Japan ODA: Cause of river erosion, displacement and ... · Bangladesh rose to US$ 356 million in...

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The Reality of Aid Asia-Pacific 2005 Bangladesh

Introduction

The Peoples Republic of Bangladesh wasestablished as a sovereign nation in 1971after a 9-month long liberation war. Alongwith many international developmentagencies Japan started to financedevelopment activities inBangladesh since 1973.From this point of view,Bangladesh hasexperienced over 30years of the 50 years ofJapanese ODA. However,it could also be said thatBangladesh inherited therelationship of Japan withODA when it was part ofPakistan. Starting from avery meager amount of US$15 million in1972-73, Japanese assistance toBangladesh rose to US$ 356 million in1994-95 and continues to be around thislevel today. Bangladesh has received atotal amount of US$ 6049.79 million asforeign aid from Japan.

Japan ODA: Cause of river erosion,displacement and environmental

destruction in Bangladesh?Farida Akhter, UBINIG, Bangladesh

Among the various countries that JapanODA is supporting Bangladesh standsnumber one in Grant Aid with US$ 216.35million, accounting for 9.98% of the GrantAid. This Grant Aid is utilized for thedevelopment of “critical sectors” of theeconomy. In the Technical Assistance,

Table 1. Foreign Aid Disbursement by Japan(1971-2001) in US$

TYPE of AID GRANT LOAN TOTAL

Food Aid 245.265 163.210 408.475

Commodity Aid 1964.874 1377.468 3342.342

Project Aid 668.142 1630.832 2298.974

Grand Total 2878.281 3171.51 6049.791

Bangladesh stands 15th, with US$ 22.83million accounting for 0.82% of the totalTechnical Assistance. Here China, receivingfinance from Japan for Technical Assistanceis number one. Bangladesh is ninth amongthe ten major recipients of Japan’s BilateralODA during 1996 to 2001.

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The Reality of Aid Asia-Pacific 2005Bangladesh

Japan’s ODA policy to Bangladesh is notunique. Japan has no particular interest inBangladesh and there is no evidence thatas an Asian country it has interest instriking on commonalities of culturalhistories and connections. Bangladesh,despite its geographical location in thevisual map of South Asia, it is not India.The eastern location of the country in theSouth Asian geography, bordering Myanmarand long and historical relation with thepeople of South East, Bangladesh could bevery interesting for Japan in terms ofdevelopment approach with culturalinsights. It is well known that the culturalarchaeology of Bangladesh has very strongroot in both Jainism and more so the lifeand teachings of Buddha. A cultural worldthat could not be effaced either Islam ormodernization. It is evident in the local orfolk cultures ofBangladesh. Could Japanand Bangladesh exercise amutually beneficial relationboth at cultural andpolitical levels is yet to beexplored, but it is hinderedmainly by the lack of visionin Japan’s ODA policy thatcannot go beyond thenarrow economic interestin the market of aperipheral economy whereeffective demand forJapan’s commodities andconsultancies could onlybe generated throughdevelopment financing.

Japan ODA did no better than say USAID,DFID or European Commission, etc.

The stereotype policy perception is basedon few very negative indicators: high rate ofpopulation, low literacy, poor infrastructure,inequalities in income, and bad governanceof the countries; although this is not theentire picture of Bangladesh. Thisperception is created by multilateral andbilateral donor agencies like the WorldBank, Asian Development Bank, USAID,European Union, etc. Japan’s perceptionBangladesh is only a repetition of theconventional understanding of the donoragencies.

Accordingly, in the 1990s, Japan began togive new priorities to Bangladesh. From1992, Japan became the largest donor for

Table 2. Top Ten Donors of Bangladesh (99-00)in US$ million

IDA 385

Japan 354

Asian Development Bank Special Funds 267

United States 110

United Kingdom 104

European Commission 66

Germany 42

Denmark 38

Netherlands 34

Canada 34

Source: OECD DAC Statistics (2000)

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Table 3. The facilities constructed in Bangladeshwith Japanese ODA loans are:

1 Kaptai Hydro Power Station Unit No. 4 and 5,

2 Fenchuganj Power Station,

3 Power Plant Barges and Transmission Lines,

4 Greater Dhaka Telecommunication Exchanges,

5 Chittagong Urea Fertilizer Factory,

6 Goalpara-Barisal Transmission Line,

7 Dhaka-Chittagong Coaxial Cable,

8 Development Loan through Banking System,

9 Electric Power and Gas Generating Barge,

10 Shipping Reinforcement,

11 Bheramara-Barisal Transmission Line,

12 Karnaphuli Rayon Plant,

13 Bakhrabad Natural Gas,

14 Kaptai Hydro Electric Power and Gas Plant (E/S),

15 Chittagong Urea Plant, Chittagong Urea Plant (II),

16 Kaptai Hydro Electric Power and Gas Plant (I),

17 Kaptai Hydro electric Power and Gas Plant (II)

18 Barge Mounted Electric Power and Gas Plant,

19 Gas Turbine Electric Power and Gas Plant,

20 Telecommunication Network, Greater Dhaka Telecommunication,

21 Chittagong Steel Mill, Chittagong Urea Plant (III),

22 Sylhet Combined Cycle Electric Power and Gas Plant.

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Bangladesh and is continuing to keep thatposition till today. The landmark of JapanODA is symbolized by JamunaMultipurpose Bridge, massive assistance inpower and telecommunication, andestablishment of fertilizer factories inaddition to host of other social sectordevelopment contribution. As a singlesector, Japanese aid has beenconcentrated mainly in infrastructure. Hi-Fibridge means Japanese aid supportedbridge.

Debt Relief:

On the occasion of thirty years of ODA, on21 March 2004 Japan government hasdeclared to waive its loan to Bangladeshworth about 158-billion yen (TK 8,395 crore)and both sides exchanged notes in thisregard. This debt relief was meant to use itfor poverty reduction purposes and socialsector development.

“Thirty years have passed since Japanextended its first Yen loan toBangladesh and it is a great honor forme to add one more page to the historyby signing the document on behalf ofthe government of Japan. By grant aidfor debt relief in the past, we could saythat Sonargaon Hotel became a giftfrom the People of Japan toBangladesh.. In addition, today’sagreement on the debt relief measure,such facilities constructed withJapanese ODA loans as BPDB’sKaptai Hydro-Power Station units (Nos.4 and 5), Fenchuganj Power Station,

Power Plant Barges and TransmissionLines, BTTB’s Greater DhakaTelecommunication Exchanges, BCIC’sChittagong Urea Fertiliser Factory, andPetrobangla’s Bakhrabad Gas Field willeventually become gifts from Japan.”Ambassador of Japan to BangladeshMastsushiro Horiguchi said.

Ambassador of Japan to BangladeshMatsushiro Horiguchi and EconomicRelations Division Secretary MirzaTasadduq Hossain Beg signed the notes onbehalf of their respective governments.Through the agreement, the Bangladeshgovernment has been exempted from therepayment of principals and interests forthe loan agreements signed with JapanBank for International Cooperation (JBIC)before 1988. The cancellation of thepayment will be made by JBIC every fiscalyear as the principals and interests fall due.

Trade, Infrastructure Development andEffective Demand

The role of Japan’s ODA in creatingeffective demand for the Japanesecommodities could be best illustrated bythe trade balance between the twocountries. While the trade relationsbetween Japan and Bangladesh continuedunabated since the early 1970s, there hasnot been any significant improvement involume and terms of trade between the twocountries in the past three decades. Thetotal volume of trade peaked US$ 600million. In other words, Bangladeshcontinued to have large negative imbalance

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of trade, imports constituting many-foldtimes than the exports, and there has notalso been significant increase in volume inreal terms. Infrastructure building,particularly roads and bridges, are veryimportant “help” from Japan. These areseen as symbols of prosperity anddevelopment, but for the rich and the elite.These contributions are called“revolutionary” and at times “monumental”.Japan government motivated multilateraldonors to fund the major project of JamunaBridge. In 1990 World Bank and otherdonors were expressing doubts on theviability of the project and there wereresistance in the country against thebridges for its negative environmental andsocial impacts.

Jamuna Bridge: An Example

The Jamuna Multi Purpose Bridge wasopened in 1996, an example that begsreviewing of the claim of ODA as‘monumental’ contribution. It is obvious thatsuch claims are not pro-people, and hasbeen transforming the biodiversity rich floodplain agro-economy into industrial zonesintegrating an unsustainable urbanizationthat is the major cause of social unrest,violence and serious problems ofgovernance. The rural population,particularly the poor are paying very highprice for this development intervention thatuses the magnanimity of the project torepress the irreversible negativeconsequences of such major interventionon a river that is the lifeline of the Bengal

delta. More than 105,000 people weredirectly or indirectly affected by landacquisition. People did not have the choiceof “not giving their land” when the Jamunabridge and the approach roads were built.After the bridge was built the continuousriver erosion due to heavy structure on theriver has been a yearly phenomenon. Eventhe Asian Development Bank, one of thefinanciers of the Jamuna Bridge, reportedas saying:

Jamuna Bridge, the icon of Japan ODA, is builtwith a yen loan. While the ‘development’ industryflags this bridge as an icon of their success, theenvironmental and ecological cost of suchintervention on the major river of a deltaic plainis highly questionable. The dislocation of thecommunities and misery that has been broughtto the life of the poor villagers has never beenassessed; their stories are suppressed by theroar of imported Japanese cars and vehicles.Interest of Japan in infrastructure building inBangladesh is directly related to its interest incar, telecommunication and other competitiveindustries

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“The directly affected households losttheir agricultural land, homesteadstructure, and/or properties, whileindirectly affected households, such asfarm/non-farm workers, tenantcultivators, squatters and uthulis anddestitute people who lost their land andhomes to flood and erosion disasters,lost their sources of income.Incomerestoration activities in the Project havenot performed well as yet. Two thirds ofthose interviewed are worse off thanbefore the project.”

This year during flood in July-August periodthe villages in the Jamuna bridge areassuch as Bhuapur in Tangail were badlyaffected. Besides the flood water, peopleexperienced severe land erosion and sandsiltation on the cultivable lands. This is adisaster for the thousands of farmers andthe cause of devastating economic loss tothe communities.

People in Bhuapur are severely affected byriver erosion and sand flowing over thecultivated lands. Farmers reported that theadjacent river banks of Jamuna near theJamuna Multi-purpose Bridge. They werealready warned of environmentaldestruction, therefore, were given a “bluecard” to each family for rehabilitation. Theynever received anything except the carditself. People have saved the card in thehope of receiving some help. There was nosign of any authority of the Jamuna Multi-purpose Bridge to deal with the displacedpeople. There are thousands of people on

the two sides of road in Bhuapur living inconditions like slum areas. They do notknow where they will go next.

Jamuna is 14km crossing of one of theworld’s great rivers and the bridge is 4.8kmlong. There is 15km of approach roads ateach end of bridge. Bridge carries four-laneroadway, 230kV electrical powertransmission line, 750mm diameter gaspipeline, as well as meter and broad-gaugerail track.

Built at a cost of about $950 million, theJamuna Bridge is one of the mostexpensive infrastructure facilities in theThird World. This project was opposed bymany groups on the grounds of potentialimpact on environment and fordisplacement of people. The potential lossof agricultural land, thereby livelihood anddisplacement of people were anticipated inthe early assessments of the bridge. Thenew railway line on the bridge is causingblockage of flood waters in certain areas.Water and soil are also polluted frommaterials used during construction.

And now at the time of the floods, peoplefaced severe erosion of their land. Thevillages are disappearing; the cultivatedlands are having piles of sand. Theremaining villages are also under threat oferosion.

People do not know what to do with the“blue cards”. Will they ever get anycompensation?

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Now Padma Bridge?

Takashi Sakamoto, who represented JapanInternational Cooperation Agency wasasked in a Press briefing in June this yearabout any JICA role to help mobilize fundsfor the proposed 6.1 km Padma Bridge.Sakamoto said “I am optimistic aboutJapanese support in this regard.” However,he said Japan alone can not provide the fullfund for the construction of the biggestinfrastructure. The World Bank, AsianDevelopment Bank (ADB) and Japan Bankfor International Cooperation (JBIC) areexpected to be major partners for theconstruction of the bridge, which isexpected to cost an amount of over Taka7,000 crore. “Padma Bridge project shouldnot be failed and it should be constructedat any cost,” he said. (June 17, 2004,BSS). This means, after Jamuna morebridges are being built with Japanesesupport. Padma, Jamuna and Meghna arethe major rivers of Bangladesh and thebridges over them will perhaps increase carimports but will have potentially destructiveimpacts on the poor people in terms ofdisplacement, loss of land and livelihood.Who is going to measure the economicvalue of such hardships?

Japan means cars and motor cycles

There is a general perception in the mindsof people that all cars come from Japan,although there are other car and vehicleexporting countries including US, Germany,India etc. In Bangladesh, population growthhas been seen as a major factor, but no

one looks at the growth of use of cars,which has increased tremendously over thelast thirty years. The annual growth rate ofpopulation is 1.8% while annual growth ofcars is 8%. According to a studyconducted by International Trade Centre,“there is a steady growth in the use ofvarious types of vehicles in Bangladesh.Reasons are increased polarization ofwealth in few hands, high degree of mobilityof people for different purposes, improve,bridge and culverts, roads and highways,etc. Increased trade, commerce and exporthave also created additional demand forvarious types of automobile. Demand ofconstruction vehicles and auto equipmentused in construction works also increasedto a great extent due to the increasednumber of on-going construction works bothin private and public sector. On top of that,the life style of the Bangladeshi peopleparticularly the middle class and elite in theurban areas have been changing very fastand improving, which has resulted ingreater movements and greater use ofvehicles in the country.”

Similar story is there with importedmotorcycle. There are at least 7-8 differentregular brands of motorcycle and these are:Honda CD 80, Yamaha, Suzuki from Japan,Xinfu, Jangshen, Jailing, Hero, TVS Victor,Yamaha, Suzuki, Bajaj, Vespa, etc.Motorcycle is extensively used inBangladesh in both rural and urban areas.

Increased demand, economic developmentand changed life style have resulted in agreat increase in the number of motor cars

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and the demand for motor cars is stillincreasing day by day. Both brand new andreconditioned cars are imported into thecountry. Statistics show that majority of thepeople usually prefer reconditioned motorcars more than brand new cars due tolower price.

In Bangladesh, more than 65% of the totalmotor cars are coming from Japan. ManyBangladeshis living in Japan involvethemselves in reconditioned car business.Recently, the government has put an agerestriction on the import of reconditionedmotor cars. Reconditioned cars more than3 years old cannot be imported.

Products category Brand names

Heavy Bus Hino, Mitsubishi, Isuzu, Volvo, Tata,Ashok Leyland, etc.

Mini bus Hino, Mitsubishi, Isuzu, Toyota,Sawraz Mazda, Tata, Eicher, etc.

Microbus Nissan, Mitsubishi, Toyota, etc.

Heavy truck Hino, Tata, Bed Ford, Isuzu, AshokLeyland

Mini Truck Hino, Tata, Mitsubishi, Isuzu,Toyota, Eicher, Sawraz Mazda, etc.

Motor Car Toyota, Mercedes Benz, Nissan,Mitsubishi, Ford, Suzuki, Dewoo,Proton Saga, Proton Vira, Hyundai,BMW, Maruti etc.

Four wheels Toyota, Tata, Mitsubishi, Nissan, etc.

Auto tempo Bajaj, Krishan

Scooter Bajaj, Krishan

Motor-cycle Honda, Xingfu, Jialing, Jangshen,Yamaha, Suzuki, Hero, TVS Victor,Bajaj, Vespa, etc.

Light & heavy Nissan, Dewoo, Huyandi, Volvo,commercial vehicles Ashok Leyland, Tata, Hino,

Mitsubishi, etc.

Farm and agricultural Hyundi, Dewoo, Dongfang,vehicles Dongchang, etc.

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The government has also reduced theduties and taxes on the import of new carsto discourage reconditioned car import.

Micro-credit: Japan’s credit orwomen’s?

Micro-credit programmes, i.e. lending ofsmall loans with high interest rates andweekly repayment systems has becomeanother icon of success of Japan’sdevelopment support. Bangladesh is knownfor flood at the international level, and now,the micro-credit has made Bangladesh veryfamous all over the world. More than 1200NGOs are engaged in disbursing micro-credit to over 11 million borrowers, 85% ofthese borrowers are women. GrameenBank made the initial model, which hasbeen replicated and remodeled by other bigNGOs such as BRAC, Proshika, ASA andhundreds of other NGOs. In thedevelopment field, working with womenmeans giving them micro-credit. Otherforms of social development aredisappearing. The high repayment rate andthe focus on women is a “success” in

papers of the micro-credit givingorganizations but in real lives of women thishas become an additional cause of violenceagainst women.

Economically, micro-credit has also provedto have failed in reaching the poorestpopulation. The bottom 15% of thepopulation are out of micro-credit, also thesick, disabled and the destitute are not“good candidates” of micro-creditprogrammes. So what kind of povertyalleviation does micro-credit programmecan claim?

Japan is showing mobile phone in a poorwoman’s hand as a sign of development, isthis really so? Grameen phone is anationwide network connecting the entirecountry through telecommunication andthey have created phone-ladies and takingcellular phones to others’ door steps toprovide services to them. According toGrameen statistics there are 70 thousandGrameen Cellular phone ladies in the ruralBangladesh. The bank’s latest idea is toarm beggars with mobile phones so theycan sell services to others. Each mobilecost $225 repayable during two years ininterest free installments plus the paying forsubsidized monthly service. This is veryinteresting way of selling corporateproducts through the poor. In reality hardlyany phone ladies are running their owntelephone business. In the rural areas,there are mobile phone shops which are runby young men, the sons, brothers andhusbands of the phone ladies.

Women using a cellular phone provided byGrameen Bank (by Mr. Salahuddin Azizee)

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Japan has other social supportprogrammes, but when cellular phonebecomes the icon of development then thequestion raises whether Japan is helpingthe company or the women?

Conclusions

For Bangladeshis, to see Japan playing apositive role in South Asia is still a generalexpectation. If Japan is interested only inits commercial interest, disregarding thepeoples’ priorities, it will be very unfortunategiven the increasing economic, social andcultural antagonism and contradiction of theoccident with the orient. The socialorganizations of Japan and Bangladeshmust join hands and collaborate to achievethe following:

1. A greater understanding through frequentexchange and education tour at people topeople and community to community levelto highlight the commonality of culture,positive religious and spiritual synergies inorder to identify the unique features of Asiaand the reciprocal role of the peoples of twocountries. The development paradigm andthe policy must be informed by theseunderstanding so that people of the twocountries could understand each otherbetter. The migrant community inBangladesh could play a bridge andsocially conscious and responsible youth ofJapan could play a very effective role.

2. Media projection and propaganda againstBangladesh by certain quarters and oftenpicked up by Japan’s ODA policy thinkingshould be interrogated. Bangladesh is rich

in popular grass-root culture, naturalresources, biodiversity and an excellentexample where various religions, cultures,ethics and values have mingled to createconditions for new ideas for Asia and thewhole world. The struggle of Bangladeshipeople against communalism of variousexpressions and the inappropriate politicalexpressions against the injustice doneagainst Palestine, Afghanistan and Iraqshould be understood in a real life contextand opportunity should be created to reflowthe energies for constructive engagement.Majority of the people are Muslim, butretaining.

3. Japan has an economic stake inBangladesh and that could be best servedby mutual respect and a trade relation thatcontributes to enhancing the capacity ofthe country to participate in the globalexchange of her products.

4. The people affected by infrastructuredevelopment must be compensated. Japanmust intervene with ADB and World Bankto give compensation to the victims ofJamuna Bridge. Only few people gotcompensation as token, majority peopleare holding the cards with only hopes thatdoes not seem to be fulfilled. This isunethical and must be corrected as agesture to people after 50 years of ODA.Debt relief depicted Sonargaon hotel as agift is not going to help the people, it is onlya luxury for the rich.

5. Using ODA as a means to createeffective demand for Japanese cars and

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APPENDIX

Bangabandhu BridgeFacts and Figures

Contractors

Main Bridge Construction Hyundai Engineering and Construction,Republic of Korea

Approach Roads Construction Samwhan Corporation, Republic of Korea

River Training Works HAM - Van Oord ACZ Joint Venture,Netherlands

Rehabilitation of East Flood AML-Monico, BangladeshEmbankment

Consultants

Construction Supervision Rendel Palmer and Tritton (UK),NEDECO (Netherlands), BangladeshConsultants Limited

Management Consultants Halcrow, Price Waterhouse (UK),

Engineering Planning Consultants\(Bangladesh),Rahman, Rahman and Huq (Bangladesh)

other commodities must be reviewed.Although such policies are financialdelights to the rich and elite of Bangladeshit is seen as a bad policy in line with otherwestern donors. The people of Japan andBangladesh must find a good andconstructive platform and principle ofcollaboration to review the effect of JapanODA on the livelihood, environment,

biodiversity and the overall effect on theeconomy of Bangladesh.

We are very eager and will be very happy towork with any social organization of Japanto develop a platform/network where wecould constructively engage policy makersof two countries to come close with theirpeople in order to facilitate review ofdevelopment paradigm and policy.

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Bridge Statistics

Length of Main Bridge 4.8 KilometersWidth of Bridge 18.5 metersNumber of Spans 49Number of Piers 50Number of Segments 1,263

River Training Statistics

Length of East Guide Bund 3.07 KilometersLength of West Guide Bund 3.26 KilometersVolume of Sand Dredged 22.55 million cubic metersWeight of Rocks Laid 1.5 million tons

Approach Road Statistics

Length of East Approach Road 14.76 KilometersLength of West Approach Road 16.94 KilometersBridges on East Approach Road 8Bridges on West Approach Road 6

Financiers

The Government of Bangladesh - Development Budget US$ 350millionThe International Development Association (IDA) (World Bank) US$ 200 millionThe Asian Development Bank (ADB) US$ 200 millionThe Organisation for Economic Cooperation and Development(OECF) (Japan) US$ 200 million

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References:

a. Thirty Years of Japan-Bangladesh Relations:Performance, Impact and Direction by Dr. M.Ataur Rahman Professor of Political Science &Director, Japan Study Center University of Dhaka

b. SOUTH-SOUTH TRADE PROMOTIONPROGRAMME: BANGLADESH SUPPLY ANDDEMAND SURVEY ON AUTOMOTIVECOMPONENTS August 2002, International TradeCentre, UNCTAD, WTO

c. About growth of cars: 1. Greater DhakaMetropolitan Area Integrated Transport Study,Working Paper No. 23. 2. BRTA (BangladeshRoad Transport Authority) (developed inCooperation with DITS and BBS.

d. Bangladesh: A Country Case Study December2002 by Lara Green and Donald CurtisInternational Development Department, School ofPublic Policy University of Birmingham B15 2TTUK Funded and commissioned by OECD (DACTask Force on Donor Practices)

e. Asian Development Bank, Operations EvaluationOffice, “Special Evaluation Study on the PolicyImpact of Involuntary Resettlement,” September2000

The Reality of Aid Asia-Pacific 2005Cambodia

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Sharing Experiences about ODA Japanfrom a Human Rights Perspective

Capital : Phnom PenhPopulation : 11.5 million

Area : 181,035 sq kmCurrency : Riel

Per Capita : 270Form : Constitutional Monarchy

Official Languages : Khmer

This paper gives a brief background toCambodia and its current reliance oninternational aid. It then introduces theNGO Forum on Cambodia and one if itsactivities, the Resettlement ActionNetwork. Finally, it gives a case study onthe use of Japanese aid for therehabilitation of National Route No.1,describes the concerns of the

Resettlement Action Network regarding therights of project-affected-people living alongthat road, and draws from the case studysome recommendations for Japanese aid.

