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Interview with Sadako Ogata, President, Japan International Cooperation Agency, on a new approach to aiding developing countries.
 What factors are currently limiting how effective Japan can be in aiding developing countries?
The number one limiting factor is the economy because Japan has gone through a very long period of recession and during that period Japan’s overseas development assistance has been cut down every year because the government was in need of balancing the budget. Therefore, I would say that the economic factor is the main reason for Japan’s overseas assistance being restricted.
Now that the business environment is improving and that employment is rising, I am hopeful that there will be a more positive approach, financially speaking, to aiding developing countries.
Should development banks and aid ministries be focusing on encouraging private investment in developing countries, rather than issuing direct loans and grants?
| I think this is a question of combining the two. The development banks, especially the export banks, have tended to support the industries or businesses from their own countries with their investments in developing countries. The aid ministries, however, have extended technical and financial assistance directly to the developing countries. So there are two kinds of activities that have been undertaken and I would say that they both have different purposes. I think that we need to focus much more on the needs of developing countries themselves and provide a variety of technical and financial assistance in order to make the developing countries more capable of absorbing help from abroad. |  |
"The number one limiting factor is the economy because Japan has gone through a very long period of recession and during that period Japan’s overseas development assistance has been cut down every year."
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What do you think should be on the agenda for the World Economic Forum on East Asia?
There are several levels of discussion that I have noted, if you include the three major economic powers in East Asia; India, China and Japan, I think that they would inevitably be the major proponents of whatever happens to the economic conditions in this whole region.
The second point is the question of East Asian community development. There are many forums discussing collaboration within the region but the institutional aspects of this are still very weak. Economic meetings so far have not come to the point of any formal or even informal institutional development. I think that should be examined very carefully.
Why is there no East Asian economic community that you can really pinpoint? I think it’s because of the political situation in this region, which has not reached the point of institutional arrangement. The cold war lingers on longer in Asia and there are security problems over the Korean peninsula and the Taiwan straits. These issues should be at the top of the agenda.
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