Thursday, Jul 19, 2018
Government | Asia-Pacific | Japan

Japan International Cooperation Agency

JICA triggers a virtuous cycle towards the achievement of SDGs in ASEAN and beyond


6 months ago

Mr. Shinichi Kitaoka, President of the Japan International Cooperation Agency (JICA)
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Mr. Shinichi Kitaoka

President of the Japan International Cooperation Agency (JICA)

Mr. Shinichi Kitaoka, President of the Japan International Cooperation Agency (JICA), highlights the importance of international cooperation in these turbulent times that have put multilateral frameworks under serious threat. The President also explains the great impact JICA has had in ASEAN’s economic development and beyond by developing the main infrastructure network that served for the private sector to blossom.

Although it is true that globalization has lifted millions of people out of poverty, it has also contributed to shape new centrifugal forces–such as the rise of protectionism, mass migration due to economic inequalities and conflicts–that may undermine this progress from its core. What is your personal interpretation of the current status of world affairs? Considering the famous academic debate between Fukuyama and Huntington, where do we stand today in the End of History - Clash of Civilization dichotomy?

I agree with Samuel Huntington’s view. As a political scientist and historian, I am well aware of the important roles that values such as religion and identity play in politics and economics. Economic globalization is wonderful. It has benefited millions of people in many different regions and countries in the world. Yet, the meaning of life is defined in many ways by religion, culture, and tradition.

In 2015 the Sustainable Development Goals were launched as an agreement among almost all countries around the world at the United Nations. SDGs represent a benchmark in recognizing the necessity of a common framework for global cooperation. In the same light, the Paris Summit in December of 2015 set an important agenda in order to attain environmental sustainability. Unfortunately, this spirit of rising multilateral cooperation was then overturned in 2016, with the rise of populist leaders that shifted the political agenda from global challenges to national interest and agenda. Understandably, this political shift has created frustration in many countries that have for long time worked together to shape a common vision for the whole world.  

 

What could be the role of international cooperation today in terms of reconciling the benefits and disadvantages brought by globalization?

In order to address this question, we need to consider international cooperation in relation to national interests. Global superpowers, such as the U.S. and China, can exert great influence and control over the international scene and tend not to play with the same rules of the game as everyone else. Therefore, for superpowers, international cooperation is less important.

In contrast, for other industrialized powers–such as Japan, Germany, France, and UK–but also smaller countries, international cooperation remains very important. In our most recent meetings all around the world, leaders from these countries have re-emphasized the importance to maintain and further support the spirit of international cooperation that has achieved great results just two years ago.

 

Some scholars have pointed out that higher levels of ODA are statistically linked to higher levels of poverty and slower economic growth in some regions of the world: could ODA become a curse for developing countries?

The correlation should be argued on the basis of different country’s domestic idiosyncrasies that could make economies more or less vulnerable. The level of economic development in developing countries varies significantly. Countries that are less developed require higher flows of ODAs. So, in these cases, the correlation may be distorted by pre-existing factors–namely the lower level of development.

Certainly, it is possible to give you counter examples. In the case of East Asian countries, ODA has had a great impact on the economic development of these nations. In the 1950s, the level of economic development of countries in Sub-Saharan Africa and East Asia, South Korea included, was comparable.

 

In this context, what would you say has been the impact of JICA’s ODA? Would you say JICA’s ODA shaped a better environment that the allowed countries to attract private investment?

Japan is one of the largest bilateral donors in the world. The Japan International Cooperation Agency possesses different instruments to assist countries around the world, such as grants, concessional loans, and technical assistance. We also have a volunteer system (Japan Overseas Cooperation Volunteer), which was modeled after the American Peace Corps and it has over 50 years of history. In addition, we have emergency relief teams. So, as you can see, we have a comprehensive system and a significant budget.

In this context, Japanese ODA was an essential part of the economic development of East Asian countries, including South Korea and China.

In terms of geographical areas, our operations first began in East Asia. Japan had to pay reparations in the aftermath of the war, mainly to Indonesia, Philippines, and Myanmar. When the reparations were over, we assured a continuous flow of capital through our ODA.