I- History: Land of Cambodia

1- The Geography of Cambodia

NGO Forum on Cambodia

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The Reality of Aid Asia-Pacific 2005 Cambodia

A low-lying alluvial plain in the center ofCambodia makes up most of the country,although in the South there is the MekongDelta. There are several mountainousregions, one of which forms a border alongthe coastline with another separatingCambodia from Thailand.

The tenth largest river in the world, theMekong River, is the longest river inSoutheast Asia and the most importantriver in Cambodia. One of its importantuses is that it is navigable for most of its“run” through the country, as well as theMekong delta in the South.

Cambodia is also home to the largest lakein Southeast Asia, the Tonle Sap (GreatLake), which connects with the MekongRiver in Phnom Penh. The Tonle Sapenlarges to four times its normal size whenthe Mekong rises during the monsoonseason thus causing the Tonle Sap River toflow northward into the Lake.

During the dry season it reverses its flowand goes back into the Mekong River. As aresult of this, The Tonle Sap Lake is a greatresource for freshwater fish, actually beingone of the richest sources in the world.

2- People of Cambodia

Most of the people who live in Cambodiaare ethnic Khmer, averaging between 90-95% of the total population, makingCambodia the most homogenous country inSouth-East Asia.

Vietnamese make up one of the largestminority groups with about five percent ofthe population and Chinese make upanother one percent. The Cham, of Islamicfaith, are another significant minority group.Beside these, indigenous people groupsare living in the highlands of northeast ofCambodia and elsewhere. With one of thehighest population growth rates in Asia(2.5% per year), Cambodia had apopulation of a little over 11 million in1998.

3- Cambodian people and Land

Cambodia is a predominantly agriculturalcountry. About 80% of the population live inrural areas. The majority of Cambodia’spopulation (about 74%) is employed inagriculture and derive their livelihoods froma combination of agricultural activities andaccess to common property resourcessuch as forests and fisheries. This makestenure over agricultural land, and access toforest and fisheries areas of criticalimportance.

There is an increasing inequality in thedistribution of land holdings in Cambodia,with an estimated 20% of the poorestfamilies having no land and around 20% ofthe richest families holding 60% of availableland. The majority of landholdings aresmall. Only 10% of the families hold morethan 3 has. of land and it is considered thatrural families should own at least 3 has. ofland to derive sufficient income to meettheir livelihood needs. It was also found that


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families holding up to 0.5 ha. of land canparadoxically make people poorer thanlandless people because they are tied totheir land and commonly do not go to earnincome from other sources.

Post-colonial Cambodia (1953-1975)utilized the Western system of propertyownership, but the land privatization andcommercialization was limited. And duringDemocratic Kampuchea period (1975-1979), the Khmer Rouge collectivized allland of Cambodia.

In 1989, the government liberalized theeconomic system in favor of a free-marketeconomy. As part of these economicreforms, the government reformed theexisting land management system byreintroducing private property rights.Ownership, possession rights, andconcession rights were given to people.And local government reallocated land toprivate households. Under the 1992 landlaw, those who have been in legally validpossession of land for 5 years could beregistered as the owner of the land. But thisdoesn’t mean that all Cambodians ownedland.

In August 2001, the new land law wasenacted. Under this land law, land inCambodia is divided into 3 categories.1) State public property 2) State privateproperty 3) Private land.

A major difference between the old (1992)and new land laws (2001) is the removal oftemporary possession as a means of

acquiring land. The new land law says thatthere will be no recognition of the temporarypossession claims commenced after thelaw comes into effect. This means thatunder the new law one will not be able toacquire land by identifying a piece of landthat is not possessed by anyone andtaking possession of it for oneself.

Another significant change is that the 2001land law removed the limitation of 5 has. asthe maximum size of private land ownershipright. There is no more limitation on landsize for ownership right. This change hasallowed the concentration of land to someland owners.

Another difference between the old and thenew land law is the creation of SocialConcessions. This social land concessionallows poor landless people to obtain landsthat belong to the state. The social landconcessions are granted for free althoughother concessions are not. In addition, if asocial land concession recipient remainson the land for a period of five years, theycan convert the concession rights toownership.

4- Poverty and International Aid inCambodia

However, even though we receive a hugeassistance, both grants and loans, frominternational aid agencies and multilateralbanks, Cambodia is one of the world’spoorest countries. Its GDP per Capita isstill only $ 270, lower than that of mostother ASEAN Countries. In 1994, the

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Stung Slot new relocation community caused byHighway1 Development Project of ADB

number of people living under the povertyline was 39%; in 1997 it was reducedto 36%; and in 1999 was 35.9%. For thelast 5 years, the poverty figures have notbeen updated. Now, the number of peopleliving under the poverty line is almost 5million, which is much too high consideringthe huge amount of aid which Cambodiareceives. Japan is the biggest donor givinggrant assistance to Cambodia.

The ADB is aggressively promoting theprivatization of natural resources through itsmarket-based programs for “povertyreduction”, resource extraction andinfrastructure development. Much Japaneseassistance focuses oninfrastructures: e.g. bridges,national roads, irrigation, healthcenters and others. On aglobal scale, the World Bankhas promoted a series ofinitiatives under the banner of“market-assisted” or“negotiated” land reform, thatconsist of supporting alienableland titles. Rather thanimproving access by the poorto land in any significantmanner, these initiatives areactually worsening thesituation in many places, as families andcommunities already marginalized fromeconomic potential are forced to rely onmarkets that they have no control over foreven the most basic subsistence.

Unlike its neighbors Thailand and Vietnam,Cambodia still has no formal support

systems for the poor: no nationalresettlement law, no housing board, noministry of housing, no legislativemechanisms for regularizing informalsettlements, no government programs toprovide basic services or to supportpeople’s efforts to improve conditions intheir settlements. There is no housingfinance to any sector – poor or middleclass. And the municipality, which hasbeen overburdened with challenges such asflood control, crime and economicdevelopment, has been unable to respondto the needs of the city’s growing poorpopulation. On the other hand, because thecountry has for so long been considered

one of the world’s development basketcases, it has been bombarded withinternational agencies and development aid,which intervenes in virtually everyconceivable sector of the country’sdevelopment and governance. All thisexpertise and all this aid money has


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certainly done a lot of good things forCambodia, but it has also left the wholecountry – the urban poor included – in thebegging mode, waiting for hand-outsinstead of finding space for their ownorganizations and their own solutions toevolve.

II- About The NGO Forum on Cambodia:

The NGO Forum, made up of local andinternational non-governmentalorganizations, exists for informationsharing, debate and advocacy on priorityissues affecting Cambodia’s development.

Background

The NGO Forum on Cambodia had itsbeginnings in the 1980s in an internationalNGO campaign to advocate an end to theaid embargo then imposed on Cambodia.Since then, the NGO Forum has continuedto evolve in response to changing externalconditions.

Following the full restoration of developmentaid in 1993, the NGO Forum became moreCambodian based. It began to work on abroader range of issues, such as aninternational ban on land mines, creation ofa permanent tribunal for crimes againsthumanity, and concerns about the impactsof development aid. It appointed arepresentative in 1995. Although based in

Phnom Penh and focusing increasingly ondomestic advocacy issues, the NGOForum was still dominated by expatriates.An International Steering Committee wasretained until 1996, after which the localManagement Committee became the chiefdecision making body.

From 1997 to 2001, the NGO Forumbecame much more Cambodian incharacter, with meetings heldpredominately in Khmer and withCambodians playing the dominant role inNGO Forum activities. This reflected thegrowing level of responsibility taken byCambodians in both local and internationalNGOs. A five-year Strategic Plan, adoptedin 1999, reflected these changes. TheNGO Forum also expanded its staff in orderto meet more effectively the expectations ofmember organisations. It began to improvecooperation with NGOs based in theprovinces, and to help NGOs buildadvocacy-linkages from the grassroots tothe national level. Issues dealt with overthis time period included the landminescampaign, the environment, the impact ofdevelopment banks, women’s rights, thegrowth of civil society and democracy, thestrengthening of advocacy skills, and theneed for policy makers to have easyaccess to information about Cambodia.

The Action Plan for 2002-2003 focused onstrengthening NGO Forum’s work on alimited number of priority issues. Thesepriorities were chosen for their importanceto Cambodia’s development and for theunique role that the NGO Forum is able to

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play on these issues. One of the projects,the Fisheries Livelihoods Project,underwent a process of separation fromNGO Forum to become a separate NGOentitled the Fisheries Action CoalitionTeam. In mid-2003, the NGO Forum begandiscussions on its plan for 2004-2005.

The NGO Forum has maintained anexcellent reputation with the local andinternational media and representatives ofbilateral and multilateral organizations. It iswell respected among its internationalnetwork of supporters. As one of the twolongest standing NGO umbrella groups, ithas a presence with Cambodiangovernment officials and its work has beenwell received in the internationalConsultative Group process.

MissionThe NGO Forum is made up of local andinternational non-governmentalorganizations grounded in their experience

of humanitarian and developmentassistance to Cambodia. The NGO Forumexists for information sharing, debate andadvocacy on priority issues affectingCambodia’s development. The NGO Forumhas an important role to highlight theimpact of development processes andeconomic, social and political changes onCambodians.

Vision Cambodia will have a well-informed andempowered population participating in astrong and vibrant civil society, to thebenefit of poor and vulnerable people inCambodia.

Goal For the Action Plan 2004-2005, the NGOForum is focused around a single goal: The rights of poor and vulnerable groups inCambodia are recognized and supported bythe policies and practices of Cambodia’s

Organisational Chart of the NGO Forum on Cambodia


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government and donors, and by the widercommunity.

III- Background of Resettlement Projectof NGO Forum:

Background

The NGO Forum has been raisingresettlement issues in its dialogue withmultilateral development banks since atleast the year 2000. In 2002, a group ofNGOs requested that the NGO Forum stepup its work in this area by forming an NGOworking group to focus specifically onresettlement issues. The ResettlementAction Network (RAN) was formed, with acommittee of eight NGOs (RAN/C) leadingthe activities. The group has so far hadsome considerable success in trainingNGOs in how to support resettledcommunities and in seeking justice forresettled people.

Problem Statement

Cambodia is undergoing rapid development.New or upgraded roads and urbandevelopments can end up forcing people torelocate or lose their sources of livelihood.Road improvement projects are being usedto enforce right-of-way legislation, and theland rights of project-affected-people areoften unclear. The government’s nationalresettlement policy is not yet in place.Donors and multilateral development bankshave their own resettlement standards, butthese are unlikely to be enforced unlessthere is effective monitoring and project-

affected-people are given a chance tospeak out about their situation.

Currently, there are many serious landconflicts between land owners, bothgovernment land and private land (individualand company land), and poor people; manyof whom have been living in their presentlocation since 1979 (i.e. since the fall of theKhmer Rouge). People are now fighting toprotect their land.

There are many cases of land beingacquired for

Road expansion for example thenational road improvements in thecountryside

River bank development

Long term land concessions

Public garden development

Market construction, and bus terminals

Railway track expansion

Hydro-electric dam construction

International airport construction

Entertainment complex construction

Angkor-period archeologicalconservation

Real estate investment

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Purpose

NGOs cooperate to protect the rights ofpeople affected by resettlement andrelocation so that they are fairlycompensated and are not worse off thanbefore.

Contributing factors include the following:

1- Network participants have increasedcapacity in lobbying and advocacy skillson resettlement and relocation issues.The Resettlement Action Network (RAN)members intend to explore a variety ofmethods to improve their knowledge andskills on resettlement and enable themto advocate more effectively.

2- The Resettlement Action NetworkCommmittee (RANC) membersfrequently visit relocation areas, meetingwith affected people and listening totheir problems. Besides that, the RANCorganizes trips for government, ADB andother officials to visit the sites ofunresolved problems. Through theseactivities, the affected people will gainbetter confidence and have a chance tospeak out about their problems causedby relocation.

3- Resettlement and relocation issues arebrought to the attention of multilateralbanks/donors, governments, and otherrelated stakeholders.

4- Gender is considered and represented inthe project.

Japanese Aid to Cambodia

The Case of National Route 1 RehabilitationPlan in Cambodia

This case study focuses on theexperiences of Cambodian NGOs workingto protect the rights of people suffering fromroad development projects, in particularNational Route One (NR1) RehabilitationProject. A section of this road is to berehabilitated with funding from the JapanInternational Cooperation Agency. It willdescribe the concerns of civil society aboutthe NR1 project, as well as theirexperiences of advocacy towards thegovernment of Cambodia and JICA. Thepaper will also touch on some generalissues regarding Japanese aid toCambodia.

Under the framework of the Greater MekongSubregion (GMS), which aims to increaseconnectability among the Mekong Basincountries, various road rehabilitationprojects are being promoted and financedby aid agencies in Cambodia. NR1 forms apart of the Second East-West economiccorridor plan, which will connect the majorcities in 3 countries, Ho Chi Minh City inVietnam, Phnom Penh, the capital ofCambodia, and Bangkok, the capital ofThailand. NR1 is a 166km road betweenPhnom Penh and Ho Chi Minh City. Thesection between the east side of theMekong River up to Ho Chi Minh City hasalready been rehabilitated with thefinanciale support of the Asian DevelopmentBank (ADB). Rehabilitation of the section


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from Phnom Penh to the west side of theMekong River is proposed to be financedwith the grant aid of the Japanesegovernment. Currently, the JapanInternational Cooperation Agency (JICA) isconducting studies.

Precedent: Resettlement andImpoverishment of Communities in theADB-Funded Section

NGOs in Cambodia, namely theResettlement Action Network (RAN)consisting of around 20 NGOs working onhousing rights and resettlement issues,have been working together with

communities who have suffered andexperienced great pain from therehabilitation project of NR1 funded byADB. This ADB-funded NR1 rehabilitationresulted in relocation of approximately 1200households (approximately 6000 people)who were living within 30 meters from thecenterline of the road (within a band 60meters from side-to-side) even though theactual width of the new road is only around14 meters. The loan from ADB wasapproved in December 1998, andresettlement of the communities began inFebruary 2000. These communitiesbecame severely impoverished, as they did

GMS Road Plans

National Route 1 (NR1) Rehabilitation Project

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not receive sufficient or full compensationfrom the Cambodian government. Peoplenot only lost their assets and places to live,but also community networks, proximity toschools, graves of their ancestors, and theirlivelihoods, etc. Many also became deeplyindebted from the resettlement. Somecommunities are still refusing to relocatefearing the grave and irreversibleconsequences to their lives.

Based on an NGO survey of 99 affectedhouseholds in 2002, it was recognized thatvarious losses resulting from the project,including loss of livelihoods, houses,moving costs, were hardly compensated.The scope of compensation was verylimited, and the payment was notappropriate. The Cambodian governmentofficials reportedly told the affectedcommunities that the small amount of cashthat the government was delivering to thecommunities shall not be considered“compensation”, but simply a “contribution”to the relocation cost. What was criticallydamaging to these affected communitieswas that the Prime Minister’s Edict issuedin 1999 titled “Elimination of AnarchicalLand Grabbing” declared that the landwithin 30 meters from the centerline of theroad is public land or the “Right of Way(ROW)”. In 2000, the Ministry ofEconomics and Finance (MEF) declaredthat the government can evict people wholive within this ROW without anycompensation. Communities who wereliving in this area thus became “illegaloccupants” overnight, and no compensation

for the loss of land was provided to thesecommunities.

Calling people within the ROW “illegaloccupants” who do not deservecompensation, however, could be said assimplistic and immoral as well as legallyquestionable. Firstly, the 1999 Edict and2000 MEF Declaration were issued afterthe loan for the road construction wasapproved and the necessity of landacquisition became evident. It should benoted that the communities along NR1before issuing of the 1999 Edict did nothave a legal problem with their occupancy.Most of the communities have lived on theland long before the Edict and some evenhad receipts from application of landownership. Full legal title is uncommon inCambodia, as systematic titling efforts havejust recently started. In other words,communities were suddenly told that theirland use is “illegal” at the time ofconstruction and evicted. During KhmerRouge period, from 1975 to 1979, privateproperty was abolished and all land wasconsidered public. According to a recentNGO survey of 250 people living along NR1between Phnom Penh and the MekongRiver, many of the people living along NR1settled there after the fall of the KhmerRouge, during the period of theVietnamese-backed government. The samesurvey suggests a steady increase ofresidents between 1979 and 1989. Thosewho moved prior to 1989 should haveownership of the land, as the Council ofMinisters declared in 1989, that occupants


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as of 7 January 1989 are the owners of landand ownership prior to 1979 is denied.Therefore, NGOs consider that the ROW of60 meters should not apply to a populousarea.

Another significant problem with the projectwas that, during the formulation andimplementation of the project, informationdissemination to the communities wasscarce, and participation of thecommunities to decision-making washardly ensured. Not only did thecommunities not have opportunities to voicetheir opinion about the compensationcontent, they were told to give thumbprintson the documents approving their relocationand compensation amount with hardly anyinformation about the project or their rights.In addition, there were reports of humanrights violations, including demolition ofhouses by bulldozers when a residentcould not remove their assets and relocatedue to their illness before the deadline setby the government. The sufferings faced bythe communities are still largelyunaddressed by both the Cambodiangovernment and the ADB.

It is relevant to mention that theseproblems occurred despite the highstandards and procedures of the funder, theADB. The ADB has many internal policiesthat should govern the project duringformulation and implementation, ensuringpublic participation in decision-making, andconsideration of social and environmentalimpacts of projects. One of these policiesis specifically on resettlement, which

provides that involuntary resettlement ofpeople should be avoided, and if it isunavoidable, proper mitigation measuresshould be employed to prevent thecommunities from becoming poorer thantheir pre-project condition. Unfortunately,the ADB failed to enforce their own policiesand to supervise the Cambodiangovernment properly.

Lessons NOT learnt: Plan by JICA

The rehabilitation of the remaining sectionof the NR1 is proposed to be funded by theJapanese Government with grant aid. Uponthe completion of JICA’s studies and theagreement of local communities forrelocation and compensation content, theJapanese government is to decide whetheror not they will commit to financing. Thesection of NR1 proposed to berehabilitated, from Phnom Penh to MekongRiver, includes urban and denselypopulated areas. The present road width isaround 10 meter at its narrowest points.JICA’s Feasibility Study published in March2003 proposes great expansion of the road;21 meters to 24 meters in urban areas and10 meters to 14 meters in rural areas. Theplan also includes increasing the height ofthe road, which is located in the floodplainof the Mekong and Tonle Basaac Rivers.This means that large areas of land, muchgreater than the proposed road width, willbe needed for the embankment slope andthe maneuvering of bulldozers to constructit. The JICA Feasibility Study writes thatthere exist 1806 houses within 15 metersfrom the center of the road. The number of

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people who would be affected by the projectis expected to be much larger than thisnumber, as more than 15 meters from thecenters of the road would be required forthe construction in some areas. Often morethan 1 family live in one house, and peoplehave large families. There is no officialfigure provided by JICA or the Cambodiangovernment; however, a simple estimationcould be more than 10,000 people affectedby the project.

Besides the nightmarish figure, what is ofdeep concern is that the 2003 FeasibilityStudy completely ignores the problems andsuffering of people that occurred in the ADBfunded project. The scope and rate of thecompensation, as well as the proceduresfor resettlement, proposed in the JICAFeasibility Study are similar to those of theADB funded project. The implementingagency in charge of the resettlementproposed, the Inter-Ministerial ResettlementCommittee, is also the same. It alsoconcludes that the local communities are“illegal occupants” who do not deservecompensation for land, and that they cansimply move away from the road. Inconclusion, the Feasibility Study writesthat: “…there are neither substantial norirreversible adverse environmental andsocial impacts arising from the Project. Noadverse social impact is expected becausethe project only involves the improvement ofexisting roads and no land acquisition forroad right-of-way is required additionally”(Feasibility Study, Chapter 17 conclusionand recommendations).

Economic Growth: QuestionableEconomic Benefits and Needs

It is true that establishment of roadnetworks could bring social improvements,such as medical and health services inlocal areas, reduction of traffic jams andpromotion of tourism. It cannot be simplyconcluded, however, that the constructionof wide highways connecting cities wouldencourage economic growth. Especially fora country like Cambodia, which couldpotentially be a mere transition point orimproved connection between two morepowerful neighboring countries and forwhich improved transport could aggravateits trade deficit, careful considerationshould be given to whom the project wouldbenefit and to whom it would disadvantage,and to the project’s negative impacts suchas involuntary resettlement of localcommunities.

The Feasibility Study proposes to expandthe NR1 to a 4 lane road. (In the urbanarea, an additional area worth 2 lanes willbe secured in the center of the road forfurther expansion in the future). However,the need for and benefit of the road arequestionable for the following reasons. Oneis that investigations into the currentsituation regarding traffic volume or reasonsfor use of the road were undertaken for aday to one week, which is far from sufficientto determine the need for a bigger road.

Secondly, the economic benefit of the roadis also questionable. The Feasibility Studyemphasizes the significance of the


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proposed project by stating that the projectwould contribute to economic developmentand poverty reduction through improvedconnection between production andconsumption sites. What the study failedto demonstrate, however, is how improvedconnection between Ho Chi Minh City andPhnom Penh would impact the country’seconomic growth and poverty reductionusing specific data and analysis.Cambodia suffers from a chronic tradedeficit, and depends on imported productsfor daily products, even fruits. In year 2001,Cambodia’s exports to Vietnam werevalued at approximately US 279,000dollars. About a quarter of its imports,totaling approximately US 149 milliondollars, came from Vietnam. Thesestatistics are for total trade and not only ontrade using the NR1; however, it can bespeculated that a large road connecting themajor city in Vietnam to the capital ofCambodia would contribute to an increasein imported products from Vietnam due tosmaller transportation costs, and thus anincrease in Cambodia’s trade deficit.Furthermore, those who would benefit fromthe improvement of the road may mostly bewealthy, which could widen the discrepancybetween the rich and poor in Cambodia.

Thirdly, although the Feasibility Studyclaims that the project would bring benefitsto the local communities, rendering anarrow bumpy road into a smooth highwaymay have adverse impacts on communities’lives and livelihoods. In the case ofNational Route 7, construction of whichwas also funded by ADB and already

completed, communities reports anincrease in traffic accidents and a decreasein income due to relocation of their smallshops farther away from the road and thefaster speed of the vehicles which no longerstop at their shops. Also, for the betteraccess to hospitals and health centers for80% of population in rural areas,improvement of smaller scale rural roads ismore effective and necessary.

Therefore, although the NGO Forum onCambodia does not oppose therehabilitation of the road, we believe thatthe decision to fund the project should bebased on a more thorough analysis of thecosts and benefits.

NGOs Advocacy towards Japanesegovernment and JICA

NGO Forum on Cambodia, in collaborationwith many local and international NGOs,are now working with communities who willbe negatively affected by the NR1 project,and conducting advocacy towards thegovernment of Cambodia and Japan, andJapan International Cooperation Agency(JICA). Drawing from problems thatoccurred in past road projects and thesubsequent sufferings of people, NGOshave conveyed concerns and maderecommendations to the decision-makers.We have written letters to the Japanesegovernment, informing them about whathappened in the ADB funded part, andasked Japanese government to study thecauses of the problems and situations inADB funded part and prepare appropriate

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measures so that the same suffering ofpeople would not be repeated.

