Embed Size (px)
Citation preview
1
Avenues of Mutual Cooperation in ODA Strategies
of India and Japan in Africa
Prashant Kumar
Visiting Fellow,
Japan Centre for Economic Research
&
Associate Fellow,
Observer Research Foundation
2
Table of Contents: Abstract: ................................................................................................................................................................................ 4
Chapter 1: Introduction ..................................................................................................................................................... 5
Scope and Objectives of the Study: ......................................................................................................................... 9
Structure of the Study: .............................................................................................................................................. 10
Limitations:................................................................................................................................................................... 10
Chapter 2: India’s ODA Program and Strategies in Africa ................................................................................ 11
India’s Official Development Assistance Program .......................................................................................... 11
India’s ODA program in Africa ............................................................................................................................. 17
Indian ODA Strategies in Africa ........................................................................................................................... 19
Grants and Loans ................................................................................................................................................... 19
Indian Technical and Economic Cooperation ............................................................................................... 21
Lines of Credit (LOCs) ........................................................................................................................................ 23
Sub Strategies of India ODA program in Africa .............................................................................................. 27
Debt Relief ............................................................................................................................................................... 27
Export-Import Incentives .................................................................................................................................... 27
India-Africa Forum ............................................................................................................................................... 28
Importance of India’s African Development Cooperation ............................................................................ 28
Chapter 3: Japan’s ODA Program and Strategies in Africa ........................................................................... 30
Japan’s Official Development Assistance Program .................................................................................... 30
Structure of the ODA program .......................................................................................................................... 33
Gross ODA .............................................................................................................................................................. 34
Grant Aid .................................................................................................................................................................. 35
ODA Loans .............................................................................................................................................................. 37
Technical Cooperation ......................................................................................................................................... 40
Japanese ODA Strategies and Sub-Strategies in Africa ................................................................................. 41
Grant Aid .................................................................................................................................................................. 43
ODA Loans .............................................................................................................................................................. 47
Technical Cooperation ......................................................................................................................................... 49
Tokyo International Conference on African Development (TICAD) ........................................................ 51
Importance of Japanese Aid to Africa .................................................................................................................. 54
Chapter 4: Avenues for Synergy in Strategies of ODA program in Africa of India and Japan .............. 56
Premise ......................................................................................................................................................................... 56
Debt Relief Coordination ......................................................................................................................................... 58
Mutual Cooperation in Technical Cooperation ................................................................................................. 60
Merger of TICAD and India-Africa Forum ....................................................................................................... 63
Japan’s Involvement in India-African LOC program ..................................................................................... 65
3
India-Japan Economic Cooperation for African Development .................................................................... 67
Chapter 5: Conclusion .................................................................................................................................................. 71
Endnotes and References: .......................................................................................................................................... 75
Figures: Figure 1: Total Grants and Loans to Foreign Governments ......................................................................... 12
Figure 2: India Total ITEC 2008-2014 .................................................................................................................. 14
Figure 3: Geographical Distribution of Indian LOC program 2015........................................................... 15
Figure 4: Governmental Set-up of India's ODA program .............................................................................. 16
Figure 5: Grant Amount to African Countries by India .................................................................................. 20
Figure 6: Sectorial Distribution of Grants to African Nations ..................................................................... 21
Figure 7: Evolution of Geographical Distribution of Indian LOCs 2004-2016 ..................................... 24 Figure 8: Governmental Set-up of Japanese ODA Program .......................................................................... 33
Figure 9: Gross Japanese ODA .................................................................................................................................. 34
Figure 10: ODA as Percentage of GNI .................................................................................................................... 35
Figure 11: Total Grant Aid from Japan .................................................................................................................. 36
Figure 12: Total Debt Relief from Japan ............................................................................................................... 37
Figure 13: Total ODA Yen Loans from Japan ...................................................................................................... 39
Figure 14: Technical Cooperation from Japan ................................................................................................... 41
Figure 15: Geographical Distribution of Gross ODA from Japan ................................................................ 43
Figure 16: Grant Aid by region 2012 ..................................................................................................................... 44
Figure 17: Japanese Grant Aid to Africa 2007-2013 ....................................................................................... 45
Figure 18: Sectorial Distribution of Grant Aid to Africa 2013 .................................................................... 46
Figure 19: Japanese Debt Relief to Africa ............................................................................................................ 47
Figure 20: ODA Loans to Africa ................................................................................................................................ 48
Figure 21: Sectorial Distribution of Loan Aid to Africa 2013 ...................................................................... 49
Figure 22: Sectorial Distribution of Technical Cooperation to Africa 2013 .......................................... 50
Figure 23: Case Study: ProSavana Mozambique ............................................................................................... 62
Tables: Table 1: Type of ODA and Criteria .......................................................................................................................... 16
Table 2: African Countries with Active LOCs from India 2013-14 ............................................................ 25
Table 3: LOC Criteria, Rate of Interest, Maturity, Moratorium and Grant Element ........................... 26
Table 4: Terms and Conditions of Yen Loans ..................................................................................................... 38
Table 5: Geographical Distribution of ODA Yen Loans 2013 ....................................................................... 47
Table 6: TICAD V Activities and Commitments ................................................................................................. 53
4
Abstract:
The expected rise of Africa in the coming decades will have transformational shift away from
Asia as the new economic destination in the global economic system. For countries to be able
to tap this new market, which will have gained a demographic dividend as early as 2040,
foundations through bilateral and multilateral relationship will need to be laid down. While
some countries have recognized this emerging economic frontier, China has been the first to
act on it and through the extension of its aid program, has been able to capture a large
portion of the African continent. For countries like India and Japan, for whom western
markets are already becoming saturated, Africa will play an integral part to their future
economic progress. Without capturing or penetrating these markets early on, India and
Japan both will find it extremely difficult, as will the rest of the world, to make inroads in the
region. Thus, it is important for either country to begin their efforts now. Following the
Chinese model, India and Japan will be best served by strengthening government to
government relations first before securing other sectors. While bilateral and multilateral
relations continue between India, Japan and African countries, to be able to compete with an
economic giant such as China, both India and Japan will have to come together to be able to
effectively mount an alternative. Without the other, either country though will continue to
build on its presence in the continent, will be impeded by the many constraints their
programs have. Both countries are cognizant of the advantages of providing developmental
assistance as a token for future interaction. Either country has had a long history in
providing such assistance, but in the face of China’s enthusiasm in the region, a lot more
needs to be done. Thus, it is imperative for both India and Japan to find synergies in their
ODA strategies for Africa, in effect finding avenues of mutual cooperation for African
development. A joint program may perhaps have the ability to compete with Chinese
penetration, especially in areas where India or Japan have a comparative advantage. This
paper thus aims to showcase the future importance of Africa, describe the Indian and
Japanese ODA programs as a whole, their history and strategies in Africa, the importance of
either program in the region and finally, suggest possible avenues of mutual cooperation,
based on the strengths and weaknesses of either country’s program.
5
Chapter 1: Introduction
Decades of sustained economic growth and social and political reforms have catapulted Asia
to a global leadership position in the 21st century. The century will be characterised not by the
domination of any single country as in Pax Britannica or Pax Americana, but by a collective
leadership of Asian nations. However, the emergence of Africa is now clearly visible and
assured. Therefore, 60% of the world population residing in the Afroasia region will
determine the future of the world economy.
While the Asian economies have grown in the past few decades, Africa on the other hand has
remained relatively ignored, primarily due to the many internal crisis that have plagued the
region since colonial powers dismantled their colonies post the Second World War. Vast civil
wars, social and religious unrests and squabbles among warring factions, tribes and warlords,
has kept the African group of countries, somewhat pariah to the rest of the world. Where the
rest of the world grew more into a global village interdependent on each other, African
nations have been actively isolated until only recently.
