Official Development Assistance and Middle-Income Trap in the Philippines: effects, challenges, and strategies

Introduction Japan was the largest Official Development Assistance (ODA) donor in the world throughout the 1990s. From the beginning of Japan’s engagement in 1954,2 foreign policy makers, especially those affiliated with the Ministry of Foreign Affairs (MOFA), constantly endeavoured to underline the importance of Japan’s ODA as an indispensable humanitarian instrument for alleviating global poverty and human suffering. Japan’s efforts, mostly in the form of loans, clearly had a positive impact on the economies of developing countries, especially those in Asia. However, it is undeniable that Japan used its ODA in the pursuit of its own interests. As a country that had abandoned any aspiration to become a military power, Japan had to rely on ODA as a primary tool of its foreign policy. In the post-1945 era, ODA was used to rebuild relations with neighbouring countries in Asia that distrusted Japan on account of its previous imperialist conduct. Used as a form of reparation,3 it paved the way to resources and markets in Southeast Asia. According to David Arase, ODA played a central role in advancing Japan’s economic power. It helped establish a wide production and trade network in Asia, relativizing the country’s comparative disadvantages, most notably its lack of natural resources and high labour costs (Arase 1995, pp. 142-146). Japan’s ODA mirrored the basic policy of unarmed neutrality set by Prime Minister Shigeru Yoshida, which later became known as the Yoshida Doctrine. Following this doctrine, Japan focused mainly on promoting its economic growth, while leaving military defence to the United States. To use the analogy of a former deputy minister at the Ministry of International Trade and Industry (MITI),4 Naohiro Amaya (1979-1981), Japan was to exercise its power as a merchant nation, leaving power politics to samurai nations such as the USA or the Soviet Union (Amaya 1980). Although the country had the economic potential to become a samurai nation, it refrained from participating in “power games”, thus earning the reputation of being a pacifist country or civilian power (Maull 1990). Against this backdrop, Japan used its ODA largely to enhance its national economic growth by supporting the economic advancement of neighbouring countries through the development of economic infrastructure such as roads,bridges, dams, railways, port facilities and power plants. This was necessary to gain access to the valuable natural resources Japan was lacking. Eventually, these projects promoted the free movement of goods and capital, allowing Japan to implement an economic strategy – best described as the Flying-Geese Model – that was strongly influenced by the Japanese economist Kaname Akamatsu, according to which the promotion of economic development in Asia would eventually lead to positive economic synergies (Akamatsu 1962). Because Japan was mainly pursuing economic interests, it was reluctant to attach political conditions linked to human rights or good governance to its ODA. This stood in sharp contrast to other donors, such as the USA.5 Just like the country’s foreign policy in general, Japan’s ODA was characterized by its passive and low-profile stance.6 This explains why Japan’s position as a globally leading ODA donor was barely noticed internationally. The lack of field expertise as well as the long-lived request-based system demonstrated Japan’s reluctance to become involved in the internal affairs of other countries.7 In fact, until the 1990s Japan did not use its ODA as an instrument of political sanction, either positive or negative (Nikitina and Furuoka 2008). This neutral political stance was a way for Japan to maintain its autonomy and independence to the greatest extent possible in order to benefit from economic relations with countries beyond the ideological fringes of the international stage.8 A general ODA strategy was not formulated until 1992, when Japan published its first ODA Charter – four decades after the country became active as a donor. This long-delayed announcement of an official ODA policy indicates that there was domestic resistance to the creation of general rules that may have limited the use of ODA as an economic tool (Arase 1995, p. 166). On 13 December 2013, Japan signed an ODA loan agreement amounting to 18.7 billion yen with the Republic of the Philippines to provide ten new patrol vessels. On 1 August the following year, Japan signed a non-project grant agreement with Vietnam for the provision of six refurbished vessels worth 500 million yen (MOFA 2015c). The provision of these boats was part of Prime Minister Shinzō Abe’s new political doctrine, announced in Jakarta in January 2013.9 One of its key principles is to protect the “open, free, and peaceful” seas from the “rule of might”. To a large extent this doctrine was addressing China’s growing assertiveness in the region. Consequently, for the sake of “free and peaceful” seas, trilateral cooperation among the Association of South East Asian Nations (ASEAN) countries, the USA and Japan needed to be strengthened (Kantei 2013b). This utilization of ODA for security purposes is not a completely new feature. In a wider sense ODA has long been an indispensable tool in ensuring national security, especially after the oil crisis in the 1970s, when Japan included its ODA in the “comprehensive security” strategy outlined by a task force appointed by Prime Minister Masayoshi Ohira (1978-1980). This group came to understand that the destabilization of certain areas in the world could affect Japan’s complex resource and trading network. As a result, Japan diversified its aid to include strategically important countries, such as China, Egypt, Jamaica, Kenya,Somalia, South Korea, Sudan, Tanzania and Zimbabwe (Akaha 1991, pp. 332-333). However, the case of capacity building measures that included the provision of patrol boats stood in clear contrast with previous ODA efforts that were strictly limited to non-military areas. The provision of patrol vessels to the Philippines and Vietnam has a military dimension, even if the official statements declare differently. They are defined as “military vessels” under the Export Control Trade Ordinance definition of the Ministry of Economy, Trade and Industry (METI) (METI 2005). The government argues that coastguards are part of law enforcement agencies under civilian jurisdiction, making the support a non-military contribution. At least in the case of Vietnam this argument is debatable, however, since the coastguard in Vietnam comes under the control of the country’s Ministry of National Defence (Global Security 2015). In whatever way the use of ODA to provide patrol boats may be defined from a legalistic standpoint, it is obvious that it represents a new balancing strategy against China, which is becoming increasingly assertive in its territorial claims in the region. By means of patrol boat provision and coastguard training, Japan is supporting the US pivot towards the Asia-Pacific region. The relevance of Japan’s ODA in the new regional security strategy was emphasized in the Japanese-US 2 + 2 Joint Statement of October 2013, which set out the future plans of both countries:The Ministers welcomed the strategic use of Official Development Assistance by Japan, such as providing coastal patrol vessels and training for maritime safety to regional partners, and recognized the importance of such endeavors in promoting regional peace and stability.