Japanese Ministry of Finance (MOFA) alsodid not consider that the social impacts ofthe project were appropriately considered inthe Feasibility Study. MOFA ordered JICAto conduct an additional study. JICA’s newSocial and Environmental Guidelines(hereafter “the new Guidelines”) came to beapplied to the project, even though theproject was requested to the Japanesegovernment prior to the establishment ofthe new Guidelines. We received a letterfrom JICA Tokyo office that they will makesure that similar problems will not happen.

[*** What did JICA then do, regarding publicconsultation and awareness raising? ***]

In late August 2004, NGO received ananonymous phone call from a localcommunity member, seeking help. He toldus that he was forced into agreeing withrelocation and to a small compensationamount for loss of his house. He reportedthat when he attempted to disagree, thegroup consisting of local authority andpolice threatened him saying that if hedisagrees, the government would come anddemolish his house and he would not onlynot receive compensation but also have topay for the cost of bulldozer. Although JICAtold NGOs that those who would have torelocate would receive substitute land fromthe Cambodian government, communitymembers to whom we spoke have not beenpromised land. Many already agreed andgave their thumbprints. Community

members have told us that they havenowhere to go and the compensationamount is not enough, but they do notknow to whom or how to complain. Somesay they will not complain, fearingrepercussions. Some have been told that ifthey want to complain, talk to the PrimeMinister. In conclusion, JICA and theJapanese government have so far failed tolisten to the voices of NGOs andcommunities, learn from the past mistakes,or prepare appropriate measures to protectthe rights of the people and ensure thebenefit of the NR1 project to Cambodia.

Conclusion

Drawing from our experiences in examiningthe NR1 rehabilitation project andconducting advocacy towards JICA and theJapanese government, the followinganalysis,we consider to be applicable toJapanese aid in general. The needs andpriorities of the project for the benefit ofCambodia is not adequately consideredwhile the importance of roads to economicdevelopment are perhaps over-emphasized.Negative impacts of the projects are notfully studied; thus mitigation measures,including human rights protection, are notprepared or appropriate. Developmentobviously brings benefits, but what groupsare receiving benefits and what groups aresuffering should be considered. InCambodia, the former groups tend to bethose with power and connections, whereasthe latter are the poor.

Communities are not given information orable to participate in the decision-making of

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The Reality of Aid Asia-Pacific 2005

the project. At the same time, theCambodian government’s implementation isnot sufficiently supervised and the need tohelp capacity building of Cambodiangovernment officers as implementers is notsufficiently recognised by the Japanesegovernment or JICA. Furthermore, theJapanese government, in general, seems tohave concerns for its own nationalistinterests, exemplified by “tied aid”, andhave a very lenient attitude towards theCambodian government, valuing diplomaticrelationships with the current regime overhuman rights of the Cambodian public andthe sustainable and equitable developmentof Cambodia.

If Japan seeks to effectively assistCambodia, it needs to understand thatdemocracy in Cambodia is still at an earlystage; thus, it is essential that not only thegovernment but also various stakeholders,including the civil society and localcommunities, are consulted duringplanning, implementation, monitoring andevaluation of developments. Japan shouldalso prepare appropriate and effective waysto strictly supervise the government’simplementation of projects funded byJapan, and ensure that the most effectiveinstitutional arrangements are used basedon accurate and realistic assessments.Since Japan is the largest donor toCambodia, it already has great impacts onCambodian politics as well as influenceover the poor human rights situation andlack of democracy. Proactive interventionby the Japanese government to promotedemocracy and human rights is needed.

Lastly, “aid” to Cambodia should be basedon the interests of the people of Cambodia,especially the large portion of its populationwho live under poverty but currently lackaccess to the benefits of development.Perhaps what is needed is improvement inthe quality of aid as opposed to thequantity of aid. Since Japan contributes alarge amount of money to the Cambodiangovernment every year, Japanese aidinfluences our lives in all aspects, includingpolitical, economical, social, andenvironmental elements. Improving thequality of aid would not only bring usprosperity but also could indirectlycontribute to raising awareness of thegovernment and people about and improvinghuman rights and democracy.

Cambodia

References:

Background of NGO Forum on Cambodia

Background of Resettlement Action Network (RAN)

Land Ownership, Sales and Concentration inCambodia: A preliminary Review of Secondary Dataand Primary Data from Four Recent Surveys,

Cambodia Development Research Institution (CDRI)

Land, Rural Livelihoods and Food Security inCambodia, Seminar Proceedings (CDRI)

Cambodia countries, Great Mekong Subregion

The improvement of National Road No.1 (PhnomPenh – Neak Leung Section) Pacific ConsultantsInternational / JICA

East-West Management Institute, Inc. (2003), LandLaw of Cambodia, A Basic Law Guide for Studentsand Practitioners, Phnom Penh

Housing by people in Asia: Starting from scratch inPhnom Penh,

Asian Coalition for Housing Right (ACHR)

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India and Japan established diplomaticrelationships in April 1952. Both countrieswere then in a period of transition. Themajor efforts were to build a future societyand nation. Both countries had a history ofmillennia of civilisation, strong traditions,and social structures unique to themselves.The project for nation building had toappropriate the positive aspects of thelegacy as well as elements that were partand parcel of the people’s lives andpsyches. Both countries also had episodesof recent history to undo – not just forgetbut to actively erase from operationalrealities of the nation building project – andto ensure that they left no permanent scarson the future and more important did notrecur in the future.

India had gained independence only inAugust 1947 – and emerged for the firsttime in history as a modern nation state.Independence was for India a mixedblessing – the colonial rule had ended andBritish imperial regime had ceased to exist.The transfer of power had however led to

Japan-India Economic Cooperation:

the partition of the country. The basis of thepartition was unfortunately religion. Thepartition even more sadly was not smoothor amicable. It was accompanied byunprecedented inter-religious violence.Brutal violent incidents including killingsand rapes and destruction of propertymarred the independence celebrations ofboth India, and the newly created nation ofPakistan. Massive transfer of populationwith a dislocation of millions of people alsotook place during this event. Despite theimagination of the colonial masters theprocess was not smooth or final. Millionsstayed in the ‘wrong country’ – particularlyIndia.

Japan had just emerged from the world war– the inhuman nuclear bombing ofHiroshima and Nagasaki, the ‘occupation’(thank god it wasn’t like the Iraqoccupation) – and was in the throes of thebirth of a new nation. It is perhaps alsonecessary to admit that the occupation bythe victors of a war in effect subvertedrather than aided a process of ‘overcoming’.

Ambiguous Realities, Ambivalent SignalsDr. Sandeep Pendse

Vikas Adhyayan Kendra

The Reality of Aid Asia-Pacific 2005India

92

The new disposition had more to do withdictates of occupiers rather than ademocratic churning of the society and atrue ‘appropriation’ of even the immediatepast.

The experimentation in both countries –Japan and India - was with independentmodernity and capitalism.

Pre-colonial India was definitely feudal – ofcourse with an Indian twist, in the sensethat the feudalism was not comparable toEuropean feudalism. The industrialisationduring the colonial period was not at allpropelled or directed by ‘national’ factorsbut by the needs of the economy andindustry in the metropolitan imperialcountry – Britain. The entire economic(along with political and administrative)structure was colonial.

After independence too the Indian look wastowards the west. The basic interest was inthe attitudes of Britain and later US.Culturally and educationally too the gazewas at Oxbridge. Politically the leadershipof independent India followed a path ofsolidarity of the underdeveloped countries –then newly independent. It was to laterbecome the Non Aligned Movement. TheAfro-Asia conference at Bandung,Indonesia became the precursor of whatwas to later become a firm third world bloc.India, more or less with the rest of thisbloc, also leant towards the USSR and atleast for a brief period towards the PRC.

The reasons were multiple. India sought

relations apart from those with the imperialmasters and their allies. It foundadvantageous deals with the USSR – till itdiscontinued to exist. There were alsosignificant political reasons. The principalones were – the dispute over Kashmir withPakistan in which the western powers tooka position against India, the Suez Canaldispute in which the developing newlyindependent countries were seen asvictims, and the independence of Indonesiathat was seen to expose many claims ofthe western countries. The relationship withwestern countries was hence ratherpeculiar – there was an economicdependence, the aid and investment didcome from the west at least in theimmediate post-independence period butpolitically the western powers were nottrusted.

Japan and India

There was no baggage of history betweenJapan and India.

There were probably no firm opinions abouteach other in the two countries.

India had not experienced the war. It hadonly come to the doorsteps. Japaneseforces had come to Burma (now Myanmar)and almost into the north-eastern states ofIndia. This intrusion was offset by theformation of the Indian National Army (INA)led by an anti-British charismatic hero –Netaji Subhash Chandra Bose which drewmost of its support from wartime Japan.

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The Reality of Aid Asia-Pacific 2005 India

Nevertheless, and this remains true despitethe statistics to be cited later, there wasnot any great impression about Japan andrelationship with Japan.

Even today, one must admit, theawareness about and interest in Japan isquite low in India.

Economic Relations

Economic relations between India andJapan were established in 1958. Japan wasa member of the first International Aid IndiaConsortium under the aegis of the WorldBank.

The economic relations consist of OverseasDevelopment Aid in the form of grants andloans, Foreign Direct Investment, andForeign Trade.

Japan India Economic Relations

A few points need to be made immediatelywhile discussing economic relationsbetween India and Japan.

The relationship is quite old (since 1958).Japanese ODA is important in India. It hasa large quantum and is involved withnumerous major projects in the country.The annexure puts forth the statistics.Nevertheless the perception aboutJapanese ODA – or even awareness – isfairly low in India. The most visible project –because of its very nature – is theunderground metro railway in the capitalcity, Delhi. This is a recent development.Prior to that very little discussion ofeconomic relationship with Japan could be

found even in the financial newspapers ofthe country. The exception perhaps was theSuzuki involvement in the automobilecompany – Maruti Udyog Ltd. This ofcourse is not an example of ODA but ofFDI.

The relationship has seen many ups anddowns – principally for non-economicreasons. During the years of the cold warJapan was wary about India’s relationshipwith the USSR, its attempts to distanceitself from the US camp, and its efforts toforge a Non Aligned Movement. After thedisintegration of the USSR and the end ofthe cold war the relations began to improve.Effort of the Indian government to liberalisethe economy was also one of the majorreasons. The aid was completely stoppedin 1998 when India test-exploded nucleardevices. The aid was three years later –first as disaster relief in the wake of adevastating earthquake and subsequentlyfor other projects.

There is actually no historical baggage ineconomic relations with Japan. India wasnever under any imperial sway by Japan, sothe question of historical drain does notenter into the picture. The ODA loans are atvery low rates of interest and with a longspan. Thus they have not been odious.

The Japanese vision of Indian economy asexemplified in its 1995 India country reportis however thoroughly neoliberal and comesup with the same prescriptions for thecountry that the WB-IMF combine does.These are highly questionable.


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Trade with Japan (bil. Yen)

Imports Exports

1995 238.0 274.5

1996 264.7 309.3

1997 267.7 322.1

1998 314.4 284.8

1999 275.5 255.4

(Source: Ministry of Finance)

Loan AidExchange of Notes in Fiscal Year 2003

Date of E/N Country Project (100 million(Local Date) yen)

March 31, 2004 India Delhi Mass Rapid Transport 592.96System Project (V)

Purulia Pumped Storage 235.78Project (II)

Dhauliganga Hydroelectric 138.90Power Plant ConstructionProject (III)

Rengali Irrigation Project (II) 63.42

Kurnool-Cuddapah Canal 47.73Modernization Project (II)

Umiam Stage-II Hydro Power 19.64Station Renovation andModernization Project

Bisalpur Jaipur Water Supply 88.81Project (Transfer System)

Integrated Natural Resource 62.80Management and PovertyReduction Project in Haryana

Direct Investment from Japan(bil. Yen)

1995 1996 1997 1998 1999

12.5 24.7 53.2 32.9 23.2

Annexure The trade between the two countries is alsotypical of trade relations between adeveloped and a developing country. Indiaessentially exports low value added goodsand imports high value added goods.

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Japanese FDI in India (Approvals and Inflows)Rs. (million)

Japan 1991 1992 1993 1994 1995 1996

Approvals 527.1 6102.3 2574.3 4009.0 15142.6 14882.5

Inflows - 789.0 1157.0 2981.0 2038.0 3433.0

Foreign Aid India

(1) Japan has been the largest bilateral donor to India since 1986. Out of the total aid of$2.5 billion that India received in 1997, Japan accounted for $1.2 billion. (Committmentbasis, compiled by the Ministry of Finance, Government of India).Japan has beenproviding aid to India covering various sectors and regions within India with utmostpriority in the following sectors:


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Year 94 95 96Country Amount Country Amount Country Amount

1st Japan 886.5 Japan 506.4 Japan 579.32nd Germany 123.1 Germany 168.0 U.K. 154.33rd U.K. 100.4 U.K. 142.2 Netherlands 58.54th Sweden 91.1 Netherlands 81.8 Sweden 51.45th Netherlands 48.6 Sweden 51.5 Germany 51.2Others Others 128.3 Other 101.3 Others 130.3

Total 1378.0 1051.2 1025.0

ODA Disbursements to IndiaAmounts in US $ (million)

Economic Infrastructure: Power, Transportation

Anti-Poverty measures: Health, Medical treatment, Agriculture, Rural Development,Population and AIDS, Support for small enterprises

Environmental Conservation: Anti-pollution measures, water quality improvement, watersupply, afforestation, improvement in urban environment.

Press Release: See Press Release section for some of the examples.

Year 95 96 97Country Amount Country Amount Country Amount

1st China 1380.15 Indonesia 965.53 China 576.862nd Indonesia 892.42 China 861.73 Indonesia 496.863rd Thailand 667.37 Thailand 664.00 India 491.804th India 506.42 India 579.26 Thailand 468.265th Philippines 416.13 Philippines 414.45 Philippines 318.98Others Others 6694.57 Others 4871.29 Others 4259.83

Total 10557.06 8356.26 6612.59

Japan’s ODA Receipts

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(i) Japan’s ODA Disbursements to India Amounts in US $ (million)

Year Grants Load Aid TotalGrant Aid Technical Total Gross Net

Cooperation1993 31.03 17.73 48.76 379.70 247.18 295.941994 34.64 23.61 58.24 997.36 828.28 886.521995 37.41 25.39 62.80 644.36 443.62 506.421996 35.18 21.83 57.01 728.39 522.26 579.271997 31.84 23.26 55.10 641.25 436.70 491.80Total 466.24 224.59 690.79 7641.79 5197.95 5888.74

*Net Disbursement = Gross Disbursement - Repayment

(2) Japanese ODA program comprises three components: viz. Yen loan, grant aid andtechnical cooperation.

(ii) Japan’s ODA Commitments to India Amounts in JP Yen (million)

Year Grants Loan Aid TotalGrant Aid Technical Total Gross

Cooperation1993 4.185 1.049 5.234 119.640 124.8741994 3.363 1.193 4.556 125.765 130.3211995 3.563 1.109 4.672 128.774 133.4461996 3.406 1.051 4.457 132.746 137.2031997 3.526 1.335 4.861 132.725 137.586Total 73.323 16.051 89.374 2009.984 2099.358

(3) In response to the nuclear tests by India in May 1998, Japan has frozen freshcommittment of grand and yen loan for new projects, except humanitarian andemergency aid and Grant Assistance for Grassroots Projects.


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grant to the program to control diarrhea inchildren.

Despite the low quantum of ‘aid as grant’ itis important to ask how the priorities of theprograms are determined, and who has thefinal say in determining the priorities. Whilethe programs cited above are unexceptionaland of unquestionable importance theargument still remains valid. Without anydisrespect to the generosity and hard workof those involved in earthquake relief onemust ask exactly what kind of assistancewas objectively necessary and what wasreally desired by the affected people – orother people’s organizations working in thesame areas. The provision of immediaterelief was important of course – but shouldhave been the sole responsibility of theofficial and non-governmental bodies inIndia. Japanese aid would have served farmore permanent purpose if it was directedtowards `rehabilitation’ – imparting thetechnology for the construction ofearthquake resistant houses, particularly atlow costs with a major self-help component,and training and technology transfers inprediction of earthquakes. Poliomyelitis anddiarrhea in children are of course majorproblems – but they are also related to theentire question of reliable and safe (fordrinking) water supply for the poor andmarginalized populations in the rural andurban areas. This of course, is not to denythe importance of immediate curativemeasures.

A more important question, however, will bewhich maladies to concentrate on (and

Conclusion

1. Components of EconomicCooperation between any twocountries are

a. Aid as outright grantb. Aid as loan – hopefully ‘soft’ – with low

rates of interest and a long repaymentperiod

c . Traded. Direct investment

It becomes increasingly important toexamine each of these components –particularly when the countries in questionare unequal in economic development,strength, and political power.

Aid as Grant

The component of aid as outright grant isgenerally very low. It is usually given inexceptional circumstances like ‘natural’disasters or major humanitarian calamities.(In the case of India-Japan relations forexample such aid came in 2001 to dealwith the devastating earthquake in thewestern Indian state of Gujarat. The moneywas utilized mainly for medical assistance,for providing immediately necessary reliefmaterial, and for providing temporaryshelters. It was provided through JapaneseNGOs that executed the programs directly.)Grant as aid is otherwise channeledthrough international organizations – forexample Japan provides grants to India fora program to eradicate poliomyelitisthrough UNICEF. Same is the case of the

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perhaps in what manner). At one stage anumber of aid agencies – directlygovernmental or more indirectly linked tothem – concentrated all efforts of drugaddiction. A sarcastic remark that was thenoften made in India was that if you are adeprived young person from the slums ofsay Mumbai and wish to get theopportunities you justly deserve but havebeen denied, become a drug addict. Thecynicism of the remark beside, it doespoint out the skewed nature of priorities ofthis kind. As is well known the ‘awareness’and near panic regarding HIV/AIDSincluding the financial support it evokes hasoften been questioned. It has also beensuggested that the HIV/ AIDS controlprograms as privileged above all otherhealth issues in reality serve somecommercial interests of pharmaceuticalgiant corporations.

Aid as Loan

Enough has been said about internationaldebt and loan already. Numerous bookshave discussed the reality of loan as aid.The loans invariably come with stringentconditions – at a certain level to ensurerepayment of the loan, regular payment ofthe interest, and to create the properprograms.

As said earlier loans from Japan have verylow rates of interest, 1.8% in general, 1.5%for environmentally sensitive projects, and0.75% for international environmentprojects. The repayment is over 30 to 40years. These are generous terms. The

question however remains in terms ofdecisions regarding priorities of theprojects. Apart from the Delhi Metro theJapanese loans have come for developmentof highways and transport facilities and thedevelopment of power generation capacityincluding thermal power plants. Thehighways as well as the thermal powerplants have come in for severe criticism fortheir social as well as environmentalimpacts.

A major Japanese consideration seems tobe the development of power projects inIndia. The thinking about this is clear in the1995 country report on India prepared by aJapanese expert group for governmentagencies involved with ODA.

That is the other fact about loans, apartfrom considerations of repaymentcapacities. The loans reflect the interests ofthe donor countries somewhat more thanthose of the recipient countries.

Trade

International trade is a recent topic ofdebate and campaigns on a global scale.The current campaigns are sparked off bythe activities of WTO that createinternational compulsions on amount andconditions of trade.

The inequality in trade actually predates theWTO. The developed countries opened upthe markets of the developing world,sometimes through the use of naked force.In doing so they even changed the definitionof ‘development’ – not always through the


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use of force. Development became theability to produce industrial goods and theirplentiful availability, whether the populationsof the developing world required or neededthese goods or not! The structures ofeconomies of the developing countries wereoften changed in this process.

The case of cotton cultivations andmanufacture of cotton textiles isilluminating in this context. Not only wasthe indigenous production of cotton textilesvirtually destroyed – to enable the sale ofmill-manufactured cotton cloth from Britainin the South Asian subcontinent but alsothe varieties of cotton crop were altered.The indigenous varieties of cotton that wereperhaps more attuned to the climatic andsoil conditions of the region, and weredefinitely more hardy and pest resistant,were dubbed ‘inferior’ and ‘lowly’. Newvarieties from Americas – sometimescross-bred with Asiatic varieties – weremore or less forcibly planted. The entireclassification of fine, super-fine, staple, longstaple, extra-long staple, etc. is based noton any innate characteristics of the cottonproduced but on the suitability of the growncotton for the power-driven textile mills andthe machinery based production process.This forms the other facet of internationaltrade.

The developing countries were utilized asstorehouses of extractible raw material –forest wealth, mineral deposits, andagricultural potentials were exploited to suitthe needs of the industries and market-

enterprises of the developed world. In theloot of the colonies and semi-colonies thatcontributed to the primitive accumulation inthe developed countries. In a later phase,when the accumulated and amassedtreasures had been looted and transferred,the colonies and semi-colonies becameproduction facilities for cheap primarygoods. The developed world specialized inthe export of manufactured, ‘value-added’goods. The situation has changed in detailsand some features in the past few decadesbut the basic relationship is not altered.Extraction of the former variety is no longerrequired or at least no longer desirable.

The developing countries hence begin to‘develop’ and acquire modern technologicalcapacities even in areas like agriculture.Some of the developed countries have alsoboosted their capacities to produce criticalagricultural commodities. The developedcountries led by the US are now mostlyfood exporters. The developing countriesare left the task of growing ‘colonial’ cropse.g. coffee, cocoa, tea and some fruits!These crops also mask the export ofanother critical commodity now under greatstress as far as availability and supply isconcerned, viz. water. The ‘colonial’ cropsare generally water guzzlers. Coffee, sugar,tea, cocoa, even soybean need and claimtremendous amounts of water. It is forexample estimated that a cup of coffeeactually represents utilization of 142 cupsof water – and only one of them for boilingand adding to the coffee. The story of theother crops is quite similar.

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financial instruments-derivatives markets.This kind of investment has lent somecolorful sobriquets to the contemporaryphase of capitalism, e.g. foot-loosecapitalism, casino-capitalism, etc.

A more responsible and steadier variety isportfolio investment. This is not capital onthe move and it is a long-term investment instable companies and firms. Thisessentially ‘merger and acquisition activitydoes not, however, lead to anyaugmentation of productive activity since itis essentially only a transfer of ownership.There may be some injection of new capitalin the existing firm that may at times bringabout improvements in technology,equipment, production processes, areas ofoperation etc. More often than not howeverit only means a repatriation of profits toanother country.

Capital invested in productive activities – ininvestment of manufacture of goods andproducts – definitely augments actualproductive capacities of the recipientcountry. The questions that remain arewhat kind of production and for whom it isintended. It rarely if at all, and onlyindirectly touches the basic problems in thedeveloping countries – for example poverty,unemployment, loss of livelihoodopportunities, low standards of living, etc. Itis natural in a capitalist system thatinvestment will only flow into profitableareas, into manufacture of goods for whichthere is a demand. It is unlikely that theprivate enterprise indigenous or foreign willinvest to manufacture low surplus mass

The trade scene is further vitiated by overtor covert prohibitory tariffs and subsidies.Raw pineapples, tinned pineapple slices,and pineapple juice for example attractdifferent kinds of tariffs in the developedcountries. The case of subsidies toAmerican and European farmers while theyare virtually banned in the developingcountries has become a major issue ofdispute even within the WTO.

International trade has generally led toinequalities, imbalances, vulnerabilities,and dependence. It may be essential forthe developing countries – even for meresurvival but is never fair or equal. In theprevalent market paradigm it perhaps cannever be so.

