October will mark the 70th anniversary of Japan joining the Colombo Plan, under which Japan began assistance – initially technical cooperation – to other countries in Asia. The basic policy for Japan’s Official Development Assistance, or ODA, is set out in the Development Cooperation Charter, which was revised in June 2023. The Charter defines the purpose of development cooperation as to “contribute even more actively to the formation of a peaceful, stable, and prosperous international community” and to “contribute to the realization of Japan’s national interests, such as securing peace and security for Japan and its people and achieving further prosperity through economic growth.” The previous 2015 version did also mention “national interest,” but the revised 2023 Charter is quite different in that it further specifies the purpose of development cooperation to be the “realization of Japan’s national interests.”
Of course, development cooperation – public development assistance provided to emerging countries – was not divorced from the national interest even prior to that. In fact, ODA has been very closely tied to Japan’s national interest from the very outset. However, this was not actually stated because it served Japan better if there was no explicit link; instead, the emphasis was placed on Japan “contributing” to the economic development of emerging countries.
Japan’s participation in the Colombo Plan was meant to be the first step in its postwar return to the international community. Moreover, given the “loss” of the Chinese market with the founding of the People’s Republic of China, Japan focused its overseas economic policy on Southeast Asia to help its own economic recovery. Its reparations, quasi-reparations, and economic cooperation with Southeast Asian countries, all of which are also part of the ODA origin story, were all part of advancing Japan’s national interest, both in terms of Japan establishing relations with these countries by making “amends” for the Second World War and in terms of promoting Japanese exports. Once Japan became an economic power, it was under intense pressure from Western countries to fulfill its responsibilities, and this drove an increase in ODA as Japan sought to show that it was doing just that. The original 1992 version of the Development Cooperation Charter did not even use the term “national interest,” but the very fact of showing that Japan was providing ODA for ostensibly altruistic purposes was, in itself, in service of Japan’s national interest.
However, with circumstances both in Japan and internationally changing rapidly and Japan’s interests changing with that, it has become necessary to specify that ODA is indeed a tool for pursuing Japan’s national interest. First, with growing fiscal constraints imposed by Japan’s long post-bubble era economic slump, the government felt that the Japanese public needed to be shown that ODA is important not only as a way to help others, but also as a tool of diplomacy. Even so, the 2003 version of the Charter still avoided the use of the term “national interest,” reflecting concerns for the communities and citizens actually involved in the assistance and that same deep-seated reluctance to overtly link ODA to the pursuit of selfish goals.
Since then, however, the security environment surrounding Japan has become increasingly uncertain. With the rise of China, Japan is no longer is the largest economy in Asia. The balance of power between the United States and China has meanwhile shifted somewhat, and strategic competition between the two superpowers gradually intensified throughout the 2010s. The relationship between Japan and China has become more confrontational, and the Mutually Beneficial Relationship Based on Common Strategic Interests now exists in name only. In these circumstances, the idea of linking ODA to the national interest more clearly and using it strategically is finding greater acceptance. Under the government of Abe Shinzo, ODA was linked to that administration’s “Proactive Contribution to Peace,” “diplomacy that takes a panoramic perspective of the world map,” and “Free and Open Indo-Pacific (FOIP),” and was framed as an important tool for creating a desirable international and regional environment for Japan.
As the international environment became still more challenging with the escalating strategic competition between the United States and China in the wake of the COVID-19 pandemic, the destabilization of relations with China, and the outbreak of the Russia-Ukraine war, the Kishida administration has decided to specify the pursuit of the national interest as a goal of ODA while putting greater emphasis on its “strategic use.” This direction is denoted by his government’s version of “Free and Open Indo-Pacific (FOIP 2.0),” which explicitly includes the new National Security Strategy (NSS) from December 2022 and the measures for the Global South issued in early 2023, as well as the new version of the Development Cooperation Charter from June of that year. These documents seem to clearly show a shift from a time when Japan felt it needed to conceal the strategic nature of ODA to a time when making the link overt is in its national interest.
Today, Japan’s ODA faces a number of challenges. The first is growing fiscal constraints. With a declining birthrate and aging population, Japan must pay rising social security costs, at a time when a shrinking labor pool means that tax revenues are falling. Furthermore, the three security documents adopted under the Kishida administration call for a strengthening of defense capabilities, including raising defense spending from 1 percent to 2 percent of GDP. Given these constraints, will Japan be able to secure financial resources for strategic ODA? Moreover, although the government advocates the use of private funds, it is unclear how many private companies are interested in investing in ODA projects. An additional problem is that the significance of Japan’s ODA has receded for Asian countries, which are key to stabilizing the environment around Japan.
The new Development Cooperation Charter lists a wide variety of areas, such as quality growth, food and energy security, the digital arena, strengthening maritime security, and responding to global issues. This ambitious scope notwithstanding, the reality is that Japan will have to be increasingly selective, choosing ODA projects that can effectively contribute to peace and prosperity.
OBA Mie is a professor at Kanagawa University.