The Japanese Way to Development: One of the Biggest and Most Important Conferences on the Effectiveness (or Otherwise of Aid) Was Held in Busan, South Korea This Month. It Was Expected to Be a Clash between the Western Model and That Followed by Japan and Increasingly, China, India and Korea. Editor Anver Versi, Who Observed the Japanese Method First-Hand in Africa Recently, Gives His Views
Versi, Anver, African Business
The whole structure of Overseas Development Assistance (ODA), or aid, in common parlance, is being shaken and stirred. There are rumours and counter rumours that given the parlous state of many OECD countries (including Japan), aid budgets are being slashed or that even more conditionalities are being imposed by donors.
Aid (despite the fairly spectacular growth of some African countries over the past decade) remains a very important factor on the African economic landscape. Several countries are dependent on aid to balance their budgets, pay salaries to public service employees such as teachers, keep their health services running, finance essential infrastructure and intervene even in areas such as national audits and conducting elections.
Of course, aid is not a one-way street. Donors leverage important commercial, economic and political interests on their largesse. Aid has a very persuasive influence in the areas in which it operates and economists tell us that the often invisible 'harvest' from aid far exceeds in value the amounts paid out to recipients.
This explains why advanced countries are loath to reduce their ODA budgets even during times of acute belt tightening at home. Loss of influence abroad could translate into both loss of markets to hungry global competitors as well as creating kinks in their resources-supply pipelines.
While this equation has been perfectly clear to both donor and recipient and both parties seem perfectly happy with the arrangement, what Africans have repeatedly questioned is the effectiveness of the delivery of the aid to achieve its stated objectives.
African commentators have argued that the approach taken by many Western donors has largely failed to achieve the major targets set out. Given the fact that aid today is a $200bn industry, they ask why is it that there is little to show for the billions that have been poured into the region; they want to know why poverty and disease are still rampant despite the colossal sums thrown at them; why there is such a yawning gap in infrastructure and why has Africa's development (the main objective of aid) been so laggardly in comparison with other developing regions?
They dismiss claims - often made by the Western media that official corruption is to blame - as far too exaggerated - the figures don't add up, they say and anyway there are a host of checks and balances that control the flow of financial resources. No, they insist, aid has not worked because the approach has been wrong. The diagnosis has been wrong, the medication has been wrong and the dosage has been wrong. Is it any wonder that despite gulping gallons of the medication, the patient is still ill?
This is where it gets very interesting because there is another development model at work in Africa since 1954. It is the Japanese ODA. Japan, until fairly recently the largest aid donor in the world, is a member of the OECD-Development Assistance Committee (DAC) comprising largely of Western donors but has come under considerable criticism for "going it alone".
What are the main differences between the OECD and the Japanese approaches?
Japan's ODA is based on the concept of self-help which played the principal part in Japan's own development transformation after World War II; non-intervention, request-based and often project, rather than programme, oriented.
Non-intervention means acknowledging the independent sovereignty of recipient states. Japanese ODA only responds following requests from recipient governments and it works through governments, thereby allowing the recipient to take ownership of the project and to align its projects to government priorities.
This hands-off approach means that Japanese ODA comes with far fewer conditionali-ties than Western aid. In addition, it looks to be engaged in 'beyond aid' efforts linking ODA with investments and trade. …