THE IMPLICATIONS OF JAPANESE OFFICIAL DEVELOPMENT ASSISTANCE ON ASEAN

Abstract

In the sixties Japan was one of the largest recipient of foreign aid. Today, 35 years later, Japan's 1991 ODA budget of US $10 billion ranks the first in the world. There are even talks of a “Japanese Marshall Plan" which seeks to recycle the enormous Japanese surplus back to the developing/underdeveloped countries. The foci of Japanese aid has always been Asia, and in particular ASEAN. This is the subject of this academic exercise. ASEAN, being the core of Japanese aid, serves as the most adequate parameter of Japan's aid policy. This is of particular interest in the midst of vigorous aid debate and persistent criticisms on Japanese aid. As such, this study seeks to examine the impacts of the Japan's aid on ASEAN countries for the past decade or so (1976-1988). Efforts would also be made in relating the realities with the vigorous aid debate that has been going on for the past three decades. However, it must be mentioned that the study is greatly handicapped by the non-availability of primary information and data. As it is noted by many economists dealing with development ecomomics in developing countries: an underdeveloped country has underdeveloped information system. In addition, few proper and reliable evaluations have been accomplished so far in the foreign aid literature, due to difficulties in evaluating the impact of a project (how would one define success? certain projects require certain time lag before their effects could be felt), and the extremely high cost incurred. Therefore, the study focused instead on the role Japanese ODA plays in the development process and the growth prospect of ASEAN. Indeed, it is found that despite many complications and difficulties involved, Japanese aid has been assisting ASEAN in their economic growth, especially in their transition to export orientation. This is achieved by sharing the expenditure of their development budgets, basically that of building up the economic infrastructure of the country. It is also found that Trade would be an even more effective catalyst in accelerating the growth process. Therefore, while Japan seeks to further improve the quantity and quality of her aid, more should be done about dis-erecting both the tariff and non-tariff barriers. There is much room and scope for further research. Indeed, only by continuous assessment and evaluation of Japanese ODA to ASEAN would it renders itself as an effective catalyst in assisting ASEAN nations to achieve the stage of take off into self-sustaining growth.