Purpose This explorative study aims to compare and analyze the behavior of a traditional and an emerging donor, namely, Germany and South Korea, in the field of climate change-related official development assistance (ODA). It analyzes their ODA projects in 2013 in four Southeast Asian countries severely affected by climate change, namely, Cambodia, Laos, Myanmar and Vietnam. It also adapts the existing framework to categorize ODA allocation according to receiving countries’ need and merit and donors’ self-interest. Design/methodology/approach The paper first describes both countries’ policies and activities. It then uses a country’s vulnerability to climate change as a measure of its need, its climate change readiness as a measure of its merit and its bilateral trade volume in environmental goods with donor countries as a measure of donors’ self-interest to analyze the allocation of climate-related ODA. Findings Results suggest that Korean ODA in the field of climate protection is driven more by receiving countries’ need and merit, but self-interest seems to be important for both donors. In addition, many projects labeled as adaptation or mitigation projects only have a weak link to these goals. There are limitations to the present paper. First, it could only analyze projects in 2013 because there are no earlier project data available in the Organization for Economic Cooperation and Development’s Creditor Reporting System. Second, because of the simplifying assumptions of the need–merit–self-interest framework, possible other determinants of aid allocation were deliberately ignored. Finally, this explorative study is restricted to four vulnerable countries in Southeast Asia. Originality/value To the best of the authors’ knowledge, this is the first paper to compare a traditional and an emerging donor’s behavior and to explore the allocation of climate-related ODA using the need–merit–self-interest framework.

Japan’s Foreign Aid: Old Continuities and New Directions, edited by David Arase. New York: Routledge, 2005, 336 pp., $132.00 (hardcover ISBN 0415359996) Japan’s Foreign Aid: Old Continuities and New Directions provides a detailed account and comprehensive analysis of Japan’s Official Development Assistance (ODA) through the comparative perspective of other donor countries (the UK, Sweden, Australia, the US, Canada, and Korea and the World Bank) as well as recipient countries (Pakistan, China, South and Southeast Asia, the Pacific region, and Thailand). Throughout, chapters within this book question whether Japan’s ODA can fit the ‘contemporary global trend toward poverty-oriented international development assistance’ with satisfactory quality and effectiveness. The book’s historical and political analyses of Japan’s ODA are useful for understanding what has formed Japan’s aid philosophy, actual policymaking, and implementation of ODA. The editor, David Arase, carefully deals with these issues in his introductory and concluding chapters by suggesting many signs of improvement in Japan’s ODA policy. This book, however, seems to have been concluded before the recent development of cooperation in the social sector and at grassroots levels and a series of radical changes that occurred in aid administration. Regrettably, its emphasis on structural inertia and inadequate resources perhaps obscure the broader discussion of whether the social sector and governance focus, which is the standardized norm of ODA for alleviating poverty, are truly sufficient for achieving development objectives.