Of course the ODA’s flow began mainly for public projects. That being said, the economic development that we contributed to shape over the years has created positive spillovers for the private sector to blossom and take a more active role in the economy.   

Japanese ODA focused primarily on the infrastructural development in East and Southeast Asian countries. JICA’s assistance in this region triggered a virtuous cycle. Infrastructure development was a catalyst for private investment that was a remarkable contributor to the overall economic growth of these countries. As a result, a stronger middle class emerged that supported the democratization of the whole region. This is the case of Indonesia, for instance. Besides infrastructure, JICA supported education, public health, and agriculture.

Infrastructure was key to create a conducive environment for Japanese manufactures to bring their investment in the region. Without ports, roads, bridges, or water systems, it would have been impossible for these countries to attract private investment.

Japanese businessmen started flocking to the region and set up export industries thanks to the infrastructure development in place. It is important to underline also that export industries are more difficult to be corrupt, because if they were, they would simply not be competitive at international level and investment would drop rapidly and significantly.

Japan is today facing a serious challenge with the rapidly aging population. I agree with the policy set by the administration to encourage Japan’s private sector to expand overseas. Small and medium enterprises represent the backbone of Japan’s economy. Because of our extensive experience in developing countries, we know what are the requirements in those contexts.

Therefore, today JICA acts also as a facilitator for these SMEs to find mutually beneficial opportunities in the countries where we operate with our ODA. We are able to leverage on our domestic network to foster the overseas expansion of corporations from all 47 prefectures.

 

The Sustainable Development Goals that you mentioned earlier have set the new vision for 2030s that replaces the previous Millennium Development Goals that expired in 2015. Critics say very few objectives were actually achieved by the MDGs. Are the SDGs attainable, or yet just another vision difficult to implement?

I was Ambassador to the United Nations when the MDGs were heatedly discussed. It is true, some people argue that MDGs were a failure, but I beg to disagree. Poverty rate was reduced from 47% (1990) to 14% (2015). Economic growth skyrocketed in Asian countries such as China and India, but clearly it wasn’t as successful in Sub-Saharan Africa. My position on the MDGs is that when they were launched, everyone labeled them as impossible; but they were partially achieved. This is why we needed a new set of goals.

The core concept of the SDGs is “no one left behind,” which is completely in line with JICA’s work to support human security by providing the necessary assistance to underprivileged communities all around the world. JICA’s work aims at helping these countries to build the necessary hard and soft infrastructure to be able to stand up on their own feet. Thus, I see the SDGs as an enlarged version of our effort.

We have contributed in the education sector with the creation of many text books in many countries, and also by sending teachers; receiving teachers for training; or even by physically building schools. Public health is another key area of strength for JICA. A very well known example in developing countries that however is not so famous to the general public, is the development of the “maternal and child health handbook”. This instrument was created in Japan in 1948. It is a small notebook distributed to pregnant ladies in order to record all important information about the child. We strongly believe that all human beings are equal. So, we consider this measure as an essential tool for very fundamental needs.  Of course now there are more innovative and digital tools. However, these notebooks are crucial in refugee camps or remote rural areas where mothers don’t have access to the public administration for identification. In these circumstances the “maternal and child health handbook” serves as a form of ID. This system has now spread all over the world, in more than 40 countries. In 25 of them, they are distributed with the assistance of JICA.

Other areas in which JICA has an important impact are agriculture and industrial development. Especially in Africa, many countries are trying to diversify their economies by moving away from their over reliance on natural resources. This decision is the right one and we fully support it.

We also have to recognize our main challenges though. The most compelling one in which we have to improve is, in my opinion, to find better ways to curb climate change. We had a pioneering role with the Kyoto protocol. However, since the Fukushima accident occurred, it’s been hard for the government to define our future energy policy. However, if we take a closer look to global warming, it consists of different aspects. When it comes to environmental sustainability of the industrialization process, Japan has overcome the problems related to industrial pollution that accompanied the economic boom of the 1960s. We are now exporting the new technology that allowed this progress especially to Asian countries, where urban areas are becoming overpopulated and therefore increasingly polluted.