Since the 1960s, at least 40 percent of countries south of Sahara (SSA) have had at least one
period of civil wari. While it commonly believed that these civil unrests are caused by ethnio-
linguistic differences, the actual reason has predominantly been due to poverty and economic
isolation. Moreover, Africa’s socio-demographic pains, such as low demographic indicators
and prevalence of diseases such as AIDS/HIV have kept African markets bare in foreign
investment as investors have not really seen Africa as a potential market.
Yet in recent years, a change in the African geo-political landscape, especially with increased
economic and political stability, the interest in Africa as a destination is starting to resurface.
Moreover, increasing demographic indicators show that Africa is poised to become the next
demographic dividend destination in the coming years, following India, which is currently
enjoying this advantage. The World Bank estimates that by 2040, the demographic dividend
India currently enjoys will shift to Africa instead.
At current, Africa’s importance may be somewhat understated, as the rise of Asia has been
the predominant force in global economics so far. But, as the Asia’s growth plateaus in the
coming years, especially due to stabilization of it demographics, Africa will clearly become
the next major economic destination for global investment. With the shift in global
population becoming more Africa centric, with higher disposable incomes and a greater
consumer base, Africa will become one of the largest potential markets in just a few years.
6
According to projections made by Mckinsey and Co, Africa which currently has a
consolidated GDP of approximately USD 1.6 trillion will grow to roughly USD 2.6 trillion
by 2020ii. Additionally, estimates suggest African consumer spending could reach levels of
USD 1.4 trillion in the same time period. The continent will have nearly 128 million
household with discretionary incomes by end of 2020iii
. Numbers and prediction such as
these only lead to the conclusion that the potential importance of Africa is not only emerging
but looming large on the global economic system.
Africa’s potential does not only have implications of the continent’s internal economic
growth, where domestic economies will benefit strongly from the emergence of a new market,
but will more importantly become the next major investment destination in the world. What
India and China have been in the past few decades, Africa will eclipse in a much shorter time.
Global economies that have found saturation in markets like South America or Asia, will
look toward Africa as the next investment destination, and those with rooted linkages in the
area will have the advantage. By economic predication, the race to capture Africa will be
highly dependent on historical linkages, much like the role they are playing in Asia, where
countries like the United States or the United Kingdom managed to make quick investment
inroads, before the world could react.
Though historical linkages between India, Japan and Africa have existed for centuries they
had not yet been converted to higher levels of commercial, economic and investment flows.
But some progress has been surely been made over the past decades. India’s trade with Africa
amounted to USD 60 billion in 2013 and is expected to grow to USD 90 billion by 2015iv
.
India also has USD 5 billion worth of Lines of Credit extended to various African Nations.
Japan’s bilateral trade with the region was recorded at USD 40 billion in 2013 but with the
rapid economic growth in the region, more Japanese firms are looking to invest in Africa.
Japanese aid announcements will see a further USD 32 billion be given to African nations in
the next five yearsv.
Asia’s three main economic powerhouses, i.e. Japan, China and India, must begin to
formalize their interaction and integration with various regions across the world and
especially with Africa that is now beginning to emerge from its long stagnation, mis-rule and
social traumas. All countries have long standing relations with parts of Africa. These have
been intensified in more recent years. China has so far emerged as the leader with bilateral
trade of USD 220 billionvi
. As of 2012, 51.8 percent of total Chinese foreign aid was
7
earmarked to Africa. China has also developed and maintained strong ties with various
African nations. The Forum for China-Africa Cooperation (FOCAC) has been imitated by
both Europe and India and China’s investment of USD 200 million to construct the new
headquarters of the African Union Headquartersvii
in Addis Ababa was another step in
solidifying their position among African nations.
But as Asia, especially the Asian giants have started to solidify their positions and as south-
south cooperation (India-Africa and China-Africa) has increased, growth in investments
especially towards creating strategic linkages from Asia have far outperformed those from
developed markets. From 2007-2012, new investments from emerging and developing
markets, primarily from Asia grew at CAGR of 20.4 percent. Concomitantly, investments in
new projects by developed markets grew only at 8 percent CAGR.
China’s isolated approach to African development is primarily based on the ethos of
strengthening its strategic interests in the region. It not only has the volumes in resources but
harnesses large sums of soft power that allow it to be a single, solitary player in the African
markets, which neither India nor Japan have the ability to compete with on their own.
Moreover, political and ideological differences between China and India and Japan and China
do not favour cooperation amongst these countries. As it is, China is unlikely to want to share
strategic interests or share avenues which secure a future market for its own economy.
Additionally, political differences and conflicts with both India and Japan (Indian border
disputes and South China Sea disputes) preclude China from coming to any discussion on
strategic cooperation in African development. Finally, while Japan and India can use each
other to fill in each other shortcomings in the region (linkages, expertise etc.), China does not
need much assistance in filling its own gaps and even if it did, these gaps are unlikely to be
helped by countries like India and Japan.
China’s foreign aid policy, though beginning as early as 1950, is now in its third phaseviii
which is focused on tying aid to securing its strategic and economic interests. China has been
one of the main adopters of the ‘Angola Model’, which provides cheap concessionary loans
to structurally fragile African countries, backed by commodity collateral. These countries,
which are often unable to repay loans and unable to borrow from international financing
institutions due to poor credit ratings are then offered refinancing by China, tied with
conditions. For example, China was able to secure oil-exploration rights for its oil companies
in Angola in 2006, in lieu or part of the repayment deal worked out with the countryix
.
8
According to experts, from 2004 to 2011, China had conducted such deals with seven
resource-rich countries in Africa, worth nearly USD 14 billionx.
Regardless of Chinese officials defending aid to Africa as a selfless, altruistic gesture for
south-south cooperation, the actual motives behind such aid has been fairly well documented.
China has been targeting resource rich African nations to be able to secure their own
economic presence in these countries. Unlike other countries, China’s recognition of Africa’s
importance as a potential future market is evident from its support of African nations’
candidacy to the United Nations as early as 1963. Since then, it has been strategically and
gradually solidifying its ties, especially through its infrastructure aid program to penetrate
and capture these important marketsxi
.
As the study will show, the recognition of Africa’s importance may not be a recent
phenomenon with all three India, Japan and China recognizing this importance very early on,
the real push for African development that serves economic and resources needs of these
three countries, has happened only in the last 15 years. Since the year 2000, each country has
devised new methodologies, strategies and tools to explore this future market, but China is
the only one which has been able to gain significant ground. Moreover, other countries
interested in securing future markets and consumers have begun to explore the region as well,
a majority of which have masked this strategic interest as economic and aid diplomacy.
Given the renewed global interest in Africa, and more so for the three Asian giants, it is
imperative to take stock of the experience hitherto with the objective of learning from the
past and charting a more effective way forwardxii
. This is especially relevant today as the
Asian century becomes more prominent in global affairs. An in-depth analysis of the form
and level of economic ties with Africa and the three Asian giants, could reveal methods and
strategies that could yield the best mutual benefit for the region and those investing in it.
The study will aim to analyse what has worked, what can be replicated and what should be
avoided in enhancing Afro-Asian economic and commercial ties. Further, the paper will aim
to explore the viability and potential of creating synergies between India and Japan for
trilateral cooperation in Africa. This will be done with the objective of identifying potential
areas for Indo-Japanese cooperation for maximizing the benefits of their interventions in
Africa.
9
Scope and Objectives of the Study:
The purpose of this study is to draw a blueprint of the existing efforts in government to
government relations of India and Japan in East and Southern Africa, especially through the
context of aid and official development assistance from which to find avenues of cooperation
and collaboration, in an effort to solidify their respective positions in the continent and
possibly help in capturing the market in years to come.
The study will explore the historical linkages of both India and Japan with Africa, with an
emphasis on Official Development Assistance. It aims to describe the past and existing
bilateral cooperation between India and Africa; Japan and Africa. The objective is to find
synergies in strategies employed by the two countries in the African continent, describe best
practices and methods in official development assistance that can be employed by either India
or Japan and list some of the challenges and obstacles that have hindered or can impede
bilateral relations and economic penetration into the African market.