On 20 March 2012, the Polish Council of Ministers adopted Poland’s first Multiannual Development Cooperation Programme. Its title ‘Solidarity, Democracy, Development’ reflects the ongoing debates which surround Polish aid, and the problem with finding an agreement in defining how the Polish Official Development Assistance (ODA) should look. As I will describe in this chapter, since the process of establishing Polish Aid commenced during the EU accession process up until now, Polish foreign aid professionals are trapped between two competing paradigms. Their work is described in terms of ‘democracy promotion’ and ‘sharing transition experiences’: a trope which is fulfilling national sentiments and interests through involvement in Eastern Europe, and a modality of aid in which ‘development’ is understood as the ‘eradication of poverty’ campaign with a special focus on Africa. This is a trajectory strongly encouraged by the EU and the OECD, and implemented with the support of the ‘Europeanization’ discourse. The respective weights these trajectories are receiving in the Polish ODA are well illustrated by the 2012 financial allocations; the countries of the Eastern Partnership received allocations worth PLN 110.4 million (approx. USD 39.42 million), while for African countries the corresponding amount was PLN 9.1 million (USD 3.2 million).

Korea as an OECD Dac Member: 10-Year Achievements and Way Forward

In the 1990s, Japan—the world’s largest provider of Official Development Assistance during that decade—was compelled to respond to emerging domestic and international circumstances, leading to adjustments in its cooperation policies and priority sectors. The defining feature of these changes was a “diversification in cooperation.” As the third installment in the series commemorating the “70 Years of Japan’s Official Development Assistance,” this article focuses on the period from the late 1990s to the present. It first outlines major international trends in development cooperation, then it examines domestic conditions and Japan’s development cooperation policies. After identifying the background and factors that facilitated the diversification in cooperation, the article describes concrete development cooperation initiatives and projects during the period. The concluding section emphasizes that, given today’s international environment, it is essential to ascribe new value to development cooperation—particularly through contributions to national comprehensive security and enhancing the attractiveness of the cooperation.

As an emerging donor of Official Development Assistance (ODA), the South Korean government has announced that it will provide a ‘South Korean Model of Development Cooperation’. This paper explores how the South Korean development experience from the twentieth century can be transformed into an alternative for development cooperation in the twenty-first century. The early aid management system in South Korea contributed to the bureaucratic capacity-building that was necessary for the installation of the developmental state. In its quest for industrialization, the authoritarian developmental state in South Korea maintained autonomy vis-à-vis foreign donors, foretelling the ‘country ownership’ principle in today's global norms of ODA. However instructive the South Korean experience may be, it will not work as a ‘one size fits all’ model for the twenty-first century development due to such fundamental changes in the global political economy as the WTO regime and democracy promotion. In this regard, South Korea's own double transition of economic liberalization and democratization offers another important lesson. Therefore, we suggest a South Korean ‘alternative’ that respects both the global norms for development cooperation and the national democratic aspirations. It would be a democratic developmental state whose autonomy is more deeply embedded in civil society and whose capacity further expands human capabilities.

The Since 2002, Japan has contributed approximately 26 billion pesos for the sustainable peace and development efforts in Mindanao through Official Development Assistance (ODA), which aligns with the objectives of the Sustainable Development Goals (SDGs). Following the peace agreement between the Philippine government and the Moro separatist group, Japan provided an additional USD 13 million for post-conflict reconstruction. This article examines the rationale behind Japan’s foreign aid in the post-conflict reconstruction of Bangsamoro. Employing a qualitative research methodology with a descriptive-analytical approach, this study draws on secondary data from reputable academic journals indexed in Scopus and Sinta, as well as official reports from the Japanese Ministry of Foreign Affairs, the Bangsamoro government, and credible news sources. Primary data was obtained through observation and interviews with stakeholders in Bangsamoro during the author’s internship at the Al Qalam Institute, Ateneo de Davao University, a non-governmental organization committed to interfaith harmony and community empowerment for peace and sustainable development. The analysis applies a realist perspective using Hans Morgenthau’s A Political Theory of Foreign Aid as the theoretical framework. The findings suggest that while Japan’s ODA significantly contributes to regional development and stability in Bangsamoro, it simultaneously advances Japan’s geopolitical and economic interests, particularly in countering China’s assertiveness in the South China Sea and its economic dominance in Southeast Asia. Keywords : Japan; Official Development Assistance (ODA); Sustainable Development and Peace; Bangsamoro; Post-Conflict Reconstruction;

This paper considers the origins of South Korean ODA (official development assistance), working through the lens of KOICA’s (Korea International Cooperation Agency) two main predecessor institutions in the early 1960s. In contrast to KOICA (1991-prsent), associated with a rich Korea, this earlier period was dominated by small-scale efforts at outreach with neighboring countries, especially in Southeast Asia and Africa.In this context, two arguments emerge. First, Korean aid began earlier than is generally assumed, with the first outreach to African partners coming under discussion as early as 1960. Second, when the nation began its official in-country workshops a few years later, these were heavily influenced by the experiences Koreans had themselves undergone with the US in the form of “third-county training,” in which the US paired its partners to speed up the transfer of knowledge. In brief, Korean aid at its start point took place most frequently with new post-colonial partners, whether for diplomatic recognition, or for the exchange of knowledge, and went on to shape a new network as KODCO (Korean Overseas Development Corporation, 1965-1991) became a reality in the mid-1960s.