JICA supports the development of sustainable transport networks with the construction of railways and subways. In this context, we recorded also some positive externalities that we didn’t account for when we launched these infrastructural projects. An interesting example is the construction of the metro line in New Delhi, India. We witnessed here a small cultural revolution, as people started waiting in line for the public transport. We also introduced “women only” cars as we have them in Japan. We recorded a sharp increase in the number of women passengers, which not only made the transportation system more profitable but more importantly supported women empowerment. We currently have similar projects in Bangkok, Manila, Jakarta, and Ho Chi Minh City and we are accelerating the process to launch projects in Yangon.

We have also worked on the Phnom Penh water supply, truly a case study of excellence in the domain of international cooperation that is now referred to as the “miracle of Phnom Penh”. The scope of our infrastructural projects is not only domestic. We promote transnational connectivity that is key to increase economic activities. The East-West Corridor in the Southern part of the Indochina Peninsula is a great success story of JICA.

 

The recent 31st ASEAN Summit held in Manila has marked the 50th anniversary of the association. Japan is part of the ASEAN + 3 framework, which denotes the importance of Southeast Asia for Japan’s political and economic agenda. In your opinion, what role will Japan play in ASEAN in the future?

Our approach to Asia has a long history and we have also to admit that hasn’t been always successful. When the then Prime Minister of Japan, Kakuei Tanaka, traveled for a round of visits in Southeast Asian countries in 1973, there were unexpected demonstrations against his visit. We realized it was still a reaction to the war, as not so much time had passed since the end of the conflict. Therefore, the foreign policy was drastically changed under Prime Minister Takeo Fukuda, whose strategy became well known as the “Fukuda Doctrine” in 1977. Japan’s foreign policy in the region consisted of three key pillars: first of all, Japan will never become military power. Second, Prime Minister Fukuda reasserted that Japan would build up a relationship of mutual confidence and trust with ASEAN countries, and third, Mr. Fukuda affirmed that Japan from that moment on would only focus on creating equal partnerships and heart-to-heart relationships between Asian countries. Bear in mind that at that time Japan was a giant in the region and Southeast Asian economies way far smaller than what they are today.

Ever since then, Japan has been trying its best to put ASEAN countries in the driver’s seat. JICA also supported the overall regionalization process of ASEAN as it had a positive contribution in the peace process of Cambodia and its membership to the association. JICA supports the solidarity in the region, which is facilitated by our contribution to economic growth and democratization. With our approach, we see that the historical issue has disappeared vis-à-vis East Asian countries. Some people think that China and Japan are competing over the influence in the region. The reality is that Japan supports the sovereignty, security, and solidarity of the region. We really hope that China follows our approach.

ASEAN remains our focus area. Prime Minister Shinzo Abe’s called for 'Free and Open Indo-Pacific Strategy' during the first ever Tokyo International Conference of Africa's Development (TICAD) meeting held in Africa that took place in Nairobi in August 2016. China’s ‘One Belt One Road’ policy replicates Japan’s policy and experts think it could create some struggles. However, recalling our approach and commitment to the development of the region, Prime Minister Shinzo Abe gave a very interesting speech last June when he opened to potential cooperation between Japan and China in this framework, should some basic principles be in place.

First, infrastructure developments must be open and fruitful to everyone. Second, the procurement process must be transparent and open to everyone. Third, do not lend too much money to a country that is financially weak. The Sri Lankan case is a very good example in this sense. The Chinese government lent a significant amount of money to Sri Lanka’s government for the construction of Hambantota Port, which was not able to pay back. So, China received concessional rights to control the port for 99 years. This is what Western powers and Japan did in China in the Nineteenth Century. Obviously, giving up the rights to control a strategic port is dangerous as it can negatively affect the trade routes and it could also be turned into a military port.