Thus the broad objectives of the study are as follows:
Showcase the historical and current strategies employed by India and Japan in Africa,
in terms of Official Development Assistance
Broadly list and describe the strategies for each country
Compare benefits of collaborative approach to Africa versus isolated approach
Explore areas of possible cooperation and collaboration based on the strategies
employed
Understand challenges faced by either country in its relations with Africa
Policy recommendation based on explored synergies in strategies and possible
outcomes of such cooperation
The scope of the study will include historical and current data on bilateral aid from India and
Japan to countries in Africa. Historical linkages and any shared history between the three
regions. Market penetration of India, Japan and China in African markets including private
sector investment of India and Japan and finally strategies as described by various
stakeholders, experts and those documented in literature. The structure of the paper is
provided below.
10
Structure of the Study:
The study is divided into five chapters. The first chapter includes the introduction, objectives
of the paper. The second chapter, which also serves as the literature review will use both data
and existing literature to describe the Indian and Japanese Official Development Assistance
programs, and their programs in Africa in particular. The third chapter focuses on describing
the strategies used by either country in their individual programs in Africa, some of the best
practices that have emerged and finally some of the challenges either country has faced over
time. The fourth chapter aims to outline the areas of possible mutual cooperation between
India and Japan and some of the risk and costs associated with collaborative strategies. The
chapter will also briefly discuss the involvement of the private sector in the G-to-G relations
between the countries. The fifth chapter is the conclusion and possible policy
recommendations for both Japan and India.
Limitations:
One of the major constraints of the study has been the unavailability of historical data on
transfers of ODA from both India and Japan, but more so for the latter donor. While the
efforts have been well documented and Japan’s ODA donations have been recorded for
countries in Asia and South America, it is only recently that better recording of data for
Africa has been started. Negligible funds and resources provided by Japan to Africa in the
past have also been a reason for the limited availability of data. Moreover, data in Japan,
tends to be in Japanese, which may or may not have translation into English, which also
limits the use of some data. On the other hand, India data, though available historically is not
as efficiently or regularly updated in its records, showing gaps in certain more recent years.
The aim of the study to find areas of mutual cooperation in strategies employed by both India
and Japan are also based on finding complementary variables within strategies. While some
of this process is based on data and numbers, a few of the variables are based more on
reasoning, which has its own limitations.
Finally, the study also limits itself on focussing primarily on G-to-G relations with a small
portion dedicated to private investment flows into Africa from India and Japan. There may be
areas in private investment where India and Japan have been cooperating, but those areas
have not been studied in detail in this paper.
11
Chapter 2: India’s ODA Program and Strategies in Africa
India’s Official Development Assistance Program
India’s Official Development Program started unlike the programs of the more conventional
donors in the global aid sphere. India started its program as early as 1947, the year it gained
its own independence from British rule. The unique characteristic of India as a donor was the
fact that it was itself a country in need of large scale aid and development assistance. The end
of the British rule in India had left the country under massive economic and fiscal strain, with
much of the wealth now in British coffers, rather than Indian hands.
The experience of British colonial rule gave impetus to India’s foreign aid. Domestically
known as Development Partnership rather than aid, India developed its program purposed to
assist and develop similar countries that had been affected by war, colonialism and conflictxiii
.
Development partnership were in terms an act of solidarity between similarly developing
countries which had been left economically weakened by various factors, most of important
of which was colonialism.
It was India’s own economic fiscal strain that only allowed the program to aid and assist in
very small amounts, nothing compared to the post world war donations being made by the
Allied powers to rebuild Europe and Asia, but even these small amounts paved the way for
India’s development assistance program which in later years would become an integral part
of the global development system. India’s first aid recipient was as early as 1950, only two
and half years post-independence. India helped in the balance of payment crisis in Burma,
soon after the latter’s independence from Great Britain in 1948xiv
. India was one of the key
partners in the group of Commonwealth countries which provided USD 6 million for Burma
(modern day Myanmar) to correct the BOP crisis affecting the country. India’s first instance
of bilateral aid came in 1949, when India provided assistance to Bhutan.
In January of 1950, India signed the Colombo Plan, alongside seven other developed and
developing countries to create and develop a framework which would work towards social
and economic development in the Asia-Pacific region. The pact, which was ratified in 1951,
was to mainly use development assistance in form of loans and grants through bilateral or
multilateral sources to rebuild the Asia-Pacific region. Yet, the more important aspect of the
Colombo plan was to instil a framework for south-south cooperation which would look to
share technology and developmental experience among developing countries themselves.xv
12
The 1950s were the shaping decade of the Indian ODA Program. Apart from the 200 million
dollar multi-year loan to Myanmar and 100 million dollar multi-year loan to Nepal, India
signed not only the Colombo Plan and the Panscheel Treaty with China, but also adopted its
non-interference stance in both its political and development assistance outlookxvi
. India,
unlike developed countries and their financial organizations like the Bretton Wood
Institutions decided on a path of complete non-interference and aid primarily through
technical assistance. Where Bretton Wood institutions may have dictated certain policy
measures and structural adjustments, India took a more hands-off approach to its
developmental program. This approach was further solidified by India’s participation as a
founding member of the Non-Aligned Movement in 1961, officially de-linking itself from
either of the two Cold War ideologies. India has extended up to USD 1.08 billion in grants
and loans as of 2015xvii
.
Figure 1: Total Grants and Loans to Foreign Governments
Source: Budget Analysis, Indian Budget 2014-15
India started its next phase and instrument of development assistance by launching the Indian
Technical and Economic Cooperation program in 1964. This program would become the
flagship ODA program in the Indian arsenal and would dominate Indian assistance until late
2003. The ITEC program was “predicated under the belief that it was necessary to establish
relations of mutual concern and inter-dependence based not only on commonly held ideal and
aspirations, but also on solid economic foundations. Technical and Economic cooperation
was considered to be one of the essential functions of an integrated and imaginative foreign
policy”xviii
.
0
1000
2000
3000
4000
5000
6000
7000
8000
2010-11 2011-12 2012-13 2013-14
Total Grants and Loans to Foreign Governments
INR
USD
13
The ITEC program, initially extended to South Asian countries now encompasses 158
countries in all corner of the globe, including Africa and Latin Americaxix
. The ITEC
program uses six methods of providing assistance to the various countries. These are:
1. Training of workers from state-owned enterprises, bureaucrats and policy makers
nominated by the partner country.
2. Feasibility and consultancy services related to specific development projects
3. The sending of Indian experts to the requesting country
4. Study tours in India for individuals and groups suggested by partner countries
5. Donation of hardware to partner countries
6. Humanitarian aid for disaster reliefxx
.
The unique characteristic of the ITEC program, much like India’s overarching ethos of
Official Development Assistance is that the ITEC program is demand driven rather than
offered by India. This simply means that partner countries must ask for assistance from India,
which then provides assistance without interference in policy or politics. The recipient
country determines the overall nature of the assistance as well as the specific requirements for
projects it wishes to undertake.
The ITEC program, though initially a bilateral endeavour, became instrumental in India’s
engagement with trilateral and multilateral organizations and institutions. The program has
been used in various regional and inter-regional groupings such as the Economic Commission
for Africa, Industrial Development Unit of Commonwealth Secretariat, UNIDO, G77 and
G15. ITEC activities have also been used in grouping like Association of South East Asian
Nations (ASEAN), Bay of Bengal Initiative for Multi-Sectorial Technical and Economic
Cooperation (BIMSTEC), Mekong-Ganga Cooperation, African Union, Afro-Asian Rural
Development Organization (AARDO), Pan African Parliament, Caribbean Community
(CARICOM), World Trade Organization (WTO) and the India-Africa Forum Summitxxi
.
