Mongolia will be analysed and then aid to Japan’s largest recipient, namely China, and on-going changes there in. Finally I will conclude with suggestions for small scale measures that might enhance Japan’s image in the area.

Keywords: Foreign Aid; Japanese ODA-policy; Japan-China relations; Mongolia; NGO; Japanese local initiatives

JEL-codes: O10; O20

16 pages, October 1, 2002

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