Trade between India and Japan exhibitsthese typical characteristics of internationaltrade between non-equals. India exportsgems, minerals, agricultural and marineproducts, cotton yarn or cotton ‘gray’ cloth.Japan exports technology, machinery,electronics, etc. To say the least therelationship shows no new features.

Investment

Deployment of capital across internationalborders is a characteristic of capitalismever since its very inception. It nowacquires a philosophy and some fancyterminology.

Investment can be of various types.

We have already discussed speculativeinvestments in commodity, currency, and


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place with World Bank and other foreignassistance. One need not necessarily lookfor hidden reasons for this interest in acynical fashion.

The other current trend is investment inservices and commercial activities. Theseare notional production activities moredirected to tackle the basic crisis ofcapitalism – of relative overproduction – thatis exacerbated by the latest technologicaldevelopments that have largely displacedthe direct producer – if not actually then atleast as a foreseeable possibility, thusfurther shrinking an already limited market.The need then is for ‘consumption’ withoutactual increase in production. Similar willbe the case of the image industry –involving production of images andproduction of image accessories. Travel andtourism – that now also acquire the nameof cultural and heritage development play asimilar role. Japan is quite active recently inthis area of activity in India.

2. The Neo-liberal Paradigm

I am not very sure of the status of neo-liberalism as an economic ideology inJapan. A country report on India preparedin 1995 by a group of Japanese experts ishowever a revealing document. (TheSecond Country Study for Japan’s OfficialDevelopment Assistance to India, StudyGroup for Development Assistance to India– Japan International Cooperation Agency,March 1995 organized by JapanInternational Cooperation Agency.)

consumption or wage goods. It goes tomanufacture of goods like consumer goodsand luxury perishables. Ruling neo-liberalaxioms of course now raise this to thestatus of a canon – an almost religious ordivine principle of desirable and optimaloperation of the world.

The market and the process of profitmaximization is not in itself a correctdeterminant of development priorities. Takethe case of automobile industry for example– also because the presence of Japanesecorporations in vehicle (personal andcommercial, 2 and 4 wheeler) industry isquite marked in India (Suzuki, Isuzu,Honda, Nissan, Toyota for example). Themanufacture of large number of personalvehicles has an impact – direct and indirect– on the transport planning of a country.The emphasis then shifts away fromdevelopment of public transport. Thedevelopment of roads – free ways andexpress ways to cater to high technologyand high performance vehicles then takesprecedence over creating facilities ofaffordable and convenient transport for themasses. Strangely this policy of neglect ofpublic transport is by and large neverfollowed in the home countries.

Such developments are again celebrated byneoliberalism – since it expects these to berational and logical determiners of priorities.There are of course some exceptions. Thedevelopment of the Delhi metro is withJapanese loans and know-how. Similarlythe development of the MumbaiMetropolitan Transport Project will take

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The report expresses appreciation forIndia’s economic liberalization program –identified as giving due importance to themarket, in fact as marked led development.Note for example a very potent paragraph:

“India’s efforts to reform its economy areaimed at securing the country’s bonds withthe global economy at large. The countryhas begun to draw attention as a giganticmarket with potential second only toChina’s in scale; given that factor, India’spresence on the world stage can only beexpected to loom ever larger in the yearsahead. Nonetheless, to nurture healthierties with the rest of the internationalcommunity, India and Pakistan will be welladvised to build friendly relations within thecontext of SAARC and at the same time bysigning the Nuclear Nonproliferation Treaty.”

A political plea for peace in the region andfriendly relationship between India andPakistan would be unexceptionable andwelcome. The quoted paragraph is moreconcerned with the creation of a SouthAsian market bloc – that can then be dealtwith conveniently as a single entity. (SAFTAis now close to becoming a reality.) Thereport further notes:

“Essentially drawn up in keeping withelements of the structural adjustmentprogramme advocated by those twoinstitutions, the reform programmeconsisted chiefly of policies aimed atcurbing overall demand: macroeconomicstabilization measures and institutionalreform on the supply side of the economy

(including the liberalization of trade andforeign exchange, the relaxation ofrestrictive industrial policies, steps tooverhaul and privatise state-run enterprises,tax reform, and reforms to the financialsystem). India deserves high marks for theaccomplishments in macroeconomicmanagement it has demonstrated sinceimplementing its economic reform.Macroeconomic indicators began hinting ofan improving trend in the economy in fiscal1992. And, to be sure, India met most of itstargets in economic stabilization during thefirst two years of the reform process.1Nonetheless, it still faces numerousproblems in the arena of budget reform andin striving to overhaul its state-runenterprises and the financial system.”

The report continues all through in a similarvein. It makes quite a fewrecommendations. Those on power andagriculture are quite revealing once again.Proper charges for electricity arerecommended for a country wherein thecultivator (in numbers and production) ismainly the small farmer with hand-to-mouthexistence. Similarly no new or innovativemeasures are suggested – except furthercommercialization – of agriculture.

3. A Dream Situation

Somehow I am given to speculate in adreamy fashion a little at this stage.

I must confess that I do so principallybecause I see a possibility for evendeveloped countries to escape the trap of

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neo-liberalism while protecting their self-interests in an enlightened manner. I think anon-western nation like Japan has/ had areal possibility to take such steps.

If there were real people to peoplecooperation between India and Japan whatwould be the shape of that cooperation?What would be the expectations fromJapan? Obviously these assumptions canhave a brush with reality only if both thecountries are real popular democraciesrather than formal market democracies.

India

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The Reality of Aid Asia-Pacific 2005 Nepal

1. Introduction

Japan is one of Nepal’s largest donorcountries. The history of Nepal-Japanrelations began about 150 years old - thetime when a Buddhist Monk, Kai Kawguchi,visited Nepal as the first Japanese. Formaldiplomatic relation with Japan began in1956. Nepalis and Japanese people findmany things common. Both countries havemonarchical system and strong Buddhistreligious like in addition to the attraction ofNepali mountains for Japanese tourists.

From the sixties, Japan’s involvementstarted increasing in Nepal. A team ofexperts did the survey in Kali River in thewestern part of Nepal for hydroelectricityand design of Nepal’s agricultural system.Since 1989 onwards, Japan has ranked asthe top in Nepal’s ODA list. For example, inthe overall ratio of bi-lateral ODA, Japanhas provided 31.1% in 1989, 23.1% in1990, 43.9% in 1991 and 38.7% in 1992.

Today, we can find strong Japaninvolvement in the following areas for officialdevelopment assistance (ODA):

Impact of Japanese Aid in NepalGopal Siwakoti ‘Chintan’

Rabin SubediNepal Policy Institute

A. Human resource development

As part of its technical assistanceprogramme, Japan has sent over 1,400technical experts and over 838 JapanOverseas Cooperation volunteers (JOCV) inthe past five decades. They have traveled todifferent parts of Nepal and have beeninvolved in various studies of naturalresource management and training forhuman rights resource development.

B. Social sector activities such as healthand education

Japan has been very active in the areas ofwater supply, health care, polio vaccinesand other medical support. They includethe establishment of Tribunal UniversityTeaching Hospital, one of the few biggest inthe country, and National TuberculosisCenter as well as the support to the KantiChildren Hospital. Similarly, Japan also hasprovided assistance for the construction ofapproximately 5,500 classrooms in primaryschools under the Basic Primary EducationProgram (BPEP) in 1994-2002.

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C. Agriculture

Japan has been providing assistance in thefield of agriculture such as high valueagricultural products, huge supply ofchemical fertilizers and the developmentand diffusion of agricultural productiontechnologies since 1977.

D. Infrastructure development

Japan’s involvement in Nepal’s overallinfrastructure development ranks as one ofthe largest. These areas include the survey,design and construction of hydropowerprojects, bridges, water supply facilities,transportation, telecommunications, etc.Some of the major projects are KulekhaniI and II hydropower projects, Sindhuli road,Udayapur Cement Factory, trafficintersections in Kathmandu and the mostcontroversial Melamchi Water SupplyProject (MWSP) which is in the process ofconstruction.

E. Environment conservation and culturalactivities

Japan’s ODA in the field of resourceconservation, environmental protection anddisaster prevention/mitigation is very well-known in the country. These include theestablishment of Water-Induced DisasterPrevention Centre as well as the forestconservation and watershed managementin and around the Phewa Lake in PokharaValley. The assistance in the cultural sectorinclude the micrographic equipment toNational Library, dubbing equipment for

educational programme to the statetelevision, display equipment to BuddhistArt Gallery at National Sport Council andthe printing equipment to Royal NepaleseAcademy.

2. Japanese Aid Conditionality

Generally, the Japanese ODA has threedifferent forms: a) loans, b) grants, and c)technical assistance. One standardpractice of Japanese ODA is conditionality.The most serious problem is the completelack of transparency of contracts andagreements. It is simply impossible toaccess any documents relating toJapanese ODA, including their evaluationand progress reports if and whatever theymay have. The government ministries areequally reluctant to release any suchdocuments which apply to all ODAdocuments.

When citizens and groups make requestsor judicial complaints for the accessibilityof these documents for research and study,they are either simply ignored claiming thatthese do not exist or give the narrowarguing about who should give thepermission first. This game of denial goeson and on for months without any results.

It is equally impossible to meet theresponsible Japanese ODA officials in theiroffices in Kathmandu or the meetings endjust in brief conversations which are veryformal, hierarchical and diplomatic. Allthese exercises end up in a nice afternoonor tea, some glossy brochures or a few

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pages of reports highlighting the history of“great co-operation” or “achievements”.

There is also a general experience andreaction to Japanese ODA in the sense thatthe Japanese officials have been very cleverin promoting their business. There is asaying that no equipments or machinescould be repaired or fixed without calling aJapanese consultant or expert all the wayfrom Japan or in Kathmandu if there is any,implying that even fixing some small nutsand bolts to replace some simplemachinery arts require the services ofJapanese consultants. The Kulekhanihydropower project and the UdaypurCement Factory have some very interestingstories like this. One example of suchconditionality can be cited from the Projectfor the Expansion and Reinforcement ofPower Transmission and Distribution

System in Kathmandu Valley (Phase 2).The grant conditionality described in theleaked official letter says the following:

“3 (1), The Grant will be used by HisMajesty’s Government of Nepal properlyand exclusively for the purchase of theproducts of Japan or the Kingdom of Nepaland the services of Japanese or Nepalesenationals listed below :

(The term nationals whenever used in thepresent arrangements means Japanesephysical persons or Japanese juridicalpersons controlled by Japanese physicalpersons in the case of Japanesenationals), (a) Products and services

necessary for the construction of powerdistribution system and other relatedfacilities (hereinafter jointly referred to as“the facilities”); (b) Equipment necessaryfor the execution of the project and servicesnecessary for the installation thereof; and(c) Services for the transportation of theproducts referred to (a) and (b) above tothe Kingdom of Nepal, and those forinternal transportation therein. The letterfurther describe that “(His Majesty’sGovernment of Nepal or its designatedauthority will enter into contracts inJapanese yen with Japanese national forthe purchase of the products and servicesreferred to in paragraph 3. Such contractsshall be certified by the Government ofJapan to be eligible for the Grant.”

It also provides that the Nepali governmentshall exempt Japanese nationals fromcustoms duties, internal taxes and otherfiscal levies which may be imposed in theKingdom of Nepal with respect to thesupply of the products and services underthe Verified Contract. It also bars theexports of products purchased under theGrant to other countries, requires the priorreview of any tender documents by JICAand the review of detailed evaluation reportsbefore the award of the contract.

3. Impacts and Observations

In the minds of the general public,Japanese ODA is considered as not a“BAD” one. The reason is that it is like aPandora’s box. It is so hard to say anythingin concrete with authority until one has the

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chance to see it. Japanese, as a matter oftheir own socio-cultural behaviour, arealways seen as working gently, nicely andin low profile. Japanese are not consideredas arrogant and offensive.

This is true of course in the case of thepeople but even government officials andcorporate representatives are good in thisdiplomacy. But one could be sure thatJapanese ODA may rank as one of theworst when the question is who benefits themost. But the copies of the contracts andagreements, the data and the evaluationreports must be made available.

In Nepal, based on some little knowledge ofhow Japanese operate and do theirbusiness, Japanese equipments andsupplies cost almost three times more thanthose to be purchased through bidding inan open international market. As saidearlier, all these items are also difficult tomaintain with locally available spare partsthus necessitating the subsequent importof spare parts from Japan at a high price.Deepak Gyawali, a renowned researcherand academician on water, says that“Japanese Aid has still many questions toanswer. In comparing foreign aid andprojects of different countries, in Nepalbilateral Japan projects stand out forefficacies. When Japan projects areexecuted, there is an exhibition oftremendous diligences, clockwork precisionschedule and often new constructionequipment at work. Japanese projectconstruction site are often surrounded by

throngs of awestruck Nepali bystanders.”

4. Conclusions

Given the country’s economic crisis, theJapanese ODA is important for Nepal. Butthe fundamental question is whether theJapanese ODA has been providedaccording to the needs and the priorities ofNepal and the Nepali people. Anotherquestion is whether it has increased moredependency, and the answer is certainly‘yes’. The time has come to make anindependent assessment by Nepalis andJapanese experts from the related fieldsand see how the same ODA could be useddifferently by giving a priority to therecipient country which is Nepal. The sameis the case for other countries as well.Whatever is the past, Japanese ODAshould remain as so closed fromtransparency and not accountable to thepeople of both the countries - the recipientsand the donor(s).

Even in today’s simple norms of access toinformation as a fundamental human rightand as a matter of transparency anddemocratic practice, all ODA needs to befully reviewed, make it untied and bring itinto the framework of human rights asdefined under both national andinternational laws and treaties. We cantrust and respect ODA only when a countylike Japan believes in the framework ofinternational co-operation as defined underthe United Nations system that it reallybelieves in the benefit of the recipientcountries first. Even in the case of private

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lending and the operations of multinationalcorporations and consultants, theframework of transparency andaccountability needs to apply. This helpsnot only in the effective realization of theODA but also helps combat corruption thatis rampant in recipient countries due to theexistence of corporate-led undemocraticgovernments in most of these countries.Nepal is certainly not an exception.

5. Recommendations

Based on the above observations andconclusions, the followingrecommendations are absolutely relevantfor the better effectiveness and legitimacyof Japanese ODA in the future:

1. Japan must have a policy and law thatallows all the stakeholders andbeneficiaries of Japanese ODA to havefull access to information and documents

before the said projects or activities areimplemented.

2. Japan must respect and comply withnational laws and international treatyobligations of the recipient countries withregards transparency.

3. Japan must follow the practice of untiedaid.

4. Japan must development effectivecomplaint procedures, mechanisms andremedies for the people who claim to benegatively affected by Japanese ODA.

5.These procedures and mechanisms mustprovide for adequate compensation andappropriate remedies for victims ofJapanese ODA-funded projects andactivities, including access to Japan’scourts with clear jurisdiction over theseclaims.

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Narrow Visions & Grim Outcomes

Aid from Tokyo to Islamabad viaWashington and Manila

Who decides what happens to whom in Pakistan?

A. Ercelan*

Pakistan began receiving aid from Japan astechnical assistance in the mid-50s. Overthe past half-century Japan has become amajor donor for Pakistan. ODA comesdirectly through official agencies, such asthe Japan International Co-operationAgency (JICA) and the Japan Bank forInternational Co-operation (JBIC), andindirectly through the IFIs, now largely fromthe Asian Development Bank (ADB).

Bi-lateral aid as grants and loans comesdirectly for projects and programmesinitiated and implemented by Japanagencies, largely to be spent onprocurement from Japanese industry andconsultants (which include academics).Through direct grants and loans, and moreso through “subscriptions andcontributions,” Japan also actively supportsprojects and programmes that have beeninitiated and are implemented by ADB andthe World Bank (WB) in Pakistan. Theseprovide Japan an opportunity to reducevisible interventions in the Pakistani state –an obviously successful strategy in that

Pakistan activists, as elsewhere in SouthAsia, focus on IFIs themselves rather thanon their major funders in Washington andTokyo.

The influence of Japan ODA goessubstantially beyond simple financing ofprojects — through the support given toconceptual preparation of interventions byIFIs using Japan Trust Funds (the mostrecent include the Japan Fund for PovertyReduction administered by the ADB, andthe Japan Social Development Fund atWB). A subtle source of influence throughIFIs is Japanese nationals in seniormanagement at IFIs, especially whoseprofessional expertise has been nurtured byextensive service to the Japanese state.

In 1998, Japan suspended directassistance when Pakistan publiclyannounced its nuclear capability in a tit-for-tat with India’s actions. Significantly, Japanplaced no restrictions on its indirect butsubstantial support through the IFIs toeither of the countries. Since 2001, otheron-going projects were provided direct

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assistance in both Pakistan and India as“projects not covered by the sanctions.”Additional levels of direct assistance werealso provided to General Musharraf’sgovernment after 9/11, apparently “topromote the stability of Pakistan andsupport the country’s commitment to anti-terrorism.”1

A recent visit to Pakistan by its ForeignMinister confirms that the Japangovernment will return to a high level ofdirect assistance. In a dramatic reversal oflong-standing public policy, Japan willapparently no longer require Pakistan tosign international agreements on nuclearcontrols (NPT and CTBT).2 No doubtpersuaded by the US, Japan apparentlysees militant Islamic groups as a greaterthreat than nuclear weapons.

Both the Japan Embassy and seniorofficials at the Ministry of Foreign Affairs,JICA and JBIC in Tokyo confirm that aCountry Assistance Program is currently inactive preparation. However, little has beenmade public about specific plans, withJapan continuing its tradition of restrictingserious consultations overseas to thosebetween governments.

Japanese capital dominates direct foreigninvestment in Pakistan, with much of it inthe transportation sector. It will growbecause of the stress on private sectoroperations by the IFIs, and the integrationof Japan industry into its policy makingestablishment. This paper does not,however, deal with this aspect of Japan’s

influence on Pakistan’s development.3

The paper begins with summary data onlevels of Japan ODA to Pakistan.4 Specificcase studies are then used to drawattention to problems in Japan ODA. Theprobable future course of Japan ODA ispresented as official perspectives. Theconcluding section uses this opportunity todwell, briefly, on both the need andpossibility of influencing state actors inPakistan and Japan by internationalalliances of civil society organisations.

1. Data on Japan ODA

Pakistan’s external (mostly public) debtplus foreign exchange liabilities are around$36 billion – almost half of the GDP.5 Of thetotal outstanding bilateral debt (excludingthat owed to ADB, WB and othermultilateral institutions) of $13 billion,Japan’s share was almost half at $5.5billion in 2003. The level of indebtedness toJapan is substantially increased once werecognise that multilateral debt is morethan half of all external debt.

External debt servicing, which exceeded $6billion recently, claims a high share ofexports – at over one-third-and is asubstantial share of foreign exchange‘earnings’ (including remittances at highlevels from the US since 9/11). Whenprivate protection of capital is added(foreign exchange cover and the like), theburden on the poor (through mostly indirecttaxation) is much higher. Recent debtservicing for Japan bilateral debt has beennearly $200 million annually.


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Through loans of over $3 billion, grants andtechnical co-operation, Japan ODA totalled$4.5 billion by end 2001. Annual aid rosefrom over $100 million in 1991 to nearly$500 million by 1998. Aid declined after thenuclear tests, but still exceeded $600million over the next three years.6 Thesefigures appear to exclude contributionsthrough the ADB and the WB.

Direct ODA from Japan has been asubstantial proportion of total ODA toPakistan. By 1998, Japan ODA was nearlyone-half of all assistance, and dwarfed allother country donors. Even compared tothe international organisations, Japan ODA($490m) exceeded the combined aid fromthe ADB ($235m) and WB ($170m) in 1998.

While the primary vehicle for ‘policyreforms’ remains the WB, the main conduitfor Japan ODA (at least currently) is theADB. According to its most recent newsrelease, ADB support to Pakistan (at end2003) has amounted to $12.5 billion inloans, and $115 million in (grants for?)technical assistance. The ADB BankCountry Strategy plans to lend nearly $2billion over 2005-2006.7

Presently [in 2002?], 53 public sectorloans covering 38 projects are underimplementation, of which 83% loansare rated satisfactory. In addition, 8private sector loans for a total of$152.5 million are underimplementation. 57 TAs for a total of$29.5 million are under implementation.

Data for ODA should also be viewed in thecontext of other inflows of foreignexchange, where exports and direct foreigninvestment are obviously other ways toassist development (e.g. fairer prices forexports tied to labour and environmentaljustice; private equity investment inprovision of services to the poor and inlabour intensive enterprises; production ofbuses rather than cars).

During 2003, exports came close to $10billion, and nearly $4 billion arrived inremittances (much as possibly reversecapital flight from the US).8 Direct foreigninvestment was 0.8 billion, and project aidfrom donors was $1 billion.

2. Peoples Views from Pakistan

Japan ODA comes both as direct aid toprojects, and as indirect aid through theADB and other IFIs. It is not only difficultbut irrelevant to analyse these twochannels of aid separately – Japangovernment is responsible for all projectsregardless of the channels or nature offunding; and the issues are similar. Wealso see no point in distinguishing between‘software’ (training or experts) — and‘hardware’ assistance. Similarly, there isnot much use in separating case studies ofgrants and loans. Even when grants aregiven, a project usually has othercomponents that place future tax burdenson the poor. Furthermore, when a project isill conceived, its adverse impacts occurindependent of the specifics of financing. Infact, grant aid can lead to more ill


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conceived projects since local oversightmechanisms become weaker.

Serious problems with projects may begrouped into three categories:

Inappropriate and ill-conceived

Directly adverse impacts upon peopleslives and livelihoods — that are especiallyharsh because excessive, and mitigationmeasures are absent, inadequate ordelayed; inadequate or delayedcompensation, rehabilitation andresettlement of displaced people.

Excessive fiscal burdens – whether directcost-recovery from beneficiaries, orgeneral taxes, people suffer because oflarge-scale waste and corruption,including hardware that can neither beused efficiently nor maintained.

As citizens, our experience points ustowards the main source of the problems.

Peoples Participation is the core issue. Inthe absence of meaningful public debateand discussion, adverse consequences areinevitable when ODA:

identifies broad development needscorrectly but responds with the wrongaction priorities

identifies a specific need but comes upwith an inappropriate technical response

places undue emphasis upon bricks andmortar, equipment and training ratherthan upon institutional arrangements for

cost-effective implementation andsubsequent sustainable operations

produces impacts and burdens thatpenalise large numbers of poor people.