The initial success of the ITEC program made it the flagship instrument in India’s ODA
arsenal, even at a time when India itself was the largest single recipient of foreign aid. The
ITEC program, alongside Grants and Loans, had remained the two methods of ODA until
2004. As of 2014, India extends INR 2 billion to various countries through its ITEC program.
The trend over the last few years is shown belowxxii
.
14
Figure 2: India Total ITEC 2008-2014
Source: Budget Analysis, Indian Budget 2014-15
In 2004, with the re-emergence of the Congees party as the ruling party in India, the
country’s policy shifted more from domestic focus to expanding India soft power reach. This
instituted certain changes in India’s ODA program as well, introducing the third instrument
of development assistance- Lines of Credit (LOC).
The LOC program was a part of the larger India Development Initiative launched by the
incoming government in trying to expand India’s soft power reach. The IDI was later
renamed as the India Development and Economic Assistance Scheme (IDEAS). The
programs objectives are to provide capacity building and skill transfers, trade and
infrastructure development through Lines of Credit.
A Line of Credit (LOC) is a financing mechanism by which the Export-Import Bank (EXIM)
of India extends support for export of projects, equipment, goods and services from India.
LOCs are extended through EXIM bank on its own and at the behest and support of the
Government of India. The LOCs are extended to (a) Foreign Government or their nominated
agencies such as central banks, state-owned commercial banks etc.; (b) National or regional
development banks; (c) Overseas financial institutions; (d) Commercial banks abroad and (e)
Other suitable entities. Once a LOC is extended, it is up to the recipient organization or
institution to disburse the credit accordingly to the project stakeholders. The LOC mechanism
provides a safe mode of non-recourse financing option to Indian exporters, especially to
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
INR
Bil
lio
n
Year
India Total ITEC (2008-2014)
15
Small and Medium Enterprises, to enter new export markets and expand business in existing
export markets without any payment risk from the overseas importersxxiii
.
As of May 2015, India has extended 193 Lines of Credit to various countries, 70 per cent of
which have been extended to African Nations. The total amount extended in LOC is close to
$10 billion. The list of LOCs extended are provided in Annexure Table 3. The distribution of
LOCs as per region is shown below.
Figure 3: Geographical Distribution of Indian LOC program 2015
Source: EXIM Bank
73.6%
15.5%
6.7%
1.0%
1.0% 1.6%
0.5%
Indian LOC Program
Africa
Asia
South America
Central America
CIS
South Pacific
Carribean
16
Figure 4: Governmental Set-up of India's ODA program
Source: International Development Cooperation Research, Centre for Policy Research
India’s ODA program follows three simple guidelines and each of its modes of development
assistance aim to adhere to these guidelines. These three are:
1. Demand Driven
2. Non-Conditional
3. Decentralized Administration
Table 1: Type of ODA and Criteria
Type of
ODA/Criteria
Grants and Loans ITEC Lines of Credit
Demand Driven Yes but also
provided for
disaster relief and
crisis alleviation
Only on Request
from Recipient
Government or
Body
Only on Request
from Recipient
Government or
Body
Non Conditional Completely unless
loan, by which
interest rate is
levied.
Completely Non-
Conditional
Partially/ LOC are
tied to Indian
companies and
contractors
Ministry of External Affairs/Development
Partnership Administration(DPA)
Grants and Loans
ITEC Lines of Credit
17
Decentralized
Administration
Now coordinated
by DPA, previously
by no particular
agency
Now coordinated
by DPA, previously
by no particular
agency
EXIM
Bank/Ministry of
Finance and
Ministry of External
Affairs
The three modes of development assistance described above are India’s direct ODA program,
mostly engaging in bilateral Government to Government (G2G) interactions and relationships.
But India is also an active member of many of the global and regional multilateral
organizations and groupings.
Apart from being a member of the G15, G20, G24, G77 and some of the larger economic
groupings, India is an active member in regional cooperation groupings such as the South
Asian Association for Regional Cooperation (SAARC), ASEAN and the African Union.
Moreover, India is an active participant in the United Nations and is considered one of the
founding members of the United Nations itself. It keenly participates in functions of
multilateral organizations across the world, on both a regional and global level. India is
leading member in both the Bretton Woods institutions i.e. World Bank and IMF. India
currently holds 3.05xxiv
percent of total voting power in the World Bank and 2.4 percentxxv
total voting power in IMF.
On a regional scale, India is one of the more important regional members in the Asian
Development Bank, holding 6 percent of the total subscription and five percent of total voting
powerxxvi
. India also has 0.2 percent voting power in the African Development Bankxxvii
. In
more recent year, India has joined the BRICS (Brazil, Russia, India, China, and South Africa)
grouping of countries, which has launched the new multilateral initiative to promote south-
south cooperation called the New Development Bank. India is a founding member and
currently holds one-fifth or 20 per cent of the voting rights as well as the presidency of the
Bank itself. It is also a member of the China led Asian Infrastructure Investment Bank (AIIB)
which will focus on financing infrastructure development in the developing world.
India’s ODA program in Africa
India’s engagement with Africa started as early as the 1960s. Then still considered a region
which had little hope, India’s relationship with African nations was based on a few historical
18
factors. First, many of the African nations, much like India, had suffered under colonial rule
and were starting to emerge as independent nations. Seeing a shared history and a possible
share future, one marred by economic and fiscal strain, India’s political ties and relationship
with Africa strengthened during this time as India was able to provide an image of a country
that was able to shed the shackles of post-colonial rule. Second, while under colonial rule,
Indian workers were often taken to the African region as indentured labourers. The removal
of colonial powers had left many Indian in these countries, who post-independence began to
gain economic, political and cultural ground within these countries. While these Africans of
Indian descent became more rooted in their adopted African lives, their relations with India
remained relatively strong allowing India itself to capitalize on the growth of this segment of
the African population. Third, much like India, which received large amounts of conditional
aid from the western powers, Africa too had experienced large scale interference from
developed nations trying to assist African nations in their development objectives. The
mistrust arising from the short lived experiments of the developed donors led African nations
to move towards countries who were (i) nonaligned and (ii) had experienced similar
conditionalities from both previous colonial powers and foreign aid donors.
India’s engagement with the African countries remained relatively minnow till the early
1990s. At first, India’s primary concern had remained to help African nations achieve
independence from colonial powers and follow its own example into the Non Aligned
Movement (NAM). At the same time, it also encouraged Persons of Indian Origin (PIOs)
residing in African countries to become a more integral part of the system rather than rely on
India to do. While these measures had helped India gain ground in the African continent,
especially in former British colonies, the loss of the Sino-India war of 1962 and the soft
stance of India of setting an independence deadline for African nations within the NAM,
quickly made African nations to question India’s position and viability as a leader.
India’s polices drastically changed in Africa by 1964. Instead of regarding Africa as a bloc of
nations, to be dealt with altogether, India started embarking on a more individualistic policy,
which tried to strengthened foreign relations with African nations, especially ones with large
scale Indian diaspora. Countries like Tanzania and Kenya, started to receive aid in the form
of ITEC as early as 1965, but the amount offered by India still remained relatively low as
compared to other donor nations.
19
The paradigm shift in Africa in the early 1990s, from one of ‘hopelessness’ to that of
‘hopefullness’xxviii
reinvigorated India’s interests in the region. Moreover, rapid economic
growth in India, positioned it to become a more significant and useful player in the
development assistance sphere, especially that in Africa, where the contributors of fast paced
development, as experienced by China and India were needed drastically. As African nations
being to stabilize their political and social environments and take stock of the economic
opportunities and potentials of the region, countries like India and China have been eager and
quick to respond in aiding the transition of Africa as the next economic destination of the
world.