International development cooperation is a crucial component of the COVID-19 response, especially in supporting efforts of the poorest and most vulnerable countries to respond to the pandemic and the resulting economic crisis. Development cooperation provides a vital countercyclical flow in times of crisis and can help fight poverty and prevent inequality from worsening within and between countries. At the same time, there is also fiscal pressure on donor budgets due to the pandemic. While some major donors increased their development cooperation budgets, others succumbed to domestic fiscal pressure and cut official development assistance (ODA).

Changes in comparative advantage should reflect changes in factor endowment, but increasingly, changes in trade policies also affect a region's trade performance. Based on the arguments in Balassa's stages of comparative advantage thesis, this paper looks at the performance of manufacture exports in a number of Asian and Latin American economies over the period 1981-1997 and examines the revealed comparative advantage indices between economies in East Asia, Southeast Asia and Latin America. Although the RCA measurement may not distinguish between the factor endowment effects from the trade policy effect, we argue that RCA measures provide indication on the movement in a region's comparative advantage. The evidence strongly suggests that despite the strong export performance experienced by East Asian economies, they are losing their comparative advantage to the lower-tier economies in Southeast Asia and Latin America.

Overall official development assistance volumes increased to their highest level ever in 2020, even as global GDP fell dramatically. This chapter explores what drove the rise in official development assistance in 2020, the implications for development co-operation and trends to watch in 2021 including vaccines, climate and debt.

Among the countries identified by the 1993 World Bank report as part of an «East Asianmiracle» three were singled out as the most suitable models for successful economic development - Indonesia, Malaysia and Thailand (asean3). While the first generation of East Asian industrializers had relied on strong state intervention, these Southeast Asian economies were prized for their relatively liberal FDI attraction and trade policies. Today, however, it is evident that the asean3 have failed to repeat the economic success of South Korea and Taiwan. Rather, they seem to be victim of a so-called «middle-income trap», that is, their industrial production continues to be dependent on foreign technology and management. The article discusses the case of Vietnam against this critical background. While Vietnam has been often presented as a promising fifth Asian tiger, there is a wide evidence to suggest that it may be trapped in the same unfavorable dynamics affecting the asean3.

Japan has a long history of an aid donor. It became the first non-western donor through the offering of official development assistance (ODA) in 1954 by joining the Colombo Plan to assist developing countries in Asia.

BackgroundTransitional economies in Southeast Asia—a distinct group of developing countries—have experienced rapid urbanization in the past several decades due to the economic transition that fundamentally changed the function of their economies, societies and the environment. Myanmar, one of the least developed transitional economies in Southeast Asia, increased urbanization substantially from 25% in 1990 to 31% in 2019. However, major knowledge gaps exist in understanding the changes in urban land use and land cover and environment and their drivers in its cities.MethodsWe studied Yangon, the largest city in Myanmar, for the urbanization, environmental changes, and the underlying driving forces in a radically transitioned economy in the developing world. Based on satellite imagery and historic land use maps, we quantified the expansion of urban built-up land and constructed the land conversion matrix from 1990 through 2020. We also used three air pollutants to illustrate the changes in environmental conditions. We analyzed the coupled dynamics among urbanization, economic development, and environmental changes. Through conducting a workshop with 20 local experts, we further analyzed the influence of human systems and natural systems on Yangon’s urbanization and sustainability.ResultsThe city of Yangon expanded urban built-up land rapidly from 1990 to 2000, slowed down from 2000 to 2010, but gained momentum again from 2010 to 2020, with most newly added urban built-up land appearing to be converted from farmland and green land in both 1990–2000 and 2010–2020. Furthermore, the air pollutant concentration of CO decreased, but that of NO2 and PM2.5 increased in recent years. A positive correlation exists between population and economic development and the concentration of PM2.5 is highly associated with population, the economy, and the number of vehicles. Finally, the expert panel also identified other potential drivers for urbanization, including the extreme climate event of Cyclone Nargis, capital relocation, and globalization.ConclusionsOur research highlights the dramatic expansion of urban land and degradation of urban environment measured by air pollutants and interdependent changes between urbanization, economic development, and environmental changes.