These issues are illustrated below throughspecific projects. Some of which – such asthe National Drainage Project or the SocialAction Program – have (mis)used billions ofdollars of public resources, includingbillions of yen from taxes of Japanesecitizens. These are mostly projects whichreflect the author’s direct involvement inresearch or as an activist in solidarity withpeople affected adversely by the projects.9

Disregarding constitutional and internationalcommitments, the Government of Pakistanrarely pays attention to the actualimplementation of rights-baseddevelopment. Hence most donor projectsoften violate one or more core labour rightsdefined by the ILO Declaration of Principles– most notably, child and forced labour arepresent directly or indirectly throughprocured materials and out-sourcedcontracts; collective bargaining is severelycurtailed or not permitted; women arediscriminated against in pay and in jobs.Like other donors, Japan has yet to publisha review of project compliance with corelabour rights or environmental standards (oreven local laws).10

Under pressure from the WB, theGovernment of Pakistan has prepared aPoverty Reduction Strategy Paper (PRSP).As for other countries, this paper is


114

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115

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116

supposed to provide the general frameworkfor future assistance from all donors,including Japan. In the aid establishment ofJapan there has been some public voicingof critical views about the PRSP, but the aidagencies seem to have generally acceptedthe approach of the WB.11

The fact that PRSP is essentially anelaboration of the World Bank’s (neo-liberal)approach to development should surpriseno one. It is equally unsurprising that thePRSP has been produced with littlesubstantive consultation from civil societyin Pakistan. Despite contrary claims, thereis little domestic ownership — even amongstate elites — since the government hasnot attempted to get formal endorsement ofthe National Assembly or Senate or even ofthe new National Security Council installedby the President General.12 To obtain fundsdirectly from donors, provinces have‘prepared’ their own strategies within theoverall framework.13

There is no doubt that the current ODAsystem (of all donors) is far from being aneffective instrument for development –benefits are narrowly distributed whileburdens are imposed widely on the poor. Infact ODA often increases poverty.14 Aidprojects may provide large but onlytemporary increases in jobs, hencecreating a short-lived impact upon poverty.The temporary reduction in poverty forsome just does not offset the permanentincrease in the poverty of many otherscurrently and in the future, aside from thefact that redistributing poverty is

unacceptable. International bidding, andtied aid in particular raises costsdramatically. Donor countries get backODA loans twice over once the principal isrepaid, and often high rates of interest overand above this. The simplemacroeconomics of loans also castsserious doubt about ODA loans. Theeconomy can hardly grow more than 4percent annually, but interest rates usuallyexceed this rate of growth. ODA enhancespatronage funds for government, thusdeflecting calls for good, democraticgovernance.

Specially through IFIs, Japan ODA haspromoted market-based provision of publicneeds. Pakistan has been straitjacketed byStructural Adjustment Loans with the goalof reducing public spending and privatizingpublic enterprises. As has happenedelsewhere, the poor have suffered fromincreasingly inequitable access to qualityeducation and health care, and even toclean drinking water. Even as the number ofunemployed and the poor has risen,livelihoods of labour have become insecure,and increasingly fewer people realise corelabour rights.

3. Official Perspectives in Japan

We know that Japan ODA has seriousproblems in conceptualisation,implementation and operations. In view ofsubstantial and increasing ODA levels, it isimportant to ask if the system of JapanODA is likely to change appreciably so thatsuch problems are minimised in the future?


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What is the view of development needed forpeople in Pakistan? Of consultativeprocesses that privilege people rather thanclient government? Of improving projectsand programmes to help rather than hurtpeople? It may well be useful to recall (inmore ways than one) that ‘the road to hellis paved with good intentions.’ For anindicative answer to such queries, we lookat some recent government documents.Since the ODA system is poorly equippedfor public consultations, and it is expensiveto interview top aid officials in Islamabad(even were they to be available), the paperdoes lack a frank perspective from thoseJapan officials who actually implementJapan ODA in Pakistan.15

JBIC published an ex-post evaluation ofprojects in February 2004.16

Unfortunately, the study of Pakistan ODAis restricted to a relatively minor project ofwater supply. The Annual Report for 2003merely lauds its road projects in Pakistan.JBIC has a narrow view of using aid fordevelopment (rather than growth) – anillustration of which is the recent SpecialTerm for Economic Partnership (STEP).More favourable terms for loans are offeredwhen recipients commit themselves to ahigher ratio of tying procurement to“excellent Japan technology and know-how.”

JICA last published its Annual Report inSeptember 2003.17 Impervious to peoplesevaluation (as contrasted to evaluation byexperts and governments) of its TechnicalCo-operation, the Report states blandly that

“JICA deems that an expansion of bilateralgrants mainly involving technical co-operation is an essential requirement forincreasing the grant ratio of Japan’s ODA[which is one of] two of the main indices ofthe quality of aid.” Since Japaneseexpertise and training are usually requestedfor mega projects which are wholly anti-poor — or for unsustainable state-of-the-artequipment peddled by Japan industry whichare blatantly cost-ineffective – should thismean that Japan ODA will primarily supportsuch boondoggle projects, in a business-as-usual approach?

In this regard, it is instructive to examinesome of the terms used by JICA (in itsAnnual Report).

Accountability [is the] responsibility tofurnish adequate and accurateexplanations to citizens and the peopleof a recipient country regardingcontent, financial affairs, and reasonsbehind decisions when proceeding withdevelopment aid and internationalcooperation activities and programs.

Core support for important policies [is]direct support for pivotal institutionswithin governments responsible forformulation of important policies suchas financial and monetary policy,industrial policy, and regional policyconcerned with transition to a marketeconomy.

It is refreshing to find that accountability willbe to citizens and people (rather than just


118

public representatives and government), butnote that it is only to the extent ofinformation rather than consent. In anycase, one would be hard pressed to findevidence of systematic implementation ofeven such limited accountability. Note alsothat accountability does not seem toextend to sharing lessons learnt from(multiple, repeated and obvious) failures ofprograms.

Promotion of economic developmentthrough markets is understandablyimportant to Japan’s economy and thePakistani state. But why are other pressingissues of the Pakistani people such aspoverty and environment not (genuinely)central to goals of Japan ODA. If Japan’seconomy decides the character of JapanODA, then is there much that ODA canreally do for Pakistan’s (just andsustainable) development beyond(inequitable) growth? We all know thatmarket-based growth in an inequitableeconomy will do little to reduce povertyspecially when it is rapid growth; existinginstitutional mal-governance will also dolittle for poverty through the expansion ofpublic investment made feasible throughrapid growth.

A review of ODA to Pakistan [Review] wasprepared for JICA in 2003. The aid agencyexpected the Review18 to accomplish twomajor goals.

One is to get to the bottom of thechallenges facing Pakistan from a socio -structural perspective, while paying

attention to new developments in andaround the country so that analyses ofsustainability of present economic recoveryand development process becomepossible. The other is to explore bothdesirable directions for the development ofPakistan and the optimal approach forJapan’s ODA to the country from themedium - and long - term perspectivesbased on the factors and paths to makepresent development sustainable.

The reference to the present economicrecovery is, to say the least, curious in viewof increasing mass poverty and entrenchedinequality (acknowledged by donors butdenied by government).

From the JICA web summary and theintroduction to the JICA study, theJapanese government apparently considersPresident General Musharraf to be on theright track for development. Furthermore, inits view Pakistan has not been “able toovercome structural problems [of growth]due mainly to frequent regime changes andincoherent policies. The presentgovernment still faces many challengesincluding rampant terrorism, high povertyrate, Kashmir conflict with India andcontraband traffic from Afghanistan.” 19

Since the Review may be influential in bothgovernment and the larger policycommunity of Japan, its analysis andrecommendations require comments. Wefind a host of issues for which the Reviewcan be taken to task.


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There are at least three necessaryconditions for sustainabledevelopment: maintenance of law[whose?] and order [for whom?] eandthe consistency and continuation ofpolicy directions [which are?]; ensuringequality of opportunities [through whatstructural changes?]; andstrengthening social monitoringcapacity…as the framework of theinteraction between the ruling structureand the countervailing forces [?] ofsociety… It is this weak socialmonitoring capacity that has failed tocheck the rent-seeking behavior of theruling elites and [who has?] invitedmilitary intervention at times of civiliangovernment failure.

The military action of the US againstterrorists in Afghanistan has highlightedthe significance of imbalanced regionaldevelopment (ignoring the role of USand Pakistan military in creating theTaliban!). The redirection of publicinvestment seems urgent [implyingsupport to dubious mega infrastructureprojects?]…

Sustainability can be assured throughthe rapid growth of social monitoringcapacity, a healthy market economy[for people or capital?] and balancedregional development [withoutstrengthening fiscal federalism?]…

We have identified three directions fordevelopment efforts. The first is thedirection of human development, in

which the main objectives are toeliminate gender bias and to acceleratethe growth of the middle class, and toensure equality in medical and healthservices and human security [meaningwhat and how?]. The second is thedirection of economic development, inwhich the main emphasis is placed onagricultural growth to enhanceemployment absorption [how?], controlthe ‘black economy,’ and ensureindustrial growth and the developmentof a pro-poor infrastructure [meaningwhat and how?]. The third is thedirection of regional development…public investment for the purpose ofequalizing socio-economicopportunities and to support the rapiddevelopment of regional capitals[including Karachi and Lahore!] aseconomic centers…

The most effective means of modifyingthe power structure would be, as hasbeen frequently asserted by theinternational agencies, the introductionof radical land reforms...Given thesocial character of political forces inPakistan, it would be unrealistic todraft a strategy incorporating the‘required land reform’ for theachievement of sustainabledevelopment. Alternatively, we presumethat … rapid human development andthe pro-poor growth of a marketeconomy could create an environmentin which the capability, leadership andresources of the rent-seeking power


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elites could be mobilized fordevelopment [how and by whom?].

Given limitations and problems [withPRSP], Japan’s ODA should stressconsistency with the PRSP and at thesame time have medium- and long-term perspectives…

Japan is committed to helpingPakistan to improve its debt servicingcapacity and achieve high economicgrowth, and for this purpose will resumeassistance for high-qualityinfrastructure development with yenloans [rather than grants becauseinfrastructure for the middle class?].

For the authors of the Review, and for JICA,development is seen essentially aseconomistic and service delivery. Claims tothe contrary, the political economy analysisis then naturally quite narrow in scope.Sustainability considerations pay no realattention to the environment, especially topeoples control over natural resources. Weshould then not be surprised that therecommended strategies for ODA areunlikely to promote basic rights of people,and may even do the reverse underconditions of neo-colonial imperialismmasquerading as globalisation and ‘waragainst terror’.

Among the serious questions not raised bythe Review are those that relate tomilitarisation of the polity and economy ingeneral and the expanding economiccontrol by the armed forces, directly and

through their foundations.20 The humanrights consequences are severe, asexemplified by the repression of peasantsin Panjab who have challenged thecontinued role of the military as landlordsover government land.21

When properly framed, donor guidelines forprojects can help to mitigate adverseimpacts. The ADB and WB have (relatively)comprehensive guidelines for their staff(though being gradually weakened andrepeatedly violated). How does Japan ODAfare? JBIC last published its guidelines in2002. A JICA document revised this yearalso sets out a basic framework.22 It wouldseem that these guidelines apply only todirectly aided projects, i.e. that complaintsagainst IFI projects will not be taken upformally by either of these agencies.

The JBIC Guidelines apparently extend toall future projects of direct assistance.They provide a welcome, broaddetermination of adverse impacts, and onecan only wish that they would actually beapplied to Japan ODA and reduced theimmense suffering of people.

However, extracts from guidelines providelittle optimism for reversing seriousproblems in Japan ODA. The JICAGuidelines seem to apply to projects wherethe client government requests JICAassistance for dealing with social andenvironmental problems. It is not obviouswhy an undemocratic client government willso request JICA; it is not clear that JICAcan then be asked to do this task by the


121

Japan government; and whether the clientis then bound by recommendations of areport that it did not ask for. As furtherreading reveals, one should also havereservations about the seriousness ofagency intentions for genuine compliance.

Since there is not much difference betweenthe JICA and JBIC Guidelines, we quoteextracts together.23

In its confirmation of environmental andsocial considerations, JBIC placesimportance on dialogue with the hostcountry [but not its people?] regardingenvironmental and socialconsiderations, while respecting thesovereignty of the host country[regardless of internationalcommitments? Of the Japanconstitution?].

When third parties [from Japan only?]point out in concrete terms thatenvironmental and socialconsiderations are not being fullyundertaken, JBIC forwards such claimsto the borrowers and, if necessary,encourages them to request the projectproponents to take appropriate action.

If JBIC judges that there is a need forimprovement in the situation withrespect to environmental and socialconsiderations, it may ask the projectproponent, through the borrower, totake appropriate action in accordancewith the loan agreement [and if that isincomplete?]. If the response of theproject proponent is inappropriate,

JBIC may consider … suspension ofthe disbursement [and let people sufferwithout remedial actions?].

The guidelines outline JICA ’sresponsibility and procedures, andrequirements for the recipientgovernments to facilitate [but notcompel?] achievement of theobjectives.

Various documents prepared throughthe EIA process and reports (EIAdocuments)must be written in officiallanguages or in languages familiar topeople within the host countries.Documents written in understandablelanguages and forms for local peoplemust be prepared and explained tothem. It is requested [but notmandated] that EIA documents bemade open to local stakeholdersincluding local people. In addition, EIAdocuments should be available forpublic reading at all times, and themaking of copies of these for the localstakeholders should be permitted.[what is the responsibility of Japan ifrecipients fail to do any or all of these?]

‘Environmental impact assessment’means evaluating environmental andsocial, analyzing alternative plans andpreparing adequate mitigationmeasures and monitoring plans inaccordance with laws or guidelines ofthe recipient governments [and what ifthey are weak as compared tointernational standards?].


122

JICA makes a decision to stopcooperation projects and recommendsMOFA to do the same when JICAconcludes that it is impossible toensure environmental and socialconsiderations even if the abovemeasures are taken. [how then isMOFA made accountable to affectees?]

Revised in 2003, the ODA Charterrepresents the official framework forinternational assistance – to be certainlyfollowed by Japanese governmentagencies, and likely to be also aconsensus of State elites.24 Excerpts areilluminating — as inconsistent goals, aswell as for deviance between precept andpractice (as the case studies illustrate).

Among Basic Policies, and Priority Issuesthe Charter includes “Perspective of humansecurity; Poverty reduction; Sustainablegrowth.” The Principle of ODAImplementation makes clear that thisrequires “Environmental conservation anddevelopment should be pursued intandem.” Further, “Any use of ODA formilitary purposes should be avoided; Fullattention should be paid to militaryexpenditure, their development andproduction of weapons of mass destruction,and export and import of arms.”

So how will additional ODA to Pakistan bejustified when it is widely felt that nuclearcapability was attained and nucleardevelopment pursued by covert transfers ofpublic resources, including ODA? 25

Presumably Japan’s establishment sleeps

comfortably by ignoring this Principle, andbeing quite confused about the implicationsof another Principle (which has its owninconsistencies) – “Full attention topromoting democratisation, introduction ofa market economy, protection of basichuman rights and freedom.”

And how will policy be formulated andimplemented? Mostly by Japan andinternational bureaucrats in the donorcommunity, with a token reference todomestic and international NGOs. Explicitconsultations with citizens are restricted toJapan.

Donors meet annually with government inIslamabad at the Pakistan DevelopmentForum to make public their consensualperspectives in a spirit of ‘harmony’. At the2004 Forum, it is notable that the Japandelegation chaired a single session, andthat too on Water ResourcesDevelopment.26 For Pakistan this usuallymeans mega projects that rob the many toenrich the few, i.e. whose history is bothcontestable from the view of efficiency andequity, and evidently depriving many poorpeople from secure life and livelihood.

Being considerably more influential inManila than in Washington, the mostimportant conduit for Japan ODA (and stateinterests) remains the ADB. What is it thatthe ADB says should be done for Pakistanand why?

Towards the end of September 2004, theBank issued a significant press release


123

after a Board update of the CountryAssistance Strategy. It welcomed theimprovement in GDP growth, exports andremittances – all macroeconomicindicators. Notably missing was anyreference to poverty and unemployment,conveniently since both the incidence andintensity of poverty have been increasing.The data on remittances is self-servingsince neither government nor donors canclaim credit for increased remittances —except perversely, since remittances arecoming at high levels in consequence of the‘war on terror.’

The ADB goes on to state that:

The program in Pakistan will put newemphasis on assisting infrastructureprojects with greatest impact for growthand poverty reduction over the next twoyears. ADB supports the Government’sshift in emphasis toward highersustained growth to ensure that thebenefits of structural reforms that aretaking place reach the poor. Priority willbe on rehabilitating existinginfrastructure in irrigation, roads, andurban centres, as well as addressingcritical gaps in the power sector. ADBwill also promote public-privatepartnerships for infrastructuredevelopment through a combination ofloan and risk mitigation products.

Additional details from the CountryAssistance Strategy are revealing in ADB’svision of development strategies forPakistan (extracts in the Appendix).27

These are no doubt shared by the Japanaid establishment. ADB expects(supplementary?) contributions from Japanto include:

Potential support to improvement inelectric power distribution. JBIC [is]currently providing financing for Ghazi-Barotha for transmission lines. JBICwill also support public-privatepartnerships [privatization?] andpromote effective electricity distributionand tariff collection, and providefinancial assistance for hydropower[mega dams?] and rural electrification.

SME enterprise development program,investment promotion, and informationtechnology promotion [pro-poor?]. JBICto also support SME development.

Support for Irrigation and drainageimprovement program [ignoringdownstream impacts?]. Flood controlassistance [diversionary boondogglesor Chashma-type disasters?]. Supportfor water resources developmentprogram [mega projects?]. JBICsupport for sustainable irrigationdevelopment [corporatization?].

Support for urban water supplyschemes, environmental monitoringsystems, solid waste management andsewage disposal [more Korangi andBaldia boondoggles?]. JBIC’s supportfor organizational reforms in urbanwater supply [privatization?].


124

On the other hand, this is what the ADBCountry Director has to say:28

ADB has endorsed the Government’sreform program and has provided anassistance of $3.2 billion during 1999-2002 in support of the reform effort andinvestments for poverty reduction andeconomic growth. Over the lastdecade, the ADB’s development policyin Pakistan … shifting from anemphasis on infrastructure projects toa more defined focus on povertyreduction

Are these real conflicts between Manila andIslamabad, or just the usual double-speakof IFIs?

4. Improving ODA

From the perspective of peoples both inJapan and Pakistan, all ODA problemspoint to the core issue of conceptualisationof projects and programmes. What can wedo to push for a rights-based developmentagenda, so that ODA no longer remains an“Odious Debt Alliance?”29 What can we doto ensure that aid institutions – in Japanand in IFIs, as well as in Pakistan –acknowledge and accomplish a moresignificant role of people and communitiesin the selection, design and implementationof projects?

Japan aid agencies have seriousoutstanding obligations towards poorpeople substantially hurt by its fundedprojects – directly and through IFIs.Restitution as compensation for damages

and restoration of livelihoods must becomprehensive and prompt. There are twoways in which this can be done. One is tocancel debts with the condition that debtservicing saved is applied for this purpose.Another route is allocating additional fundsin new projects for the purpose (andconditionality). There is a precedent for thisin the Ghazi-Barotha Hydropower Project,where funds for the new project were madeconditional on adequate compensation toaffectees of Tarbela Dam. As long as Japanaid agencies deny their obligations toredressal, what can be done to haltadditional projects?

We may be able to reform only future ODA.How then could Japan ODA agencies suchas JICA and JBIC be persuaded to evaluatecompliance with guidelines in aparticipatory manner with affectees andthen stop funding projects if their guidelinesare not being implemented?

These (limited) issues have, in fact, beenraised repeatedly even within the Japan aidagencies themselves. Almost a decadeago, a JICA Aid Study Committee posedthe issues as follows:30

Why is it necessary to incorporate theconcepts of participatory developmentand good governance into theimplementation of Japan’s aid todeveloping countries? How should theybe incorporated?

What should be taken into account inthe actual process of aid planning and


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implementation? What specific typesof aid will promote participatorydevelopment and good governance indeveloping countries?

What are the relevant challenges andpoints to be borne in mind whenimplementing aid?

In its recent Annual Report, JICA includesin its “Pillars of Aid – Eradication ofPoverty,” the need for “approaches tostructural issues by examining reasonswhy the [Southwest Asia] region has somany poor people, and why the number ofpoor people does not decrease despiteeconomic development.” How do we holdJICA accountable for actions consistentwith its pronouncements?

However one phrases the responses, theoutcomes of the answers largely depend onwhat Japanese civil society organisationswant to and can do. Within Japan, it is aquestion of the scope of greater politicalaction – lobbying with publicrepresentatives as well as with governmentrepresentatives in IFIs (such as theExecutive Directors in ADB and WB).

More meaningful accountability is alsoneeded from ODA organisations such asJICA and JBIC, including the participation ofJapan NGOs in post-project evaluations.Stronger complaint mechanisms need to beestablished, which not only cover directlyaided projects but also require a publicresponse from government agencies whena complaint is filed with IFIs supported byJapan ODA.

These are difficult tasks since the Japangovernment acts (as do most governments)as if its primary accountability is to otherclient governments rather than to people –e.g. as late as 2003, the MOFA-ledWorkshop on ODA Evaluation was confinedto participants from other governments.31

Some advocacy NGOs of Japan ( such asJACSES) have recently begun activecollaboration with organisations inPakistan.32 This needs to become bothmore extensive and intensive. Exchange ofinformation is useful but cannot replacemore frequent and extended visits toPakistan by Japan NGOs. When the visitsare in genuine solidarity there can be nofear of critical interactions betweencomrades who deny cultural andgeographic borders constructed by stateelites. Capital is unified in the new globalorder: labour has no choice but to seekuniversal solidarity for social justice.

It is evident that serious problems in JapanODA are shared by most recipientcountries. Hence the need for fundamentalreforms in all ODA, including that fromJapan. The direction of reforms –‘harmonised’ across donors — can besummarised through a recent statement bythe Reality of Aid network (Focus onGovernance & Rights in International Co-operation).33

Development co-operation programs toreflect binding obligations under humanrights law and the rights based approach,including the right to development


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Any terms must be fairly andtransparently negotiated with participationof and accountability to people living inpoverty

Efforts to achieve MDGs must befounded on strategies that empower andrecognise the rights of all people,including the poor no matter where theylive

Aid should support governments,representative institutions andlegislatures in formulating nationalpoverty reduction strategies; aid shouldnot determine the process; IFIs must notremain the monopoly providers of policyadvice or the gatekeepers on resourcetransfers

Aid should be treated as money held intrust for the poor

Ministry of Foreign Affairswww.mofa.go.jp/policy/oda/white/2001/contents.pdf (Japan’s Official DevelopmentAssistance White Paper 2001)

www.mofa.go.jp/policy/oda/reform/revision0308.pdf (ODA Charter 2003)

JICAwww.jica.go.jp/english/publication/studyreport/country/pak/pdf/pak_01.pdf(Country Study for ODA to Pakistan 2003)

www.jica.go.jp/english/publication/studyreport/country/part/part_03.html(Participatory development and goodgovernance report of the Aid StudyCommittee 1995).

www.jica.go.jp/environment/guideline/pdf/guideline_eng.pdf (JICA Guidelines forEnvironmental & Social Considerations)

www.jcif.or.jp/e/about/ (Japan Center forInternational Finance)

JBICwww.jbic.go.jp/english/environ/guide/finance/eguide/pdf/guide.pdf (JBICGuidelines For Confirmation OfEnvironmental And Social Considerations)

www.jbic.go.jp/english/oec/environ/hand/index.php (JBIC Handbook on SocialDimensions for ODA Projects)

www.jbic.go.jp/english/base/achieve/annual/2000/pdf/2000.pdf (Japan Bank forInternational Cooperation, Annual Report)

Appendices

Extracts from Official DevelopmentAssistance to Pakistan, Japan Embassy-JICA-JBIC

Extracts from Country Strategy andProgram Update 2004-22006, AsianDevelopment Bank, Manila: July 2003

Selected Web Links

Embassy of Japanwww.pk.emb-japan.go.jp/ECONOMIC/ODA%20Pamphlet/ODA%20toppage.htm(Official Development Assistance toPakistan published by Japan Embassy)


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Asian Development Bankwww.adb.org/Documents/CSPs/PAK/2003/default.asp (ADB Country AssistanceStrategy 2004-2006)

adb.org/Inspection/Projects/Chasma/appendix01.pdf;

adb.org/Inspection/Projects/Chasma/appendix03.pdf (Complaint on Chashmafiled with the ADB in 2002)

www.adb.org/Media/Articles/2004/5674_pakistan_inspection_committee/default.asp?RegistrationID=6684 (ADBBoard Response to Complain on Chashma)

www.adb.org/Inspection/Projects/korangi_wastewater_creed.asp (ADBversion of complaint filed for KorangiWastewater Management Project)

World Banktextsearch.worldbank.org/servlet/SiteSearchServlet?q=japan+assistance+to+pakistan(World Bank survey of Japan ODA)wbln0018.worldbank.org/IPN/IPNWeb.nsf/(attachmentweb)/PAKNoticeofRegistration/

$FILE/PAKNoticeofRegistration.pdf(Complaint on National Drainage Plan filedwith the World Bank in 2004)

Government of Pakistanwww.finance.gov.pk/survey/home.htm(Annual Economic Survey)

www.sbp.org.pk/reports (Annual Report bythe State Bank)

Otherswww.chashma-struggles.net/ (Activistwebsite on Chashma Irrigation Project)

www.bicusa.org/bicusa/issues/ (Aid-watchwebsite of the Bank Information Centre)

www.forum-adb.org/policies (Aid-watchwebsite of the NGO Forum on the ADB)

www.focusweb.org/main/html/index.php(Development website of Focus on theGlobal South)

www.realityofaid.org/Asia/ (Aid-watchwebsite of the Reality of Aid Network)


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APPENDIX

Official Development Assistance to PakistanJapan Embassy-JBIC-JICA

JAPAN, A TRUSTED DEVELOPMENT PARTNER TO PAKISTAN SINCE 1952

Japan and Pakistan in April 2002 commemorated the 50th anniversary of diplomaticrelations between the two countries. Japan opened its Embassy in Karachi on 28th ofApril 1952, and initiated its economic assistance with provision of technical assistancein 1954; ODA loan in 1961 and grant aid in 1970 and has continuously played animportant role in Pakistan’s development.