This is not to say that India’s intentions have been completely altruistic. The vast resources
available in the African continent, shared amongst its various nations, make the region very
attractive for countries like India and China, which are strapped for both resources and
materials to continue their own domestic development agenda. But in order to tap these
resources, India much like its neighbour China has realized the African nations- wary of
exploitation as experienced by their interaction with developed countries- not only require
strong rooted relations but also countries that can help them develop their assets. It is this and
the non-conditionality in assistance provided by both India and China, that has allowed the
two countries to be able to penetrate various African markets and systems with relative ease
as compared to other donor nations.
India in its efforts has employed all three of its ODA strategies in order to gain better G2G
relations with African countries. As described earlier, India’s three strategies are (i) Grants
and Loans; (ii) ITEC (iii) LOCs. While some of the strategies have overlapped in the past,
there is a clear chronological order in the employment of these strategies. There are sub-
strategies within these overall strategies that have also been employed in the region.
Indian ODA Strategies in Africa
Grants and Loans
Historically, the Grants and Loans strategy of the Indian ODA program was the first and
foremost method used by the Indian government to offer assistance to foreign nations.
Nations in dire need of resources to mitigate financial distress and strain have often used this
facet of the Indian ODA program. Grants and Loans have also been extended to countries
facing natural, climatic or social disasters, for relief efforts and rehabilitation in the wake of
unforeseen crisis.
20
India’s engagement with Africa did not start with Grants and Loans like it may have for
countries in South Asia itself, but has continued to increase since its inception in the 1990s.
Also unlike other countries in South Asia, India’s extension of financial assistance to African
countries has been Grant based aid rather than through loans. As shown by the budget records
of the Indian government, India has not extended any loans to any of the African nations
since the start.
Figure 5: Grant Amount to African Countries by India
Source: Union Budget 1997-2015
In 1996-97, India grant assistance to African nations was a mere 1.3 million dollars. Grant
amounts preceding 96-97 either do not exist as they were not made, or are two small to be
shown. Moreover, data for years prior to this is not available or has not been digitally
recorded.
The percentage of Grants committed to Africa has consistently remained small in the overall
ODA scheme of giving grants and loans, even though India gives grants to 47 out of the 54
recognized African nations. In fact, grants given to African nations only constitutes 4 percent
of the annual grant budget on average between the years 2001 and 2014. India has though
supported various programs through its Grant strategy. In 2009 India committed USD 125
million for a pan-African grant that improves the healthcare system, education and
telecommunications of various African nations under the programxxix
. The rather large grant
provides Indian educational specialists and medical practitioners direct linkages through
0.0
10.0
20.0
30.0
40.0
50.0
60.0
1997-98 2000-01 2005-06 2010-11 2011-12 2012-13 2013-14 2014-15
US
D M
illi
on
s
Grant Amount to African Countries by India
Grants
21
telecommunication technology to their counterparts in various African nations and provides
technical assistance and knowledge sharing to their partners.
Figure 6: Sectorial Distribution of Grants to African Nations
Source: IDCR
Indian Technical and Economic Cooperation
The ITEC program was perhaps the first developmental assistance tool offered by India to
African nations. Post Indira Gandhi’s visit in 1964, what was called Indira’s Safari, the
Indian government extended their newly created ITEC program to the various strategically
selected countries in Africa. The primary selection criteria had been areas of large number in
Indian diaspora, but the criteria since then has changed drastically.
Under the ITEC program, India launched the Special Commonwealth African Assistance
Program (SCAAP). The SCAAP, a corollary to the ITEC program has been instrumental in
extending and expanding the scope of the program in Africa. Both ITEC and SCAAP aim to
extend technical assistance in areas such as:
a) Training of Civil and Military Personnel
IT/ITES, 27.57
Multisector, 21.31
Social Welfare,
0.27 Trade, 0.57 Transport, 1.92 Water, 0.26 Agriculture, 1.33
Banking and Finance, 1.77
Education, 21.06
Emergency, 1.28
Energy, 1.45
Govt + Admin, 12.95
Healthcare, 3.39 Industry , 5.05
Percentage of Grants to African Nations by Sector 2013-14
22
b) Project and project related assistance, as in feasibility studies, consultancy services
and equipment
c) Deputation of experts in fields such as education, healthcare, infrastructure
development, government and administration and other social topics
d) Study visits of senior officials/decision and policy makers to India to learn from their
counterparts and available institutions.
Africa has been the largest recipient of the ITEC program. Approximately 40 percent of all
ITEC activities in 2013-14 were to African nations, nearly double that of South Asia (19
percent) or South East Asia (14 percent). The ITEC program in Africa covers a vast array of
topics and issues, including healthcare, IT/ITES, education, civil training, engineering and
military technical education as well. The Indian Army, under the aegis of the ITEC program
has led training programs of military officer and personnel in a number of African nations.
India has focused primarily on the Anglophone African nations and from 1990-2001, had
trained nearly 800 officers from countries like Botswana, Burkina Faso, Ghana, Kenya,
Mauritius, Nigeria, Senegal, Madagascar, Seychelles, South Africa, Tanzania and Ugandaxxx
.
Under the program, taught in some of the better established military universities in India,
topic include defence and logistics management, security and strategic studies, mechanical
and maritime engineering, anti-marine, artillery and electronic warfare etc.
Since its inception in 1964, over USD 2 billion have been spent on the ITEC program of
which nearly USD 1 billion have been spent on technical assistance and economic
cooperation to African nations. The most favoured aspect of the ITEC program in Africa has
been its feasibility and consultancy services, especially in the agricultural sector, which also
includes pilot projects and sharing of technology and expertise. Some of the notable projects
under the ITEC in Africa are:xxxi
Entrepreneurial Training and Demonstration Centre in Senegal (June 2000)
Plastic Technology Demonstration Centre in Namibia
Development of Small Scale Industries (SSI) in Nigeria, Senegal, Zimbabwe,
Tanzania, Uganda, Kenya, Ghana and Ethiopia (1994)
Dairy Development and Incense Stick projects in Senegal
Feasibility studies for establishment of poultry vaccine laboratory in Mali
Feasibility Study for improvement of education system in South Africa
23
Pan-Africa E-network in healthcare (in conjunction with the USD 125 million grant
given for this project)
Over the years India has trained close to 14500 civil servants and engineers from some of the
African nations. In 2010, it increase its available positions for Africans in the program from
537 in 2003, to 998. In 2011, India also committed to providing 22,000 scholarships of
African civil servants seeking training. xxxii
The attractiveness of the ITEC program is its objective of ‘knowledge sharing’ in order to
promote sustainable development and create partnership for mutual benefitxxxiii
. It is attractive
also because it refuses to use the words donor and recipient in its promotion nor does it have
neo-imperialistic conditionalities that western programs are well known for. The low cost of
training involved in the ITEC program, which was averaged at just USD 2800 per student in
2013, is far lower than the cost involved in having the same program in countries like the
United Kingdom or the United States. Moreover, as the ITEC program is conducted in
national Indian universities where costs of these programs are highly subsidized and
consequently much cheaper than any such program around the world. Estimates suggest that
same program in the UK would cost nearly ten times the amount in costs Indiaxxxiv
.
Lines of Credit (LOCs)
The Lines of Credit program of the Indian Official Development Assistance is perhaps one of
its most successful strategies, especially in regard to the African region. Started in 2004 under
India Development Initiative, the Lines of Credit program is a means of financing
development projects through credit facilities offered by the Indian government through its
Export-Import Bank (EXIM).
The unique characteristic of this development assistance strategy is that unlike conventional
forms of aid, grants and loans, these credit lines are offered to countries who request for them
for a particular project. While the project viability and optimality have to be approved by
Indian authorities, the Ministry of External Affairs, the Ministry of Finance and the EXIM
Bank itself, the disbursement of the credit and resources are on the discretion of the recipient
rather than of the donor. Lines of Credit are completely demand driven and are only offered if
requested through diplomatic or commercial channels.