As previously mentioned, JICA and Japan support the sovereignty of all countries in ASEAN. For instance, in The Philippines, Vietnam, Indonesia, Malaysia, Thailand, we are collaborating with the local authorities in order to develop an efficient coast guard system. The Philippines alone consists of more than 7,000 islands. A solid Coast Guard system allows not only to securitize trade routes but more importantly, fight against illegal trafficking and provide border control against attempts of regional expansions by neighboring countries.

 

JICA’s budget was almost $16 billion for FY2017 and consisted of financial and investment operations, technical cooperation, and grant aid. Asia stands out as the top recipient with over 76%. Do you expect ASEAN to play a relatively bigger or smaller role in the future of JICA?

Our involvement in the region will vary on a country-to-country basis. In some cases, JICA will aim to provide assistance to help some countries escape the middle-income trap. In other cases, for instance Myanmar and Vietnam, JICA’s assistance will aim to shape the future infrastructure network.

ASEAN will definitely remain the largest recipient of JICA’s assistance, although the amounts will vary on a yearly basis. We are also trying to expand our assistance to African countries. Geography, of course, plays an important role as it is more difficult also for private companies to work so far away. I always tell my European friends that Africa should be for EU countries what ASEAN is for Japan.

We are working in Africa in different areas. For instance, in agriculture, we are increasing the output of rice production with a project called CARD, namely Coalition for African Rice Development. The objective is to double the African production of rice within the ten years (2008-2018) and we are on the right track to achieve this goal.

With regards to public health, besides the ‘maternal and child health handbook’ previously mentioned, another successful initiative was the production and distribution of bed nets to protect people from mosquito-borne diseases, such as malaria. The bed nets, containing a special treatment to keep the mosquitoes away, were produced by Sumitomo Chemical.

As mentioned before, in 2016 we held the first TICAD on the African continent and we also increased the frequency of this summit from every 5 to every 3 years. We are recording a great wave of change in the African continent, with a growing awareness about the importance of diversifying the economy and avoid the resource curse. Therefore, JICA will always play a leadership role in promoting the local ownership of assistance interventions. At JICA, we carefully consider all aspects and factors before launching projects with our partner countries in order to find together the best ways to proceed and let the countries take responsibility and ownership of the development projects.

Ownership is very important when it comes to transfer of knowledge. We want to educate the local communities to build infrastructure with the highest safety and environmental standards so that in the future they can take care of it entirely by themselves. This is why when you travel on our sites, you will find very few Japanese people but very well surrounded by locals.

 

What are the key aspects and factors to carefully consider in the future of international cooperation?

We see today the rapid emergence of the “new donors”. While traditional donor agencies such as JICA, USAID, DFID comply with the DAC international regulations under the OECD, China for example is not part of OECD so is not bound to the same rules. So, most of the time what happens is that China brings in its state owned enterprises to develop the projects, while in the case of OECD countries the procurement should be untied and transparent. Moreover, because they don’t have to comply with the high standards set by OECD DAC, China doesn’t have to comply with regulations in terms of labor safety and environmental protection. But besides China, there are many more new donors. Turkey is assisting many countries of the former Ottoman Empire. Morocco is playing a leadership role in Northern and Western Africa.

What I think it is necessary for the future of international cooperation is to create a common framework that includes the new donors. I also hope that in the near future the U.S. comes back to the table of international solidarity. Only this way we could try and reduce the gap between richer and underdeveloped countries. Africa’s population is booming and if there won’t be economic opportunities for the middle class to rise, there will be a large population living in poverty, which will turn into a huge liability for developed countries. I am pretty confident that this gap will be increasingly reduced.

What concerns me is, however, the income inequality that is exacerbating disparities within each country. This gap is rapidly widening and sadly we are witnessing that while the rich are getting richer, the poor are becoming poorer. It’s a very complex issue, in which national governments play a crucial role.

Finally, I think that in order to create a better framework, we need a new network and organization that better reflects the changes occurred on the global scene in the last couple of decades. The inability of the United Nations’ Security Council to find viable responses to many crises around the world is a clear demonstration of the need of new framework. Other organizations, such as G7 or G20 may become more and more relevant in terms of creating the necessary common ground in the future.



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