Both the countries have been enjoying very cordial and friendly relationship for the lastfive decades. Japan through its Official Development Assistance (ODA) has long beensupporting Pakistan in a wide range of fields including development of large-scaleinfrastructure, social sector projects as well as human resource development. Thecommitment of Japan being a development partner to Pakistan is unchanged and Japanwill continue to assist the country in its efforts to reduce poverty by addressing theprioritized areas of assistance.

JAPAN ASSISTED PROJECTS IN PAKISTAN IN VARIOUS SECTORS

In 2003, Study Committee on Japanese ODA to Pakistan, comprised of Japaneseacademics, Embassy of Japan, JBIC, and JICA, completed its study on Japanese longterm assistance strategy to Pakistan. The Committee concluded that Japan shouldassist Pakistan’s efforts for sustainable development.

In order to achieve such a goal, Japan is actively supporting the efforts of theGovernment of Pakistan to revive its economy and to reduce poverty through series ofreforms and Poverty Reduction Strategy Paper (PRSP). In doing so, seven areas wereidentified as being crucial: ‘Health’, ‘Education’, ‘Water’, ‘Economic Infrastructure andDevelopment’, ‘Governance and Economic Reform’, ‘Agriculture’, and ‘Environment’.

HEALTH The Japanese government is supporting Pakistan’s efforts to reduce infantmortality rate. Since 1996, under Expanded Programme of Immunization (EPI) of thePakistani government, continuous support for procurement of oral polio vaccine hasbeen provided that constitutes almost half of the total vaccine requirements to eradicatepolio among Pakistani children. Similarly, grant is also being extended for immunizationagainst Neonatal Tetanus, since 2000. Technical cooperation is also expected to beginon TB control for the DOTS implementation in Punjab.


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Pakistan Institute of Medical Sciences (PIMS) is one of the prominent examples,where the Government of Japan has supported the improvement of health services andhuman resources development. Japan continues to provide its support to health sectorthrough programs such as In-country training “Safe Management of Newborn Infants”which has been conducted since 2001 in Children’s Hospital, a set up with in PIMS.Another In-country Training “Safe Motherhood” will be carried out starting from this yearin Mother and Child Health Care Center (MCHC) which is also a part of PIMS.

In addition, Japan has started a study on Improvement of Management InformationSystems in Health Sector since January 2004. The major objective of this study is toformulate a national action plan for the improvement of health information system,which will respond to the information needs at each level of public health servicedelivery.

Education Balochistan Middle Level Education Project is an ongoing ODA loanproject that aims to improve access and quality of middle level education and reducegender disparity in the province of Balochistan. Japan supports upgrading of 200primary schools to middle schools, construction of science rooms and technicalworkshops, together with the provision of necessary equipment. The project scope alsoincludes recruitment and training of general and technical teachers.

Government of Japan has also assisted for strengthening literacy programs inPakistan. Japanese experts were dispatched to EFA Wing, Ministry of Education inorder to strengthen the function of policy formulation and coordination capacity of EFAWing. A 3-year project for improving the District Literacy Programs will also be startingto establish Literacy Management Information System (LitMIS) in 4 districts of Punjab

Water

Irrigation In this sector, the Japanese Government has been the prime bilateral donoralong with multilateral donors as the World Bank, and has provided assistance throughODA loans, grant assistance and technical assistance. Under On-farm ManagementProject, which is an ODA Loan project, watercourses at the on-farm level wereimproved, training centers were established, and farmers and government officialsreceived trainings. Japan is also assisting a project such as National DrainageProgram, which is co-financed by the World Bank and Asian Development Bank.

Water Supply and Sanitation Unsafe water and insufficient sanitation lead to highmortality and water borne diseases, and Pakistan, along with other developing


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countries greatly suffers from such problems. In this sector, the Japanese Governmenthas assisted through ODA loans, grants and technical assistance.

Metropolitan Water Projects (Khanpur I and Simly), which were completed in 1997 and2000, are ODA Loan projects aimed at building water supply system in Islamabad andRawalpindi. Karachi Water supply Project is another project, which is currently beingimplemented to strengthen water supply capacity at Hub and Pipri treatment plants.

Economic Infrastructure and Economic Development

Transportation Kohat Tunnel Construction Project is an ODA Loan project that wascompleted in 2003. The project was a first major tunnel project in Pakistan, aiming toremove the impediments in Indus Highway (N55), which the Japanese Government hasbeen assisting for many years. There is another on going project for rural roaddevelopment, which is administered by Federal Ministry and implemented by ProvincialGovernments. Japan is also extending various technical assistance and trainings, suchas dispatching advisor to NHA.

Power Ghazi-Barotha Hydropower Project is one of such ODA Loan projects co-financed by various donors including the World Bank, the Asian Development Bank,and the Islamic Development Bank. The project is expected to cover the estimatedincrease in power demand in Pakistan and change its dependency from thermal powerto hydropower. Japanese Government has also provided assistance for ODA loanprojects such as rural electrification, national grid line strengthening, and powergeneration such as Bin Qasim and Jamshoro.

Private Sector and Investment Japan has cooperated in projects designed topromote the development of Pakistan’s industries. In 1977, Japan extended the firstODA loan for the establishment of two cement plants and provided grant assistance forthe establishment of “National College of Textile Engineering in Faisalabad”.

‘Establishment of Geo-science Laboratory Project’ was carried out in 1989 and 1990through grant aid support to the Geological Survey of Pakistan for the establishment ofa modern research laboratory, furnished with high degree analytical equipment forexploration of the very rich natural resources of Pakistan.

Japan is also providing support for ‘Pakistan Industrial Technical Assistance Center(PITAC)’, Lahore in the filed of ‘Plastic Molding Technology’ by means of Project-TypeTechnical Cooperation for a period of four years. The project which was started inSeptember 2002 currently has 4 Japanese experts who are training the local manpowerin this new technology.


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GOVERNANCE Japan will continue the training programme on “Local Administration”for 30 young officials from key fields, selected each year from various federal/provincialgovernment departments, thus contributing to Pakistan’s future development. Also, inorder to enhance administrative capacity of local government, a technical cooperationproject will be carried out in three selected districts of Punjab. Support will also beprovided to develop an effective monitoring mechanism under PRSP.

AGRICULTURE A grant was provided in 1993 to the National Agricultural ResearchCenter, Islamabad for establishment of “Plant Genetic Resource PreservationLaboratory” to conduct research for development of high-yield plants. A five-year ProjectType Technical Cooperation was implemented in 1993 through 1998. NumerousJapanese experts were dispatched and provided their expertise in enhancing thecapacity of the local scientists through transfer of technology and skills in areas ofgenetic resources preservation.

Environment Japan is focusing mainly on Urban Environmental Protection in theareas of Air & Water Pollution and Solid Waste Management

Currently, two Japanese experts are working with the Pakistan EnvironmentalProtection Agency (Pak-EPA). One expert deals with Urban Environmental Protectionwhich includes: Air Pollution Control, Water Pollution Control and another expert isworking in the area of Solid Waste Management on a project called “IntegratedManagement of Solid Waste”.

In addition to dispatching experts, studies for two projects will be carried out in nearfuture: A Basic Design Study for “Establishment of Environmental Monitoring System inPakistan” and “Master Plan Study on Karachi Industrial Wastewater Management”.


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LENDING PRODUCTS

(i) Table A3.1: Sustainable Livelihoods in Barani Areas Project (Punjab)

(ii) Table A3.2: Agriculture Diversification and Agribusiness Development

(iii) Table A3.3: Cleaner Fuel

(iv) Table A3.4: Balochistan Public Resource Management Program

(v) Table A3.5: Southern Punjab Basic Urban Services

(vi) Table A3.6: Decentralized Social Services

(Balochistan, North-West Frontier Province, Punjab, and Sindh)

(vii) Table A3.7: Restructuring of Technical Education and Vocational Training System

(viii) Table A3.8: Rawalpindi Environment Improvement

(ix) Table A3.9: North-West Road Development Sector and Subregional Connectivity

(x) Table A3.10: Balochistan Rural Development and Drought Mitigation

(xi) Table A3.11: Sindh Coastal and Inland Community Development Project

(xii) Table A3.12: Renewable Energy Development

(xiii) Table A3.13: Punjab Resource Management Program—Subprogram 2 and 3

(xiv) Table A3.14: Federally Administered Tribal Areas (FATA) Governance

(xv) Table A3.15: Public-Private Infrastructure Financing Facility

(xvi) Table A3.16: Family Protection Project

(xvii) Table A3.17: Sindh Basic Urban Services

(xviii) Table A3.18: Water Sector Development

APPENDIX

COUNTRY STRATEGY AND PROGRAM UPDATE 2004–2006 PAKISTANASIAN DEVELOPMENT BANK

July 2003


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(xix) Table A3.19: Sindh Forestry Sector Development II

(xx) Table A3.20: Microfinance Sector Development Program II

(xxi) Table A3.21: Punjab Local Justice Support Program

(xxii) Table A3.22: Social Health Insurance

(xxiii) Table A3.23: Subregional Connectivity I

(xxiv) Table A3.24: Power Transmission and Distribution Enhancement

(xxv) Table A3.25: Trade, Export Promotion, and Industry Program (TEPI) II

NONLENDING PRODUCTS

(i) Table A4.1: Water Sector and Irrigation Development in Pakistan

(ii) Table A4.2: Strengthening NGO Engagement in ADB Policy and Operations

(Balochistan and Punjab)

(iii) Table A4.3: Punjab Resource Management Program

(iv) Table A4.4: Strengthening Alignment of ADB Operations to Devolution

(v) Table A4.5: Enhancing Pakistan’s International Competitiveness

(vi) Table A4.6: Private Sector Infrastructure Financing

(vii) Table A4.7: Decentralization Support Program

(viii) Table A4.8: Border Area Rural Development (NWFP)

(ix) Table A4.9: Energy Sector Development Fund

(x) Table A4.10: Pension Reform

(xi) Table A4.11: Balochistan Basic Urban Services

(xii) Table A4.12: Provincial Road/Rural Access (Cluster TA II)


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Endnotes

* Taking note of discussions at the Conference andthe Symposium at Sophia University, this is arevised version of the Country paper delivered atthe Conference. The author works for the SouthAsian labour movement as Senior Fellow at PILER,and joins broader activist solidarity in Pakistan asa Co-ordinator of the creed alliance. However,neither PILER nor creed assumes agreement orresponsibility for all of the views expressed in thepaper.

1 www.jbic.go.jp/autocontents/english/news/2003/000006/ There is a general impression that onlylow levels of aid were provided since 2001; this ismistaken, as evident from the information given bythe Japan Embassy: “a grant of $300 million waspledged in November 2001;” see OfficialDevelopment Assistance to Pakistan, Embassy ofJapan: Islamabad [www.pk.emb-japan.go.jp/ECONOMIC/ODA%20Pamphlet/Overview.htm].

2 Following debt cancellation of around a billiondollars, the US has begun to implement large-scaleeconomic and military grant aid to Pakistan. Itwould be surprising if Pakistan’s nuclearweapons program did not obtain additionalfinancial resources without visible allocationsfrom the public budget. President GeneralMusharraf has repeatedly stated that Pakistan‘joined’ the ‘war on terror’ because its nuclearassets came under threat (from whom?).

3 Japan NGOs may want to focus additionalattention on DFI from Japan — since the divisionbetween private and public sectors should beseen more as a division of who managesresources rather than who owns resources.General and specific subsidies given to Japanindustry by Japan and Pakistan are a specificintervention. A dubious impact on Pakistandevelopment is evident from the coincidentexpansion of Japan auto industry and decline ofpublic investment in mass transit. Is it any wonderthat Japan ODA supports road projects ininfrastructure assistance?

4 The paper would have but could not benefit fromthe requested sharing of information from IFIs andJapan agencies resident in Islamabad. Countryoffices of WB and ADB were similarlyunresponsive. The knowledge of power amongthe few clearly excludes many from the power ofknowledge.

5 Official data sources of the Pakistan governmentare the Economic Survey by the Ministry ofFinance [www.finance.gov.pk/] and the AnnualReport by the State Bank [www.sbp.org.pk/reports/]; the latter is considered lesspropagandist though both are largely socialabstractions. It is not clear if this includescontingent liabilities on account of private externaldebt.

6 Official Development Assistance to Pakistan,Japan Embassy: Islamabad [www.pk.emb-japan.go.jp/ECONOMIC/ODA%20Pamphlet/Overview.htm. A list of projects is provided inwww.pk.emb-japan.go.jp/ECONOMIC/ODA%20Pamphlet/ODA% 20projects.htm. Seealso Japan as Top Donor, Japan Embassy:Islamabad [www.pk.emb-japan.go.jp/Booklet/Economic%20Relations/Japan%20Top%20Donor.htm].

7 News Release, ADB: Manila, September 27, 2004[www.adb.org/Documents/News/2004/nr2004124.asp] and Country Strategy AndProgram 2004–2006, ADB: Manila, July 2003[www.adb.org/Documents/CSPs/PAK/2003/default.asp]. The strategy and program arediscussed in a later section.

8 As things go, overseas labour has little officialrecognition of its major contribution to the Pakistaneconomy.

9 National Drainage Program: A Curse for CoastalCommunities, ActionAid: Islamabad, September2004; see also submission to Inspection Panel ofthe World Bank. Displacement, Dislocation andAdverse Impact of Chashma Right Bank IrrigationProject, NIPA: Karachi, June 2003 [www.nipa-khi.edu.pk/Perils-june2003.pdf]; NGO Visit to theAsian Development Bank’s Chashma Right Bank


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Irrigation Project (CRBIP) in Pakistan: TripReport, Bank Information Centre: Washington DC,March 2004 [www.bicusa.org/bicusa/issues/Chashma_Trip_Report_final_March_15.pdf];ChashmaRight Bank Irrigation Project, NGO Forum on theADB: Manila [www.forum-adb.org/projects]; seealso submission to the Inspection Committee of theADB. Market Friendly Rights: The ADB Access toJustice Programme, PILER: Karachi, Social Watch[www.epw.org.in/]. Poverty Reduction in Sindh:Donor Strategy in Search for Country Vision,PILER: Karachi, Social Watch. ADB KorangiWastewater Project: Ill-Conceived Boondoggle,creed: Karachi; Dirty Business Newsline June1999. ADB-Funded KWSB Sewage Plan forBaldia, Urban Resource Centre: Karachi[www.urckarachi.org/iswm.htm]. Pakistan’sKarachi Water and Sewerage Board – WorldBank’s Guinea Pig on Water Privatization inSouth Asia, NGO-Forum on the ADB: Manila,August 1998 [www.forum-adb.org/RESOURCES/Briefers/0124.pdf]; Urban Water Reforms: WhoseWater? Whose City? in The Politics of ManagingWater, Oxford Univ Press: Karachi. SecuringFisherfolk Rights in Environmental Law andPolicy, Shirkat Gah & PILER: Karachi._

10 For example, construction involves bonded adultand child labour in brick kilns. See Forced Labourin Pakistan, Asia Pacific Research NetworkJournal, Manila, December 2003[www.aprnet.org/journals/9/v9-2.htm] or UnfreeLabour in South Asia, Economic & Political Weekly,May 29, 2004 [www.epw.org.in/].

11 For critical views disseminated by JICA through itsjournal, see e.g. Approach to Poverty Reduction inDeveloping Countries and Japan’s Contribution,Technology and Development, No.16, January2003; and, On the Effectiveness of the PRSPRegime, Technology and Development, No.17,January 2004 [www.jica.go.jp/english/publication/studyreport/topical/articles/]. The former article ismore sensitive to the political economy of aid anddevelopment.

12 A key political problem in all aid to Pakistan is thatthe government of Pakistan has always madeeven the most far-reaching agreements with

donors without any endorsement or subsequentreview by the National Assembly. Provinces arenow following suit for direct agreements withdonors without discussion by the provinciallegislature. Even projects for enhancing municipalservices are approved by the federal or provincialgovernment without substantive consultation withpublic representatives in local government.

13 For e.g., a provincial government (Sindh) invitedNGOs to join in framing the provincial povertystrategy paper. Naturally the NGOs refused to beconstrained by the framework of the draft PRSPproduced by consultants for the federalgovernment: e.g.Poverty Reduction in Sindh:Donor Strategy in Search for Country Vision,PILER: Karachi, Social Watch. The government’sreaction to NGO suggestions was to simply handover the work to a ‘development professional’,who dutifully produced the standard, technocratic,report required by IFIs. His task was made easierby the fact of being a former World Bank staffer.

14 See e.g. various publications by the Reality of Aidnetwork, and by Focus on the Global South.

15 Perhaps frankness is impossible with bureaucratsanywhere – not much was in evidence at theTokyo-based meetings with senior officials ofJICA, JBIC and MoFA.

16 Ex-post Evaluation on ODA Loan Projects 2003,JBIC: Tokyo, February 2004 [www.jbic.go.jp/english/oec/post/2003/index.php].

17 Annual Report, JICA: Tokyo, September 2003.

18 Country Study for Japan’s Official DevelopmentAssistance to the Islamic Republic of Pakistan:Development Towards a Sustainable Society –Medium and Long-term Perspectives, JICA:Tokyo, November 2003 [www.jica.go.jp/english/publication/studyreport/country/pak/pdf/pak_01.pdf]; emphasis added. The web summaryis at www.jica.go.jp/english/publication/studyreport/country/pak/index.html. The studyteam was led by Professor Shigemochi Hirashima(of Meiji Gakuin University), a respected academicin Pakistan since his fieldwork for Ph.D. at CornellUniversity.


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19 A comparison of the review summary posted onthe JICA website with the full Review isilluminating. Taking the web summary as closer toofficial thinking, it is apparent that the official viewwill not admit of being seriously influenced by thestudy, perhaps because negotiations within theJapanese establishment on the new ODA Charterhad already been completed before the JICA studywas completed.

20 See Militarization of Globalization: Impacts uponEconomic & Social Rights of Labour, APRNConference on War and Terror: People’sRights & the Militarization of Globalization,Beirut: November 2003, in PILER: Social Watch;South Asian Labour for Peace & Development,Conference on Peace in South Asia, University ofTexas: Austin, April 2004, in PILER: Social Watch.

21 See www.satribune.com/archives/oct19_25_03/P1_grab.htm, and a fuller expose in SoiledHands:

Pakistan Army’s Repression of the PunjabFarmers’ Movement, Human Rights Watch[hrw.org/reports/2004/pakistan0704/ ].

22 Guidelines For Confirmation Of EnvironmentalAnd Social Considerations, JBIC: Tokyo, April2002 [www.jbic.go.jp/english/environ/guide/finance/eguide/pdf/guide.pdf]; Guidelines forEnvironmental & Social Considerations, JICA:Tokyo, April 2004 [www.jica.go.jp/environment/guideline/pdf/guideline_eng.pdf].

23 Emphasis added.

24 Revision of Japan’s Official DevelopmentAssistance Charter, Ministry of Foreign Affairs:Tokyo www.mofa.go.jp/policy/oda/reform/revision0308.pdf. We cite the summary given byJICA in its Annual Report 2003.

25 Under Pakistan’s political system, the militarybudget is not open for debate by the NationalAssembly. According to General Musharraf,

oversight of the entire nuclear programdevelopment was restricted to the President,Chief of Army, and the Prime Minister. Most PrimeMinisters would deny serious consultation.

26 www.worldbank.org/PAKISTANEXTN/Resources/Pakistan-Development-Forum-2004/PDF2004-Agenda.pdf.

27 www.adb.org/Documents/CSPs/PAK/2003/default.asp

28 Country Director Pakistan Resident Mission,speaking at a National Seminar on Child Labourorganised by Ministry of Labour, Manpower andOverseas, Government of Pakistan incollaboration with the Social Policy andDevelopment Centre (SPDC) on 15 October atIslamabad [www.adb.org/Documents/Speeches/2003/ms2003077.asp].

29 This is not the place for discussion on adevelopment agenda. These perspectives areavailable in a note written at PILER for the Five-Year Plan (2005-10) Working Group on PovertyReduction, Social Protection, Nutrition and IncomeDistribution.

30 Participatory Development And GoodGovernance Report Of The Aid Study Committee,JICA: Tokyo, March 1995 [www.jica.go.jp/english/publication/studyreport/country/part/part_03.html].

31 The Third Tokyo Workshop on ODA Evaluation,MOFA: Tokyo, November 2003 [www.mofa.go.jp/policy/oda/evaluation/2003/workshop.pdf].

32 JICA has a NGO Partnership program for JapanNGOs but which is focused on service delivery,and hence unlikely to be suited to NGOs thatadvocate critical engagement with government,i.e. debate ODA perspectives and dispute projectimpacts.

33 Annual Report for 2004, published by Ibon:Manila, and Zed Books: London.


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Antonio Tujan Jr.

Japan ODA to the Philippines

San Roque Dam, a $1.19 billion project funded by JBIC,is implemented by a consortium of foreign corporations led by Marubeni

Commemorating the 50th anniversary ofJapanese official development aid isimportant in the light of its significantimpact on development and economy ofvarious countries around Asia and theworld. The Philippines itself is the thirdlargest recipient of Japan ODA after Chinaand Indonesia. [See Table 3 Annex] ThusJapan ODA has been the main source ofsupport for Philippine development projectsand needs since it started 45 years ago in1960.