The LOCs have been designed in a manner that satisfies four key criteria or objectives.
1. Providing Demand Driven loans
24
2. Sharing best practices and experiences of India in enhancing development processes
in recipient country
3. Allowing India’s entrance into partnerships with developing countries by providing
loans at concessional rates
4. Enhancing India’s exports by tying the loan to supplied credit for specific projects
which require equipment and servicesxxxv
In the African context, LOCs are the most successful and most sought after development
assistance strategy employed by the India ODA program. Offered at low concessional rates,
LOCs provide recipient countries with an alternative means of financing their development
projects while allowing India to create public and private sector opportunities in untapped
markets.
Figure 7: Evolution of Geographical Distribution of Indian LOCs 2004-2016
Source: Compilation of Data from Soni and LaL, ORF and IDCR, CPR.
Unlike the other strategies of grants and ITEC, where assistance is usually cost or
conditionality free, LOC on the other hand are considered ‘tied’ assistance. One of the main
requirements of Lines of Credit is that goods and services used in the implementation of the
project must be procured from Indian suppliers, giving Indian private and public players entry
into the foreign market. Yet, LOC are still considered far less demanding than traditional
donor conditionalities and are often seen as a mutually beneficial means of development
cooperation.
0 10 20 30 40 50 60 70 80
Europe + CIS
Oceania
Asia
Aemricas
Africa
Percentage of Total LoCs
Reg
ion
Geographical Distribution of LOCs 2004-2016
2004-05 2010-11 2015-16
25
The LOC program has been focusing on certain key industries and sectors in Africa, but is
not limited to any fixed number. The sectors currently where LOCs are employed include
telecommunications, healthcare, infrastructure development, pharmaceutical, small and large
industry and agriculture. LOCs are also not limited by size, wherein government can request
for smaller loan amounts for smaller scale projects and if approved by the Indian government,
are as important as some of the large scale projects under the LOC program.
The importance of Africa in the LOC program is illustrated best by the rapid increase in LOC
projects in the region over the years. As of 2015, 70 percent of Indian LOCs have been
extended to African countries. Out of the 197 total LOCs offered by the Indian Government,
142 are in Africa totalling approximately, USD 8.1 billion out of the USD 11.6 billion
extendedxxxvi
. The list of all African countries to which LOCs have been extended are
provided below. India does not have any LOC projects with the missing 6 countries.
Table 2: African Countries with Active LOCs from India 2013-14
African Countries with Active LOCs From India 2013-14 xxxvii
1. Burkina
Faso 12. Djibouti 23. Liberia 34.Nigeria 45. Zambia
2. Burundi 13. Somalia 24.Lesotho 34.Rwanda 46.
Zimbabwe
3. Benin 14. Egypt 25.Madagascar 36. Sierra
Leone 47. R. Congo
4. Botswana 15. Eritrea 26.Malawi 37. Senegal 48. Angola
5. Cameroon 16. Ethiopia 27.Mali 38. Seychelles
6. Cape Verde 17. Gambia 28.Mauritius 39. Sudan
7. Chad 18. Gabon 29.Mauritania 40. Swaziland
8. Cen. Afr.
Rep
19. Guinea
Bissau 30.Morocco 41. Tanzania
9. Comoros 20. Guinea 31.Mozambique 42. Togo
10. D R Congo 21. Ghana 32.Namibia 43. Tunisia
11. Cote d'Ivoire 22. Kenya 33.Niger 44. Uganda
Source: Development and Diplomacy through Lines of Credit. ORF
Some of the key ongoing projects under the Indian LOC program in Africa include:
26
Infrastructure development for powered generation and farm mechanization in
Burundi, Lesotho and Tanzania
Electrification of both rural and urban areas as well as irrigation projects in
Mozambique
Cement making industry in Djibouti
Ethiopian sugar industry and railway industry
Power transmission in Kenya
The LOC program has be heralded as one of India’s flagship strategies in expanding its
geopolitical footprint in Africa. While some critics may call this type of development
assistance neo-mercantilism or neo-colonialism, the attractiveness of this program over the
traditional Development Assistance Committee aid has proven not only its effectiveness but
also its acceptability in a region distrusting of foreign influences. Furthermore, as the
extended loan funds are raised from the international debt markets, they do not strain the
Indian fiscal balance. At very concessional rates, long maturity and moratorium periods and
high grant elements, these financial alternatives are a cost effective means for both recipient
country and for India. Moreover, as repayment of the loan is guaranteed by the recipient
government and counter guaranteed by the Indian government, these lines of credit are a safe
and secure way for developing countries to borrow to fulfil developmental agendas. Where
traditional DAC aid was severely affected by the Global Financial Crisis (GFC) in 2008, this
form of non-DAC, non-traditional aid has been instrumental in filling the gap left by
traditional donors.
Table 3: LOC Criteria, Rate of Interest, Maturity, Moratorium and Grant Element
Heavily
Indebted/Poor
Countries
Low Income
Countries/ LDCs
Middle Income
Countries
Rate of Interest 1.75% 2% Libor + 0.5%
Maturity 20 yrs. 10 yrs. 8 yrs.
Moratorium 5 yrs. 3 yrs. 2 yrs.
Grant Element 56.4 37.3 34.4
Source: Development and Diplomacy through Lines of Credit. ORF
27
The grant element component has been calculated as per the OECD formula using the value
of 0.60 LIBOR (6-months, US$). Source: Exim Bank
Sub Strategies of India ODA program in Africa
Debt Relief
While there is a lack of data available for this sub strategy, India does provide debt relief to
highly indebted countries. In the past, India has extended approximately USD 37 million for
debt relief purposesxxxviii
. These resources are a sub category of the Grants program under the
overarching ODA program and are for short-term economic relief for countries suffering
from grave economic stress and strain. India recognizes that aid given to certain sectors,
especially social sectors require very long periods for returns on investment and thus
advocates grants in the form of debt relief rather than concessional loans. Moreover, debt
relief provided by India allows African nations to regain financial stability and once again be
in a position to borrow from the international marketsxxxix
. India’s debt relief has helped five
countries in the African region, these are: Ghana, Mozambique, Uganda, Tanzania and
Zambiaxl
.
Export-Import Incentives
Another aspect of India’s development cooperation is routed through its trade with African
nations. Over the last decade, India’s trade with Africa has grown significantly, jumping 280
percent between 1990 and 2001 and a further 32 percent between 2005 and 2011. In 2012,
India trade with African nations stood at approximately USD 70 billion and rose to USD 80
billion in 2014. It is expected to cross the USD 100 billion mark by the end of fiscal year
2015-16.
In order to facilitate trade and economic cooperation between India and African nations, India
has employed two sub strategies as part of its development cooperation with the region. First,
India offers export subsidies to its own industry that is willing to operate in certain African
countries. India offers concessions for exporters given the volatile financial environment of
these African nations as to compensate for any shortcoming by exporting to these nations.
And second, India has created numerous incentives for importing good from African nations,
to help boost the export markets of Less Developed Countries, whose limited export base
may not find attraction in many foreign market. For this, India has launched the Duty Free
Tariff Preference Scheme which “unilaterally provides preferential market access for exports
28
of 50 LDC countries, 34 of which are in Africaxli
”. The DFTP is structured in a way that it
offers favourable tariff structures that are advantageous to the export strength of the LDC
country. While some products from certain African nations fall under India’s exclusion list,
many products from these nations are in demand in India and foresee greater volumes of
imports in the years to come.
India-Africa Forum
Since 2008, the Ministry of External Affairs of the Government of India and its African
partners and counterparts have held the India-Africa Forum Summit. The summit is held
every three years, alternating between New Delhi and Addis Ababa and bring together
representatives from various governments, industry, academia and other related and
peripheral sectors. The aim of the forum is to provide an open discussion on numerous
common issues, exchange of ideas and practices, interaction between industries and
corporates and a joint development strategy between the African continent and India.
