Scandinavian Working Papers in Economics

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

No 210: IS FOREIGN AID, OR EXPECTATION OF SUCH AID, AN EFFECTIVE TOOL TO INFLUENCE NORTH KOREA?

Marie Söderberg ()
Additional contact information
Marie Söderberg: European Institute of Japanese Studies, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: Peace building and peace preservation are new key concepts in Japanese foreign aid policy. According to the revision of the ODA charter in 2003, the objective of Japan’s foreign aid is to contribute to the peace and development of the international community, and thereby to help ensure Japan’s own security and prosperity--“Japan aspires for world peace. Actively promoting the aforementioned effort with ODA” that Japan will carry out “even more strategically” in the future. Asia and especially East Asia is pointed out as a priority region. North Korea, with whom Japan has not yet normalised its relations, is one of Japan’s closest neighbours and would, from a logical point of view, then seem like an important starting point. However, when main Japanese aid agencies such as JICA (Japan International Co-operation Agency) and JBIC (Japan Bank of International Co-operation) are asked, no one works officially with aid to North Korea. The standard answer is that there is no aid to that country, besides some smaller amounts of Japanese humanitarian aid that are channelled through multilateral organisations. If Japan regards aid as one of its main tools for creating peace, why isn’t aid provided to North Korea? Aid is a very complex issue and not giving is often regarded as effective as giving, when it comes to getting concessions and changes in the recipients’ policy behaviour. It is used both as a carrot and a stick. Aid is always envisioned as something quite plausible, if North Korean policy behaviour is changed for the better according to Japanese judgement (so called positive aid sanction); but aid is never paid out and remains an illusion as long as it does not change (negative sanction). But the question for Japan is more complex than this. There are various domestic opinions and interest groups that have to be taken into consideration. The kidnapping issue (Japanese citizens kidnapped by North Korea in the 1970s) has lead to a considerable amount of anti-North Korean sentiment that makes it difficult for the Japanese government to disperse aid to North Korea. There is also foreign pressure at work; the US, Japan’s military ally, and other western countries as well have imposed economic sanctions on North Korea due to its withdrawal from the nuclear non-proliferation treaty. This also affects the Japanese position on the aid question. Keeping all these factors in mind, this paper questions if Japanese foreign aid is an effective tool to influence North Korean policy behaviour. Has it ever led to a change of behaviour? Has it contributed to peace and stability in the area in any way?

Keywords: Japanese politics; Japan-North Korea; Japanese ODA policy

JEL-codes: H56; O20; R58

13 pages, September 16, 2005

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