The Philippineshas received atotal of $9.991billion in netdisbursements,equivalent to43% of alldevelopmentassistancereceived since1960 to 2002.Annually, JapanODA hasgenerally

occupied the dominant share of alldevelopment assistance to the Philippines.While the trend has been somewhat erratic,net disbursements of Japan ODAcomprised 55% of total DAC assistancestarting in 1960 amounting to $37.85 M,already outstripping USAID. In 2002 (latestdata available), it has comprised 62% oftotal DAC assistance and amounted to$318.02 M. [See Table 1 Annex]

The Reality of Aid Asia-Pacific 2005Philippines

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Achievements in infrastructuredevelopment

Such substantial amounts of ODA translateto major accomplishments especially ininfrastructure development since 1969. TheJapan embassy in the Philippines reportsthe following sectoral accomplishments, towit:1

(1) Roads and Bridges

“13% of all National Highways wereimproved through Japan ODA”A total of 260 billion yen (PhP113 billion)have been allocated to national highwayprojects. Thirteen percent (13%) of allnational highways, including the 2,100-kmPhilippines-Japan Friendship Highway (PanPhilippines Highway stretching from Aparriin Cagayan Province to Davao), have beenconstructed and rehabilitated through Yenloans. Two hundred (200) new bridges,including the Second Mandaue-MactanBridge and the San Juanico Bridge, werebuilt while another 200 bridges are underconstruction or repair.

(2) Power and Energy

“Japan assisted 8% of energy generation”A total of 286.6 billion yen (PhP124.6billion) was extended for the construction ofpower plants, which generate 8% of thecountry electricity (including electrificationof poor and rural areas). Japan supportedthe development of geothermal powergeneration as well as the development andinterconnection of power grids.

(3) Potable Water Supply

“Million Filipinos enjoy clean water”Water facilities built by Japanese ODAprovide drinking water to an estimated 13million Filipinos. Two-thirds of all grants tothe sector come from Japan. Japan is alsosupporting rural water supply and waterquality improvement.

(4) Airports

A total of 110 billion yen (PhP 47.8 billion)have been channeled to the construction ofmajor airports, which include the NAIA 2and Cebu-Mactan international airports.These facilities cater to about 13 millionpassengers taking domestic flights andabout 8.3 million passengers takinginternational flights. Three moreinternational airports are being built.

(5) Ports

“62 major and small ports were built”Japan supported the construction,expansion and the improvement of majorports such as the ones in Subic, Cagayande Oro and Batangas. Fifty-nine (59) small-scale ports were also built or rehabilitatedto provide greater access to various areasand facilitate industrial development.

(6) Flood Control

“No more Ormoc disaster”All over the country 22 major flood controlprojects were assisted by Japan. Forinstance, in response to the flash floodsthat killed an estimated 8,000 people in

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Ormoc in 1991, the Ormoc City FloodMitigation Project was completed in 2001.Just after the project completion, Ormocwas hit by another massive typhoon whichhad the same intensity as 1991 storm, butthe Flood Mitigation Project prevented therecurrence of similar devastation.

(7) Agriculture

“129,000 has. were irrigated in 10 years”In the last ten years, more than 50% of allirrigation projects in the Philippines hasbeen funded by Japan, irrigating anestimated 129,000 has. of farmland Japan.

(8) Environment

Japan supports the Philippine Governmentin various environment managementprojects such as reforestation, solid wastemanagement and Metro Manila Air QualityImprovement.

(9) Health

Japan has extended grants and technicalassistance amounting to a total of Yen 20billion (PhP 8.8 billion) for the Philippinehealth sector. The most noteworthyprojects include upgrading and expansionof major hospitals and research institutes,including the Philippine General Hospital,Vicente Sotto Hospital, Davao MedicalCenter, and Benguet Hospital. Services atother regional hospitals were improvedthrough the provision of medical equipment.Japan has also extended its support onresearch center for infectious diseases.

(10) Education

“More than 65,000 classrooms are built”Japan extends grants and loans for theexpansion of school buildings. So far, 1,557classrooms and 156 science laboratories,have been constructed at a cost of P4.4billion under grant-aid while theconstruction of 64,000 classrooms isongoing funded by loan schemes. Japanalso focuses on improving science andmathematics education and teachers’capabilities.

While there is no doubt that Japandevelopment assistance has providedinvaluable support to the development of thePhilippines, there are also significantproblems resulting from the nature of Japanaid and supported projects. A prominentissue is that the bulk of Japan aid to thePhilippines comes in the form of loanswhich contribute to the country’s debtburden. Another significant issue refers tothe character and process of determinationof projects which has resulted in variousnegative impacts to the people.

Contributing to the debt burden

While the scale and results of Japandevelopment assistance is remarkable, theimpressiveness of the performancedisappears when it is noted that this wasnot free assistance, but was providedmainly in the form of loans. Net ODA loansdisbursed since 1969 amounted to$6,230.45 million and constitute two thirdsor 63.84% of total aid amounting to$9,760.14 million from 1964 to 2002.


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[See Table 2 Annex] This constitute thebulk of $16.895 billion outstanding bilateraldebt as of 2003 and is a significant share oftotal outstanding foreign debt of thePhilippines at $57.395 billion as of 2003.

In the context of a prudent fiscal policy,these ODA loans, while arguablycontributing to development, may not benecessary or could even be deemed to beinappropriate in the light of the Philippinesproblematic fiscal position. Philippinepublic debt is equivalent to 70% ofabovementioned foreign debt and totalpublic debt has reached serious proportionsat PhP4.1 trillion. The Philippinegovernment faces a fiscal crisis asrevenues decline to 12.3% of GDP in 2003from 16.9% of GDP in 1996 and the taxeffort of the Bureau of Internal Revenue andBureau of Customs continue to decline to9.6% from 12% and 2.4% from 4.8% in thesame period respectively. As thePhilippines has an automatic debt paymentlaw, the budget deficit continues to balloonto levels of P200B in 2004.

It may be said that much of visibledevelopment in the Philippines in the formof infrastructure would not be presentwithout Japan ODA. It may further beargued that the Philippines is able to availof development projects it would not havebeen able to afford presently because ODAloans were provided. In this way,development is hastened or even ensured.

But on the other hand, it could also beargued that Japan is able to secure its

investments for Philippine developmentprojects by providing ODA loans, many ofwhich are tied, or even if untied, oftennaturally result in awarding of contracts toJapanese companies due to variousreasons.

In the process of bilateral negotiations, thePhilippines accepts projects and loanswhich are not appropriate in the light of itsfiscal situation while not being necessarilyurgent. In this sense, these ODA loansprovide a negative factor for development,endagering the recipient country’smacroeconomic viability. In the absence offunds for economic services andinvestment, the Philippine government iskeen on receiving bilateral aid, even in theform of loans that enhance its debt burden,because such project loans constituteinfusion of needed investment andcontributes to economic pump-priming.This is oftentimes inadvisable for fiscalmanagement, and is useless in the contextof microeconomic poverty reductionprograms.

One aspect which must be considered inthe interest of immediate financial relief tothe Philippines is the fact that thePhilippines continues to pay odious debt ofthe Marcos dictatorship amounting to$1.2B as of end 2003. Much of this debtwent to behest loans and projects withterrible consequences for the people andthe nation. This burden was imposed onour country by the dictatorship without anyform of consultation whatsoever, while the


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dictator and his clique routinely pocketedten per cent or more of disbursements.

A substantial amount of the Marcos debt isbilateral loans by Japan which thePhilippines is still paying. According to thePhilippines Bureau of Treasury DebtMonitoring Division, outstanding Marcosdebt to Japan includes $280 millionoutstanding principal and interest of directloans by the Marcos government andanother amount equivalent to $355 millionoutstanding principal and interest ofrelending. This amount ($635 million)constitutes more than one half of totalMarcos debt still pending. Cancellation ofthis debt would result in substantial relieffor the Philippines at this point.

Growth strategy – promoting people’sdevelopment or foreign investments?

As a country that continues to suffer from acombination of structural and governanceproblems including mismangement ofpublic finances and economic priorites,economic dislocation and marginalization ofweaker sectors of the economy andresulting widespread poverty, thePhilippines cannot just accept any form ofaid on the premise that foreign currencyinfused in whatever form is positive.

Development assistance can help mitigateor even reduce poverty if properly selectedand implemented. Generally suchassistance should be in the form of grantsprovided to social and economicdevelopment programs that were designed

mainly through the participation of recipientcommunities and sectors and implementedtransparently and with their participation.

On the other hand, focusing developmentassistance on big ticket infrastructuredevelopment not only simply creates theillusion of development, but moreimportantly is meant to attract foreigninvestment as the expected engine ofdevelopment. As economic plannersproject massive influx of foreign investmentin their best case scenarios, then thenecessary infrastructure to provide powerand other utilities, transport andcommunications and other supportsystems take on an urgency as adevelopment imperative that is dictated onlyby their desire to realize their own dreamsof maximum development scenarios.

However, the urgency is not real orevidenced by the level of economicdevelopment. On the other hand, thefinancial burden and social, economic andenvironmental dislocation from suchprojects can hardly be compensated bywhatever benefits are forthcoming fromexpected foreign investments.

This process of donor dialogue withgovernment officials, sector programs andpoverty reduction strategies often reflectwhat Sogge terms “the politics of themirror” – addressing potential aid donors “inthe language that is most congenial, andcrucially, most easily reinforces the beliefthat they (outsiders) understand what [therecipient] needs.”2 In such processes, aid


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programs are shaped in favor ofdonor interests where developmentproject approaches, such asprivatization or public/privatepartnerships, result in greateropportunities for investment andtrade for donor country corporationswhile reducing access of the poor toservices.

A graphic example of this is the SanRoque dam constructed on Agnoriver in the Cordillera in thePhilippines. Built at a projected costof $1.19 billion, the San Roque damis meant to provide 345MW of hydroelectricpower besides later add-ons like irrigationfor 87,000 hectares, flood control and waterquality inprovement. The project isimplemented and run by a consortium offoreign corporations led by Marubeni. Theassumption of the project is the massiveinflux of foreign investments especially toCentral Luzon, and the expected shortfall inpower based on this assumption.

The construction of San Roque dam hasnegatively affected thousands of people,mostly indigenous Ibaloi people who lostgold panning livelihood on the river, 4,400individuals were resettled because theircommunities and farms would beinundated, and even more upstream whowill be affected by sedimentation of the riveras a result of the dam. The Ibaloi peopleand their organizations mostly affiliated withthe Cordillera People’s Alliance fought thedam in a long peaceful struggle.

Many of those who were resettled eked outa living as gold panners in the river whileothers were subsistence farmers plantingrice, vegetables and fruits in Pangasinanprovince. While JBIC and the San RoquePower Corporation promised that theaffected people would be resettled inconditions that would be the same or betterthan their original standard of living, manyhave no land or source of income in thecramped resettlement sites that wereprovided.

In 2002, gold panning was banned by theSan Roque Power Corporation along Agnoriver resulting in further economicdislocation to the Ibaloi residents. In thelight of the negative impact of the dam, theIbaloi people as well as farmers and otheraffected residents in Pangasinan aredemanding that the project be stopped andproper compensation be paid to theaffected people.

San Roque Dam constructed on Agno River in the Cordillera


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Another example of such problematicinfrastructure projects being implemented inthe Philippines is the ongoing South CebuReclamation Project. The Cebu SouthReclamation Project (CSRP) and the CebuSouth Coastal Road Project (CSCRP) aretwo final phase components of the MetroCebu Development Plan Phase III (MCDP-III). The reclamation project envisions tocreate 330.9 hectares of additional land forindustrial and export processing use,including modern container and fish portsthat can spur economic growth in Cebu asthe trading center for central Philippines.Projected to have a value of P18 billion, thereclamation project is envisioned tobecome a Special Economic Zone, anindustrial enclave like the Mactan ExportProcessing Zone (MEPZ), and aninternational port.

The CSCRP will create amodern road that includeviaduct, subway andcauseway sections avoidingheavily congested residentialand commercial areas on thesouthern coast of Cebu City.It will provide uninterruptedaccess from the southernMetro Cebu such as Pardodistrict, Talisay City and othersouthern towns in the provinceto the Central BusinessDistrict, seaports and theinternational airport of Lapu-lapu City. A major componentof the road network in Metro

Cebu, the coastal road will provide accessto the development of the reclamation areainto an industrial district.

Both projects are being implemented insections by several Japanese constructioncorporations with the objective of economicgrowth through increased investment andtrade through development of transportinfrastructure and industrial estatedevelopment. However, the developmentbenefits for the tens of thousands of poorresidents along the southern coast of CebuCity remains unclear. Starting fromBarangay Ermita after the Carbon Market atthe central portion of the coast of CebuCity, the southern coast is studded withlarge slum communities carved out of thecoastline reclaimed by the settlersthemselves. Coming from around thevarious islands in the Visayas, as well as

The CSCRP envisions to create 330.9 ha. of additionalland for industrial and export processing use.


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from Mindanao in the south, thesefisherfolk/farming families have beenuprooted economically or by theinsurgency. They have been attracted bythe prosperity of urban Metro Cebu but havefound no decent form of employmentexcept ekeing out a living in subsistenceforms of fishing such as beachcombing,hook and line fishing and fishing usingunmotorized outriger canoes or bancas.Others are lucky to find odd jobs andtrades typical of the urban poor who areworst hit by unemployment.

Many have been negatively affected by theproject as many houses and evencommunities have been demolished to giveway to the project. Others were spared thedemolition but construction work hasprevented them from continuing withsubsistence fishing. Only those withbancas can continue to fish by paddlingbeyond the construction area, but arechallenged by the deeper waters.

Economic planners may say that theseunemployed residents may be expected tobenefit from the trickle down effects suchas employment and livelihood opportunities,but these may only be forthcoming after thespecial economic zone becomes fullyoperational which depends on several otherfactors. Even then, they may still bebypassed by employment opportunities dueto lack of training and capacity.

Consultation or participation?

The Cebu South Reclamation Project wasconceptualized under the Marcos

dictatorship in 1974 as part of a grandmodernization plan of Cebu and suburbsthat included the North reclamation andreclamation and development of LapulapuCity and Cordoba town in Mactan island.Consultation with the poor residents inMetroCebu’s coastal communities werenever conducted under the Marcosdictatorship.

But if the residents were consulted or wereprovided participation in the determinationof the project, it would be clear thatpriorities would be quite different. Ininterviews conducted during the studymade by the Solidarity and People’sAdvocacy Network based in Cebu City, itwas very clear that employment, health,nutrition, education and social serviceswere the immediate concerns of theresidents.

While the issue of tied aid, as well as thefocus on infrastructure development as thecontribution to producing economic growthconstitute important questions and issuesregarding Japan ODA, the ultimatequestion that Japan ODA must address isdevelopment and poverty reduction. Theexperience and record of Japaneseassistance must be measured in how muchit has influenced the development of themajority of the population in recipientcountries and how it has reduced theirpoverty.

The nature of the majority of supportedprojects and programs attest to the focuson technical assistance and project loans


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as against social investment and economicsupport for the poor. Even more important,grants that help strengthen the capacity ofthe poor for participation in development arerare.

Reality of Aid recommendations

On the occasion of the 50th anniversary ofJapan ODA, we would like to take note of anumber of Reality of Aid recommendationsin its 2004 Report which may be relevanttowards strengthening and developingeffectiveness of Japan ODA in contributingto development and poverty reduction incountries of the South.

The unconditional untying of aid,including food aid and technicalassistance, is an acknowledged pre-condition for the contribution of aid tostrengthening local productive capacitiesand livelihoods of poor people throughsmall and medium scale enterprises.The Reality of Aid notes the donorcommitment made at the LCD IIIConference to “enhance the value of theirdevelopment assistance by increasingthe proportion of goods and servicessourced in the recipient LDC or fromother LDCs or developing countries tohelp boost poor-poor economic growth.”3

Japan must take up the challenge of theMillennium Declaration to focus onreducing poverty and increasingassistance. It must establish and beaccountable to a realistic timetable toachieve long-standing commitment to

reach 0.7% of their GNI for OfficialDevelopment Assistance principally asgrants. Global aid increased by 7.2% inreal terms between 2001 and 2002 –marginally up to reach 0.23% of donorGNI and has actually surpassed in 2003the highest amount achieved in 2000.But while this may indicate a reversal inthe decline of global aid, the increasesfall far short of the additional $50 billionestimated by the World Bank as requiredeach year to reach the MillenniumDevelopment Goals. The WHOCommission on Macroeconomics andHealth estimate that a donor investmentof $27 billion a year, on TB, HIV/AIDS,malaria, and other infectious diseasesand nutritional deficiencies, could save upto 8 million lives a year. The UNDPestimate the additional cost of providingbasic education for all is only $6 billion ayear.4 Even a modest rate of increasetowards achieving 0.7% of GNI whileimmediately reducing loans share to lessthan 10% of total would result in atremendous impact in terms ofcontributing to development.Furthermore, selective debt cancellationfor financially threatened countries likethe Philippines would result in substantialfinancial and development relief.

Japan must strengthen ownership andlocal accountability by reducing theirreliance on donor country technicalassistance. Despite the rhetoric onownership, reliance on technicalassistance to increase the capacity ofsectoral ministries in developing


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countries to manage donor projectrelationships, has not diminished. In2002, $15 billion or 38% of bilateral ODAworth $39 billion, was in the form oftechnical cooperation. From a rightsperspective, technical assistance mightmake a positive contribution, if it were tobe provided on request to build thecapacities of governments and otherconstituencies of the poor to achieverights commitments and engage in policydialogue on rights obligations. On theother hand, the Philippines has arelatively high level of human andtechnical resources making itunnecessary to have to source technicalassistance from donor countries.

Increase direct support for civil societyorganizations as important partners inpoverty reduction programs, as well asinstruments for putting in place “socialaccountability mechanisms” to monitorgovernment action as well as in leadingsignificant anti-corruption campaigns.

Ending poverty is inherently a politicalprocess specific to local economic, social,cultural, ecological and gender equalitycircumstances in each country. As thework of Amartya Sen demonstrates,people-centered development for povertyeradication is ultimately about recognizingthe rights of the vulnerable, andtransforming the power relations, andcultural and social interests that sustaininequality. Development is therefore apolitical process that engages people,particularly the poor and the powerless, in

negotiating with each other, with theirgovernments, and with the worldcommunity for policies and rights thatadvance their livelihood and secure theirfuture in their world.

The poor are not the subjects to be actedupon by development action, but rather arecentral actors in sometimes conflictualpolitics seeking pro-poor developmentstrategies. Consequently, finding avenuesto address unequal power, capacity, andaccess to resources for the poor and themarginalized is a fundamental challenge todevelopment actors wanting to link povertyreduction to democratic governance andparticipation. The rights framework is adynamic one that continues to evolvethrough intense national and multilateralpolitical processes. It has been the resultof many decades of struggles by peoples’oganizations – women’s movement,indigenous nations, gay and lesbiannetworks, workers and labourorganizations, fishers and farmersorganizations, human rights defenders.Human rights are essentially active andshould not merely be ‘promoted’ or‘protected’, but are to be practiced andexperienced. They have implications forthe actions of all donors, governments, andnon-state actors in development.

In the words of John Foster, “participation iscentral to a human rights approach todevelopment as a right, an entitlementguaranteed by international law, rather thanan optional extra or tool for the delivery ofaid”. Nevertheless the challenge for


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Sources and References:

1. Rivers Watch East and Southeast Asia, IRN, andFriends of the Earth Japan, DevelopmentDisasters, Japanese Funded Projects in Asia,March 2003.

2. “International Fact Finding Report on the Effectsof Japan ODA-Funded Projects in Cebu andBohol”, June 5-10, 2003.

3. Reality of Aid 2004 Report, Governance andHuman Rights in Development Assistance,IBON Books, Manila, 2004.

development practitioners, civil society andofficial aid agencies alike, is to make thelanguage and analysis of rights accessibleto citizens and organizations working toovercome the conditions of poverty fromcommunity to national levels.5

In the light of the 50th anniversary of JapanODA, the most important challenge is toadopt the rights based approach todevelopment, shifting the focus ofassistance to empowerment, social andeconomic development and basic services.

4. IBON Special Release, “Cancel MarcosDebts to Help Tame the Financial Crisis”,September 2004.

5. Institute of Political Economy Primer, “DebtCrisis, Budget Crisis”, August 2004.

Endnotes

1 http://www.ph.emb-japan.go.jp/oda/sectoral.htm

2 Sogge, D., Give and Take: What’s the Matter withForeign Aid? Reading, UK: Z Books, 2002

3 LDC III final recommendation, para 84 (e) quoted inActionaid, “ ODA and Aid Effectiveness in FfD” ,July 2001.

4 Russell Mokhiber and Robert Weissman, “OtherThings You Might Do with $87 billion”, Focus onthe Corporation, September 10, 2003, http://lists.essential.org/pipermail/corp-focus/2003/000160.html.

5 John Foster (North South Institute, Canada),“Crisis time: Repossessing Democratic Space,Governance and the Promotion of Rights inInternational Cooperation and Aid, A DiscussionPaper for The Reality of Aid”, April 2003,accessed from the Reality of Aidwebsite,www.realityofaid.org., p. 8.


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US$ Million In percent

Year Japan DAC DAC minus Year Japan DACJapan

1960 27.85 50.93 23.08 1960 55% 45%1961 8.54 19.06 10.52 1961 45% 55%1962 7.02 30.34 23.32 1962 23% 77%1963 10.75 21.61 10.86 1963 50% 50%1964 21.35 72.34 50.99 1964 30% 70%1965 35.3 90.87 55.57 1965 39% 61%1966 30.5 42.41 11.91 1966 72% 28%1967 61.54 83.35 21.81 1967 74% 26%1968 27.76 62.15 34.39 1968 45% 55%1969 49.21 76.03 26.82 1969 65% 35%1970 19.23 41.3 22.07 1970 47% 53%1971 29.63 63.66 34.03 1971 47% 53%1972 103.49 156.66 53.17 1972 66% 34%1973 141.58 213.67 72.09 1973 66% 34%1974 73.32 132.93 59.61 1974 55% 45%1975 70.33 160.06 89.73 1975 44% 56%1976 75.54 161.01 85.47 1976 47% 53%1977 30.61 143.94 113.33 1977 21% 79%1978 66.47 164.66 98.19 1978 40% 60%1979 89.16 170.44 81.28 1979 52% 48%1980 94.4 205.44 111.04 1980 46% 54%1981 210.05 330.98 120.93 1981 63% 37%1982 136.38 276.35 139.97 1982 49% 51%1983 147.02 358.5 211.48 1983 41% 59%1984 160.07 355.78 195.71 1984 45% 55%1985 240 437.55 197.55 1985 55% 45%1986 437.95 886.82 448.87 1986 49% 51%1987 379.38 703.14 323.76 1987 54% 46%1988 534.72 790.1 255.38 1988 68% 32%1989 403.75 757.69 353.94 1989 53% 47%1990 647.45 1102.1 454.65 1990 59% 41%1991 458.92 857.17 398.25 1991 54% 46%1992 1030.67 1535.55 504.88 1992 67% 33%1993 758.39 1327.16 568.77 1993 57% 43%1994 591.6 939.62 348.02 1994 63% 37%1995 416.13 764.5 348.37 1995 54% 46%1996 414.45 749.34 334.89 1996 55% 45%1997 318.99 560.68 241.69 1997 57% 43%1998 297.55 513.29 215.74 1998 58% 42%1999 412.98 609.71 196.73 1999 68% 32%2000 304.48 502.08 197.6 2000 61% 39%2001 298.22 501.78 203.56 2001 59% 41%2002 318.02 509.14 191.12 2002 62% 38%

9990.75 17531.89 7541.14

AnnexTable 1. Net Disbursement of ODA for Philippines from Japan and DAC countries

1960-2003


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Table 2. Japan total ODA to Philippines, By type, 1960-2002Year Loan Grant Total1960 0 27.85 27.851961 0 8.54 8.541962 0 7.02 7.021963 0 10.75 10.751964 0 21.35 21.351965 0 35.3 35.31966 0 30.5 30.51967 0 61.54 61.541968 0 27.76 27.761969 13.28 35.93 49.211970 3.49 15.74 19.231971 5.33 24.3 29.631972 65.24 38.25 103.491973 71.2 70.38 141.581974 40.3 33.02 73.321975 34.08 36.25 70.331976 48.92 26.62 75.541977 16.83 13.78 30.611978 41.28 25.19 66.471979 57.25 31.91 89.161980 58.69 35.71 94.41981 165.08 44.97 210.051982 91.29 45.09 136.381983 85.05 61.97 147.021984 102.39 57.68 160.071985 170.29 69.71 2401986 357.58 80.37 437.951987 267.59 111.79 379.381988 403.62 131.1 534.721989 227.69 176.06 403.751990 494.31 153.14 647.451991 285.3 173.62 458.921992 845.01 185.66 1030.671993 512.97 245.42 758.391994 342.78 248.82 591.61995 180.62 235.51 416.131996 228.96 185.49 414.451997 161.52 157.47 318.991998 138.54 159.01 297.551999 238.68 174.3 412.982000 147.39 157.09 304.482001 146.77 151.45 298.222002 181.13 136.89 318.02

6230.45 3529.69

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The Reality of Aid Asia-Pacific 2005Sri Lanka

Prior to start sharing our experience withJapan Overseas Development Assistance(ODA) programme in Sri Lanka, I wish tosay a couple of things pertaining to thegenesis of the organization I represent. Infact, Sewa Lanka came into existence in1992 with an agenda of promotingsustainable development by adoptingparticipatory development approaches.Subsequently, it was registered under theCompanies Act of the Government ofSocialist Republic of Sri Lanka in February1993.