The original themes of the summit, held in 2008, were: (i) Agriculture (ii) Trade (iii) Industry
and Investment (iv) Peace and Security (v) Promotion of good governance and civil society
(vi) Information and Communication technology. While the original themes of the interaction
have remained relatively constant over the years, additional themes such as environmental
protection, representation in multilateral organizations and economic diplomacy have been
incorporated to reflect the evolving mutual relationship.
The third summit was to be held in 2014, but due to Indian general elections was moved to
2015. The very successful summit drew all 54 nations from the African union, representative
of other international governments and organizations and the representatives from African
Union and Afro-centric bodies. As part of the summit, India announced extension of LOCs of
up to USD 10 billion and additional funds in the amount of USD 710 million as grant
assistance and funds for the India-Africa Development program. 41 leaders of African
nations attended the summit held in October-November of 2015.
Importance of India’s African Development Cooperation
India has carved out a niche for itself in the overall international aid architecture vis-à-vis
Africa. Using its advantage of having historical ties with the region, especially in regard to its
vastly spread diaspora, India has capitalized in areas where traditional donors have not had
much success.
29
India has done this by first recognizing that it is not in the league of the DAC donors which
have provided aid to the amount of USD 404 billion to Africa over the last 20 years and that
it cannot provide such amounts given its own nascence as a global economic power. Second,
India has maintained a non-interfering role in providing aid, segregating political relations
and development cooperation into to mutually exclusive spheres. By doing so, India has not
only not interfered in internal politics of recipient countries but refrained from making any
judgements on the nature of governmental setup in any of these nations. The Indian ODA
program does not differentiate, unlike traditional donors, between democratic and non-
democratic nations. “For example, 60 percent of Indian LOCs in Africa are given to countries
with authoritarian regimesxlii
”. Third, India’s development cooperation program has
consistently maintained its ethos of creating mutually beneficial partnerships and has not
hidden its agenda of creating commercial and bilateral ties between itself and the recipient
country. Fourth, the demand driven ideology behind India’s ODA program separates it from
other donors as it makes the recipient nation an equal shareholder in not only the process of
development cooperation but the implementation of the projects themselves. It puts the onus
on the recipient nation, rather than strictly defining objectives and goals of resources as is
done by many of the IFIs and DAC donors. Finally, the Indian ODA program fills the gap,
especially in regard to training and capacity building, left by the two spheres of International
aid in Africa, i.e. China and its focus on infrastructure development aid and traditional donors
that tend to focus on social issues. By doing so, India’s ODA program is not only unique but
has become vital for countries that need resources for programs and development goals not
covered by the rest.
30
Chapter 3: Japan’s ODA Program and Strategies in Africa
Japan’s Official Development Assistance Program
Japan has been an active player in the development cooperation sphere for more than 60
years as of 2014. The ODA program which started as early as 1954, only nine years post the
Second World War, has witnessed Japan extend more than USD 221 billion towards various
issues affecting the entire globe. Even from the start, Japan has maintained a leadership role
in actively supporting development assistance for the developing world, being the only Asian
supplier of aid until joined by countries like China, India and South Korea in more recent
years. Japan has been one of the key examples of what and how an ODA program should
develop, function as a catalyst for mutual benefit and change across the planet.
Japan started its ODA program as reparations for its Asian neighbours that were affected by
its role in World War II. Primary resources went to east and south East Asia in a bid to
reconstruct the region after five years of war. Japan at the same time also joined the Colombo
plan of 1950 for cooperation on economic development in Asia and Pacific. Yet, Japan did
not officially become part of the donor club until the 1960s. In 1960, Japan joined the
Development Assistance Committee (DAC), though it was only known as the DAC post 1963,
and soon after the Organization of Economic Cooperation and Development (OECD). The
membership in the OECD not only established Japan as the only ‘developed’ Asian economy,
but cemented its place among the inner sanctum of the international aid architecture.
The Japanese aid program remained relatively small in the 1960s regardless of its
membership into DAC and OECD. In that decade, Japan spent approximately USD 269
million on aid activitiesxliii
. The ODA program grew by the 1970s increasing to USD 5.8
billion in 1973. By 1974, Japan was the largest DAC donor and continued to increase its
budgetary allocation for aid well into the 2000s. By 1997 Japan’s aid portfolio had reached
USD 9.36 billion, by 2000 it was closer to USD 13.4 billion and now hovers in the region of
USD 22.3 billion as of 2014xlivxlv
. At its highest in the 1980s when Japan was the largest aid
donor in the world, its ODA share in Gross National Income (GNI) was as high 0.30 percent.
It stands at 0.23 percent of GNI in 2014xlvi
.
There have been three phases in the timeline of Japan’s ODA program. Each phase is marked
by either significant policy reform or changed view in world perspective of the Japanese
government. Some argue that Japan’s ODA timeline is best described by its own domestic
31
interests rather than the need of the world but others have shown how Japan has moulded its
program to suit the needs of the time and situation.
The first phase of the Japanese ODA program started with its inception in 1954 and ended
with the establishment of the Japan International Cooperation Agency (JICA) in 1974,
immediately post the first oil crisis. The purpose behind Japanese ODA at the time was to
promote Japan’s export sector and expand its trade base especially around Asia. The program
tied together its aid schemes and initiatives, its reparation program and its economic
production, such that it could aid Asia as well as broaden its market base across the region.
The second phase of the ODA program began in 1976 and ended in 1992 with the
formalization of the ODA charter. The importance of the second period in the ODA program
is illustrated best by Japan’s shift in policy from expanding its export base to tying
international economic policy with Japan’s security agenda. While it is true that Japan’s shift
in policy was a result of the economic shocks to hit the global system in the 1970s (i.e. Nixon
shocks and the Oil crisis), the reason for the shift in ODA policy is highly debated. While the
government and its supporters claim that ODA policies were shifted for Japan to take a more
responsible role in the wake of global economic and financial distress, critics argue that it
was Japans realization that it need (i) to secure itself from its dependence on foreign energy
and (ii) that it needed to secure its position in Asia itself by allying with similarly minded
countries and governments in the region. With reparations ending, Japan’s ODA policy
changed from what it ‘owed’ to what it could ‘garner’. According to a paper by W. Jingru on
Japan’s ODA to China, Japan’s policy shift in second phase of its program was a result of
three major changes.
First, Japan expanded its ODA program from Asia to other regions as well, which now
included Europe, Latin America and party of Africa. This expansion perhaps plays into the
energy security aspect of the new Japanese policy where the Japanese government was
actively looking to secure its energy sources to mitigate any ill-effects of any future energy
crisis. Second, Japan initiated the linking of its international economic policy with its
international political ideology. This was done to secure its neighbourhood and relations with
friendly nations in the region. Third and last, Japan tied its international aid and economic
policy to the “established but continually evolving concept of comprehensive Japanese
security”xlvii
.
32
The third phase of Japan’s ODA program has been in effect since 1992. In 1992, Japan
organized its ODA activities under the ODA charter, which formally outlined its
development assistance policies. By this time, Japan had stripped the United States of its
position as the leader in global aid, a position it would continue to hold until the mid-2000s
and was accepting its responsibility as a global shaper and leader. While the government calls
this period its shift towards ‘embracing human security’xlviii
analysis of the ODA program
show Japans leaning towards becoming a more traditional donor than non-traditional as it
was in its second period. Reviewers of the program argue that it is in this phase that Japan has
begun to act as a developed nation, tying economic aid, grants and loans to dictate policy in
recipient countries. Post the 1992 change in ideology, Japan’s ODA program began the use of
‘aid sanctions’ which in essence forced political ideology on others as traditional DAC donor
such as the United States and UK had done in the past in other regions. Also, Japan’s aid has
become more tied to conditionalities and economic and commercial interests than in previous
phases of the program. By 2002, Japan had used negative aid sanctions in 16 countries in the
hopes of affecting policy change in the recipient nationsxlix
.