In view of the massive displacements in thenorth-east & boarder districts, increasingloss of human lives, sufferings of theinternally displaced families includinginfants & children, growing suspicionamong multi-ethnic communities, our Boardof Directors decided to serve the poor/poorest in the south and also the familiesdirectly affected by the protracted war.

In fact, my organization made this decisionduring the time when there was no nationalNGOs to serve Internally Displaced

Aid in Situation of Conflict in Sri Lanka

by: Harsha Kumara Navaratne

Families in the north-east including theareas controlled by the Liberation Tigers ofTamil Eelam (LTTE) and also the 04districts adjoining to the north-east. I amvery happy to say that we received a verypositive response from the Government ofthe Federal Republic of Germany & theUnited Nations High Commissioner forRefugees to provide humanitarianassistance to the IDP families in the North-East. Though it was too risky (possibility ofgetting caught into cross fire, landminesand aerial bombing, etc.) to work in theLTTE controlled areas, a large number ofour staff served such areas over the pastyears. I have always been grateful both tothe Sri Lankan Security Forces and theLTTE as they recognized Sewa Lanka asneutral which has really provided our staffwith courage to serve the affected familiesfaster than any other organizations(government and international NGOs). Priorto the signing of the cease fire agreementbetween the Government of Sri Lanka andthe LTTE, Sewa Lanka was the onlynational NGO accepted by the above

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The Reality of Aid Asia-Pacific 2005 Sri Lanka

parties to work in the LTTE controlled areasin Vanni as Sewa Lanka has been verytransparent in the way it works,demonstrated good accountability,maintained very good working relationshipswith all concerned stakeholders,professional approach, multi-ethnic staffcadres and so on.

From our perspective relief, rehabilitationand development are strongly relatedaspects. We have therefore alwaysadvocated that all organizations should tryto the extent possible to promote theprinciples of “Participatory Development” inall stages (relief, rehabilitation &development). For Example, during reliefstage we have organized people and giventhem the tasks of unloading food items andthe responsibilities relating to thedistribution of food, keeping welfare centreenvironment clean, etc. I am sure, youwould agree with me that people becomefully relief oriented/dependent if they arerequired to stay at welfare centres for anunexpectedly longer period. It also entails avery difficult and time-consuming processto re-orient their attitudes/behavioursrequired to bring them back into the long-term development process during thetransition period and/or post conflictsituation. Since planning & implementationof long-term development programmesrequires stable security situation &stabilized communities, we haveimplemented, over the past years, aconsiderable numbers of humanitarianassistance & rehabilitation projects in the

LTTE controlled areas in the districts ofMullaitivu, Kilinochchi, Mannar, Vavuniya &Trincomalee while long-term developmentprogrammes have been carried out in thegovernment controlled areas of Vavuniya,Trincomalee, Ampara and southerndistricts.

Though the situation in the north-east stillremains fragile, we have also undertaken acouple of small & medium size initiativeswith assistance from the European Union/German Agro Action, Danish RefugeeCouncil, the World Bank, NECORD of theADB, Embassy of Japan, UNDP, Terres desHomes, OXFAM (UK), Helvetas and so onto assist some of the affected families inthe north-east since mid 2002.

Frankly speaking, our main strength hasbeen the multi-ethnic/multi-lingual stafftrained in participatory developmentmethodologies, conflict resolution/Do NoHarm and so on. These staff members arealso guided by a multi-disciplinary team ofexperts drawn from the Universities ofJaffna, Peradeniya, Batticaloa, Colombo &Kelaniya. During this period we have beenable to gain trust of the governmentagencies, bi- & multi-lateral donoragencies, provincial councils, the LTTE,national & international NGOs, communitybased organizations, which we consider asthe most important success factor of ouractivities.

Today, Sewa Lanka Foundation hasbecome one of the largest NGOs in Sri

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Lanka and the following are our mainsectors of intervention:

Socio-economic Studies, SocialResearch & Community Empowerment,

Agriculture & Aquatic ResourceDevelopment,

Women Empowerment/Gender &Development,

Peace Promotion involving civil societyorganisations,

Environmental/Wild Life Conservation,

Enterprise Promotion & Micro-Finance.

Since most of our district offices aremanned with professionals, adequatelytrained & highly experienced staff (nearly360) and also equipped with adequate ITfacilities & other logistics, Sewa Lankanational headquarters has brought asignificant shift into its planning & projectmanagement approaches by decentralizingplanning & project managementresponsibilities to the respective districtoffices since 1989. These districts havealso been given liberty to negotiate projectswith donor agencies represented at the fieldlevel. The national headquarters now playsa coordination/liaison role with some of themajor multi- & bi-lateral donor agenciesincluding the Embassy of Japan inColombo, national level stakeholders andso on. The national level team of expertsprovide their specific services at the requestof the respective districts.

Sri Lanka:

I am sure, most of you are well aware thatSri Lanka is a middle-income country,where 45.5% of the population have a percapita consumption of less than $2/day(World Development Report 2002), yet lifeexpectancy at birth (73 yrs) is almost ashigh as the average for high incomecountries, under 5 mortality is half theaverage for middle income countries andadult literacy is lower than the average forEast Asia or Latin America. The mainreason as to why Sri Lanka has been ableto achieve the above is that it was one ofthe first developing nations to understandthe importance of investing in humanresources and promoting gender equality.As a result, it has achieved health &education outcomes more consistent withthose of high income countries. In 1977, SriLanka began the transformation from aninward-looking socialist system towards amarket economy based on liberalizedtrade, foreign exchange and investmentarrangements which helped the country toincrease its GDP from 4 to 6% per year.However, our country experienced anegative growth in 2001 which was due tothe global economic recession, drought,political instability, slowed down economicreform, drastically reduced number oftourist arrival and so on. However, itgradually recovered and the present growthrate is more than 5% per annum.

Even though Sri Lanka has madesignificant advances over the past several

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decades in regard to quality of life, efforts toreduce ‘poverty’ have recorded less thansatisfactory results due to the government’sinability to dedicate its resources, energy &time in the socio-economic development ofthe country as it had to incur massiveexpenditures for the war. The Northeast warduring the period from 1983 to 2002 has notonly affected the north-east, it has badlyaffected the whole country as it has sloweddown the socio-economic growth of thecountry. This conflict is also responsible forthe chronic budgetary deficit of the country.As a Sri Lankan, I strongly feel that SriLanka would have achieved a strongereconomy if the country was not subjectedto the armed conflict over the past years.

The conflict in the north-east compellednearly 800,000 people to leave their nativeplaces and take refuge within/outside thecountry. It has also caused severeharassment of civilians & injuries to thepeople; damaged/destroyed physical,economic and social infrastructures;severely affected livelihoods of people andsocial networks; produced traumatizedchildren & women, etc. As far as the officialsources are concerned, this war hasclaimed nearly 60,000/70,000 human (men,women, children and infants) lives. Theeconomy of the north-east was paralyzeddue to the economic embargo, restrictionson civilians’ movements to/from the LTTEcontrolled areas, transportation of essentialitems, etc. imposed by the government.However, the actual social & economiccosts of the war are yet to be determined.

Since the whole country was subjected tosevere hardships for a longer period, SriLanka missed significant social &economic development opportunities.

The Cease fire agreement signed betweenthe Government & the LTTE in February2002 brought a hope of relief to the civilsociety throughout the country especially inthe north-east. Subsequently, a total of47% of the total of 730,000 (UNHCRReport) displaced people have returned totheir homes hoping that in addition to theestablishment of a peaceful politicalenvironment, the government would providethem with opportunities to reduce most ofthe pressing needs pertaining to theirlivelihoods, etc. Unfortunately, thoseexpectations proved overly optimistic as theinitiative to start political dialogue has cometo a standstill situation which has alreadystarted making the ground situation morefragile. On the other hand, most of thereturned families continue to experienceextreme difficulties as no systematicsupport schemes has been planned forsuch families by the authorities. There arestill many areas where immediateresettlement is not possible as almosteverything has been destroyed due to directconfrontations between the warring parties.There are also areas termed either by theSecurity Forces or the LTTE as “HIGHSECURITY ZONES”. Since most of therural families have returned after a longtime, their native places have becomeinhabitable – area full of jungles, nodwellings, unavailability of safe drinking

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water & sanitation facilities. Immediatecultivation is also not possible as thepreparation of their farm lands requiresubstantial financial investment on theirpart for clearing dense jungles, preparinglands, purchasing agricultural tools &agricultural inputs; capital to restart non-farm activities and so on. The abovesituation has started creating unhappinessamong the returnee families as it has beenextremely difficult for them to restart theirlivelihoods. Further, they also do notforesee any possibilities of gettingimmediate assistance from any sources.As a result, some returnee families haveindicated that “We were better in welfarecentres as we had, at least, shelters andaccess to dray rations”. Some also saythat “the ceasefire gave us the opportunityto use the A9 road without fear and also toreceive a considerable numbers of (local &international) officials coming to interviewus”.

In view of the above, I would like to statethat perhaps most of the balance 55% ofthe displaced persons would not beprepared for immediate return as they maybe afraid of being subjected to the samesituation like the others. Further, very littlethought has been given to 92,062 peoplewho are still in welfare camps situatedwithin the country and 140,000 people stillremain in South India (UNHCR Report).Therefore, there is a greater need for all ofus to be serious about the issues relatingto the displaced families as smoothresettlement no doubt requires greater

efforts & investments to ensure that theground situations in return areas areconducive in terms of their safety andadequate support are required for them torestart earn a living, send their children toschools, access to health facilities.

Despite the present government’s genuineintention & strong efforts to start thepolitical negotiations with the LTTE, it hasnot commenced as yet due to someunavoidable circumstances. However, thereare signs that both parties are taking somepositive initiatives to commence it soonest.We therefore strongly feel that there is agreater need for the internationalcommunity including the Government ofJapan to assist the affected families torestore their livelihoods while efforts arebeing made at the macro level to bring thetwo parties into the negotiation table.

Helping these families to stabilize in theirplaces of origin would no doubt encouragethe balance families to return on their own.From our previous experience, we knowthat the people of Japan are very generousand the Government of Japan has beenhelpful to our nation. The reason behind ourrequest is that a great majority of thepeople affected by the conflict may startlosing hope in the present “Stage ofTransition” as they are still experiencinghardships even though they have returnedto their native places. It is sad to say thatthough the ceasefire has been effective fornearly two & half years, there are areaswhere people have not received productive

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assistance from any sources. Theirexpectations to restore houses, safedrinking water & sanitation facilities,sending their children again to schools, etc.have not materialized as yet.

We are aware of the fact that Japan’sofficial development assistance is governedby the ODA Charter adopted by thegovernment in 1992. This Charter declaredthe following guiding principles for ODA:

The pursuit of environmental conservationand development,

Avoidance of the use of assistance formilitary purposes or for aggravation of theinternational conflict.

Monitoring of the recipient countries’military expenditures, their production ofweapons of mass destruction;

Monitoring of their efforts for promotingdemocratization, market orientedeconomy and their human rightssituation.

In addition to the above, very recent policyguidelines for ODA includes support forpoverty alleviation, social development,economic and social infrastructures, humanresource development and responding todebt relief and global issues. The globalissues include environment, population,AIDS, food, energy and drug abuse.

It is interesting to note that a substantialportion of the Japanese aid has gone to theAsian countries. Data for 1999 reveals that63% of Japanese bilateral assistance went

to Asia, 9.05% to Africa, 7.8% to SouthAmerica and 5.02% to the Middle East.Another feature of Japanese loan is that itis soft loan with low interest rate & longrepayment period. In 2004, the GOJannounced that the interest rate would be1.5% per year and repayment period wouldbe 30 years, including a grace period of 10years. Since Japan has recently declaredthat interest rate would be 0.75% if theparticular project is directed towardsaddressing environment issues, humanresource development & peace building.

In fact, Sri Lanka has traditionally been afriend & strong supporter of Japan due tohistorical reasons. There is a also aconsensus in Sri Lanka that the Japaneseeconomic cooperation programme hasmade a productive contribution towards SriLanka’s achieving strong social indicatorsthrough projects for improving economicinfrastructures, human resourcesdevelopment and technical cooperation.

Though we have not been engaged in theplanning & implementation of large scaleprojects over the past years, we are happyto note that the Japanese missions visitedSri Lanka during the course of 2002-2004have increasingly encouraged thegovernment counterparts to involve the non-governmental organizations in the planningand implementation of such projects. Wehad also the opportunity to accompany anumber of Japanese missions to variousproject locations situated in the north-eastand organizing meetings with variousstakeholders in the north-east. In fact,

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Project Title Year Beneficiary Approved/ StatusFamily Expected

Funds

Rural Livelihood 2000-2001 878 70,898 CompletedDevelopment Project.

Revitalizing Rural 2002-2003 407 55,939 CompletedEconomy by UsingLocally AvailableResources inTrincomalee

Project for Livelihood 2004-2005 850 74,147 BeingEnhancement of Poor ImplementedFamilies in Batticaloa.

Restoration of Basic 2004-2004 5,000 72,745 BeingFacilities affected by ImplementedFlood & Landslides inMatara District.

Emergency 2004-2005 422 225,698 BeingRehabilitation for families ImplementedReturnee Communitiesin the Vanni & the East.Japanese CounterpartFund project throughthe Dept. of ExternalResources & Ministryof RRR.

Employment Creation 2004-2005 1,500 Approx. Hardfor Youth through Skills unemployed 33,0240 PipelineDevelopment Training youth

Foreign Grants Assistance Received (RS.)

2000 2001 2002Total Grant 5145 5500 7079Contribution 2826 2135 2287of Japan(Source: Central Bank, Socio-Economic Data2003)

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required to address their needs relating torural development, livelihood enhancement,de-mining, environment conservation, peacebuilding, promotion of agriculture and so on.During the past three years (2001-2003),the Japanese government has contributedabout $ 3 million to 35 projects in SriLanka. Sewa Lanka Foundation has beenprovided with the following projects:

I also wish to take this opportunity to sharewith you some of the positive aspects ofthe following project supported by JapaneseGrassroots Human Security Project fund:

Project Title: Revitalization of RuralEconomy Using Locally AvailableResources in Trincomalee.Location: 03 DS Divisions in Trincomalee

Like other districts in the north-east, thedistrict of Trincomalee has also beendirectly affected by the recently pausedarmed conflicts. This district is situated in avery strategic location as it is nearly in themiddle of the north-east. The uniqueness ofthis district is that it comprises equalproportions (33%) of families belonging tothree major ethnic groups (Tamils,Sinhalese and Muslims). Unfortunately, theabove conflict compelled a large number offamilies to take refuge within and outsidethe district. As a result, irrigation tanks,roads, drinking water facilities, etc. havebeen damaged due to lack of regularmaintenance. Since rural economy largelydepends on irrigation based agriculture,farmers returned to their native villagesexperienced difficulties to earn income

various missions had carried out thoroughconsultative process including participatorydevelopment methodologies to ensuregetting voices of the poor/poorest andstakeholders at various level during theirproject formulation missions. Since theimplementation rates of some of the on-going foreign funded projects have beenvery slow, they have also doneassessments to ascertain institutionalcapacities of the government departmentsand NGOs, and proposed appropriateimplementation mechanisms to ensure thecompletion of projects in time. The tworecent hard pipeline initiatives are asfollows:

Pro Poor Economic & CommunityEnhancement Project Phase I,

Pro Poor Economic & CommunityEnhancement Project Phase II

The Central Bank Reports 2003 reconfirmsthe fact that the Government of Japan is thelargest development partner of theGovernment of the Socialist Republic of SriLanka:

Apart from the above, another category ofJapanese assistance to Sri Lanka is GrantAssistance for Grass Root HumanSecurity Projects (GGP), which placesconsiderable importance on reconstruction,rehabilitation and socio-economicdevelopment of the disadvantagedpopulation. The fund provides the NGOsand grassroots level organizations withopportunities to apply for resources

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required for their survival. Since the projectlocations were not served by other NGOs/donor agencies, Sewa Lanka staff inconsultation with the Government staff(Divisional Secretariat, departments ofAgrarian Development & Agriculture)organized participatory needs assessmentexercises in October 2001. The list ofprioritized needs prepared by the villagershighlighted the immediate need torehabilitate the minor tanks to enable thesmall farmers to cultivate their paddy lands.The proposal to assist the farmers wasapproved by the Embassy of Japan on 15March 2002.

This project was planning & implementedby the Farmers’ Organizations. Therehabilitation works done have enabled atotal of 407 resettled farmer families torestart their agricultural cultivation in bothYala and Maha seasons. They have alsobrought 150 additional acres of paddy landsunder cultivation. The Farmer Organizationshave also prepared Operational andMaintenance plans with assistance fromthe Department of Agrarian Services.

Project Title: Rural DevelopmentProject Location: 03 DS divisionsin Trincomalee

In early 1999, a considerable number offamilies have returned to their own villagesin the DS divisions of Morawewa,Thambalagama and Kinniya. However,these villages became jungles, villagerswere afraid to allow their small children tomove. Some of the locations were not

easily accessible. In case of sicknessthere was no way to call in an ambulace ortransport patients in vehicles. Incidents ofwater borne diseases were prevalent. At therequest of the Government Agent &Divisional Secretaries, Sewa Lanka staffbased at Trincomalee district office carriedout needs assessment exercises in June1999 when villagers identified access roadsand drinking water as their priorityproblems. The proposal was approved bythe Embassy of Japan approved the projecton 21 February 2000. Under this project,we have assisted villagers belonging to themixed communities (Sinhalese, Tamils &Muslims) to re-active their village societies,plan & implement project activities. Underthis project, a total of 17 km of rural gravelsroads were restored and 17 drinking waterwells were constructed. The villagesocieties also established “Water Users’Groups” who are responsible formaintaining these wells. The villagessocieties with help from the DivisionalSecretariats & Mosque/Temple /KovilCommittees are responsible for ensuringmaintenance of the roads rehabilitatedunder this project. This project also hasstrengthened the social ties among multi-ethnic beneficiary families, provided thebeneficiary families with easy access tosafe drinking water, reduced incidents ofwater borne diseases. Increased vehicularmovement within the project villagesenabling villagers to sell their produceswithout difficulty. The beneficiaries includingchildren also obtained easy access to theschools, market places & nearby cities.

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Conclusion:

Nearly 31 months have passed since the“Cease fire” agreement was signed.However, nothing has happened and/or ishappening on the ground and thereforefamilies affected by the protracted war inour country continues to experienceextreme difficulties to re-establishingnormalcy in their lives. Though a largenumber of the displaced families have beenallowed to return to their native places,barricades on roads/security check pointshave been removed, people have beenallowed to travel along A9 road, economicembargo has been withdrawn, physicalharassments have been stopped,restrictions on the transportation ofessential items is no longer effective aftersigning of the above agreement, the waraffected families still continues to strugglefor their survival. Further, there are also stilla considerable number of families living atwelfare centres and/or with friends/relativesas these families are unable to return totheir villages due to security reasons(landmines/villages situated close tomilitarily strategic locations). Since neitherthe government nor the LTTE has been ableto support the affected and returningpopulation to recover from the social &economic shocks as yet, there is apotential threat that these people mayloose their confidence & trust on the“Ceasefire Agreement” and the “PeaceProcess”. There are also signs that peopleboth in the northern & southern parts of thecountry have started getting worried and

afraid of the present situation. Since thepresent government has not been able tore-start the political negotiation due tosome unavoidable reasons, there are alsoevidences that a couple of extremist groupshave started making efforts to make use ofthis opportunity to sabotage the revivingsocial fabrics and the hopes for re-establishing peace in the country.

The present state of affairs in Sri Lanka isthat every single thing seems to be left tothe government and the LTTE while thisshould be a joint task of the government,the LTTE, international developmentpartners, international & national privatesector entities, non-governmentorganizations, civil societies and so on. I,on behalf of Sewa Lanka Foundation, wishto request the Japanese Tax Payers,Japanese NGOs and the Government ofJapan to consider initiating programmesthat would allow Japanese NGOs worktogether with National NGOs in Sri Lankato Promote Sustainable Peace andDevelopment through active involvement ofcivil societies. Such programmes should bedesigned to directly engage civil societiesas they are the actual victims of theconflict- who have lost breadwinners and/orrelations, who have lost permanent assets& livelihoods, who have been subjected tohardships, harassments and so on.Therefore, there is a greater need for all ofus to enable the civil societies to enhancetheir knowledge-base on their roles innegotiated settlement, accept the reality ofwar, re-invigorate their livelihoods, re-establish social linkages, and empowering

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them to play a proactive role during thetransition & post reconstruction periods ofthe country.

We all are living in a unique planet whereeverything is inter-connected & inter-dependant. We believe that AID plays apivotal role to help countries affected bytemporary setbacks /unexpected situationto overcome such situation, strengthennational capacity & become self-reliant.Our country is presently experiencingmassive challenges while the countryeconomy is not strong enough to meet thechallenges, Sri Lanka would thereforerequire development assistance from itsinternational partners. Since large scaledevelopment assistance does notimmediately reach the civil society, I wouldrequest attentions of all stakeholders onthe following:

Consideration of developmentinterventions at micro (civil society) levelwhile waiting for the restoration of peaceat macro level as sustainable peacewould certainly require simultaneousinterventions both at micro (civil society)and macro levels.

Establishing close links between the SriLankan NGOs & the Japanese NGOs fordeveloping joint programmes aiming atempowering civil societies that wouldensure local capacity building &sustainability.

Promoting productive linkages betweenthe private sector & corporate sectoragencies in Sri Lanka & Japan.

Encourage establishing linkages betweenthe Sri Lankan Civil Societies with theCivil Societies here in Japan.

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