33
Structure of the ODA program
Figure 8: Governmental Set-up of Japanese ODA Program
Source: JICA Annual Report 2014
Jap
an O
DA
Pro
gram
Bilateral
Technical Coop Technical Coop Projects
Trng Participants
Experts
Equipment
Loan Aid
ODA Loan
Pvt Sec Investment Finance
Grant Aid
Economic Development
Aid for Food
Others Volunteers
Disaster Relief Multilateral
34
Like many of the traditional and non-traditional ODA programs, the Japanese development
assistance program has its four basic pillars. These are loan aid; grant aid; technical
cooperation and others. As this paper focuses primarily on bilateral aid and not multilateral
aid, it will not be discussed in detail. Japan is a very active players in the multilateral sphere
on global aid, not only participating in regional bloc and associations but being in leadership
positions in a few, including World Bank, IMF and the Asian Development Bank.
Gross ODA
Gross ODA of Japan consists of bilateral aid and financing multilateral institutions and IFIs.
While bilateral aid consists of Grant aid and ODA loans, multilateral financing is of a
category of its own. Each of the bilateral sub categories are further divided into smaller
categories such as debt relief and technical cooperation in Grant Aid, and loans provided,
repaid and ODA credits for the ODA loan programs.
Japanese ODA as shown earlier has been a significant contributor to global aid and has
consistently been rising over the years. While the difference between years in terms of
growth may vary due to the prevailing economic environment in Japan, commitment to the
ODA program remains healthy regardless of outside factors including situations like the
Global Financial Crisis (GFC).
Figure 9: Gross Japanese ODA
Source: Compilation of data from Annual Reports, JICA.
9295.49 8929.8
11795.09
17596.73 18986.54 18602.61
22763.8
0
5000
10000
15000
20000
25000
2002 2004 2006 2008 2010 2012 2013
US
D M
illi
on
s
Gross ODA
35
By 2002, ODA from Japan was already hitting the USD 9 billion mark and has risen to close
to USD 22 billion in the last year. Yet, in terms of its share in the overall Gross National
Income (GNI), it has remained relatively small, averaging at around 0.21 per cent of total
GNI over the years. The highest the ODA program has achieved was 0.25 per cent in 2006
and the lowest in recent history in 2012, when ODA share was just 0.17 per cent of GNI. This
is well below the UN prescribed ODA to GNI ratio, which requires developed countries to set
aside at least 0.7 per cent.
Figure 10: ODA as Percentage of GNI
Source: World Bank Database of Statistics
Grant Aid
lAs per JICA, Grant Aid is “a method of assistance that provides necessary funds to promote
socioeconomic development”li
. Grant aid is completely obligation free, as in recipient
countries do not have to return grant aid at the end of the project cycle. The primary focus for
this aid strategy is the development of economic infrastructure and promotion of key socio
sector issues that improve the overall living standard of the recipient country. The resources
are often used for infrastructure development such as hospitals, roads, and schools and are
also given to programs such as education, healthcare, HIV/AIDS prevention etc. Grant aid is
further divided into more specific categories that include aid for general projects, non-project
aid, grassroots human security projects, NGO assistance projects, disaster prevention, food
aid, emergencies, climate change and debt relief. Over the years, grant aid has been one of the
0
0.05
0.1
0.15
0.2
0.25
0.3
2002 2004 2006 2008 2010 2012 2013
Pe
rce
nta
ge
Percentage of GNI
36
few methods within the ODA program to remain relatively positive, in terms of increasing
every year. Slight fluctuations, due to the prevailing economic environment of Japan, have
caused marginal decreases in some years, but the general trend of grant aid remains
increasing.
Figure 11: Total Grant Aid from Japan
Source: Compilation of data from Annual Reports, JICA.
a) Debt Relief
Debt relief is a sub strategy within grant aid. While many other countries have subscribed to
the belief that debt relief of poor countries is an important tool to spur economic growth and
help recovery of the economic system of a country, the popular sentiment among Japanese
scholars and policymakers has been quite the opposite. For a large portion of Japanese ODA
history, Japan refrained from providing debt relief to countries on the premise that giving
money or forgiving debt of countries allows them to borrow heavily again, knowing that in
the worst circumstance, a bailout by foreign donors is available. The perception further
dictates that Highly Indebted Poor Countries (HIPC), whose debt is cancelled, will continue
to borrow and create similar economic situations, without structural and fiscal changes. In
trying to maintain a non-interference role, the Japanese ODA program for a long time
refrained from providing debt relief too many HIPC. Though the origins of debt relief in
Japanese ODA history are not known, albeit Japan’s clearance of Iraqi debt in 2005, JICA
only started using debt relief as a separate category within Grant aid post 2008. This sub
0
2000
4000
6000
8000
10000
12000
2002 2004 2006 2008 2010 2012 2013
US
D M
illi
on
s
Total Grant Aid
37
strategy of aid has been the most fluctuating form of assistance the Japan has provided, with
years with very high disbursements to years with near minimal disbursements.
Figure 12: Total Debt Relief from Japan
Source: Compilation of data from Annual Reports, JICA.
As shown in the above graph, debt relief has fluctuated massively since JICA started its
reporting of debt relief in 2008. In the year 2009, debt relief stood at USD 68.3 million,
falling further to USD 20.88 million in 2010. Though a slight rise in 2011 saw the
disbursement of debt relief rise to USD 1.4 billion, it fell again drastically to only USD 4.69
million in 2012. Since then debt relief has increased again but no trend can be applied to
understand what is to come in later years. Elements in the Japanese government are still wary
of the effectiveness of the debt relief program, which is evident in the fluctuating years.
ODA Loans
Like any other commercial bank loans, the Japanese ODA program also provides loans to
recipient countries for the development needs. Provided at very low interest rates, with long
grace periods and repayment periods, the loans provide funds in larger amounts than what
would be possible through both technical cooperation and grant aid. This form of aid has
been utilized consistently in the development of large-scale projects especially those in the
infrastructure sector. Developing countries require heavy sums of capital for necessary
development and ODA loans provide them with such funds under long-terms, substantially
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2008 2009 2010 2011 2012 2013
US
D M
illi
on
s
Debt Relief
38
low interest rates. The repayment period can be as high as 40 years for certain countries and
lowest of 25 years for others. Grace period, the time since utilization of funds until interest
rate starts to apply, is often 10 years in most cases barring exception in a few cases where the
grace period is only 7 years.
Table 4: Terms and Conditions of Yen Loans
GNI Per
Capita Terms
Interest
Rate
Repayment
Years
Grace
Period Yrs.
Least
Developed
Countries
(Lowest)
Lowest
Income
countries - 0.01% 40 10
Least
Developed
countries
Low
income
General 0.70% 30 10
Preferential 0.01% 40 10
Low Income
Countries
Less the
USD 1045
General 1.20% 30 10
Preferential 0.25% 40 10
Lower Middle
Income
Countries
USD 1046-
1985
General 1.40% 30 10
Preferential 0.30% 40 10
Middle
Income
Countries
USD 1986-
4125
General 1.40% 25 7
Preferential 0.30% 40 10
Upper-Middle
Income
Countries
USD 4126-
7184
General 1.70% 25 7
Preferential 0.60% 40 10
Uppermost
Middle-
Income
Countries
USD 7185-
12745
General
JPY LIBOR
+ 20BP 25 7
Preferential
JPY LIBOR
+ 95BP 30 10
Source: JICA, terms and conditions for Loans
39
The countries eligibility is decided by its GNI per capita, which also dictates the interest rate
level, repayment period and grace period of the loan. The ODA program also has different
loans for different sectors. ‘General’ termed loans are resources borrowed for mostly all
projects other than those on the ‘Preferential’ termed list. The ‘preferential’ loans include
loans for Global Environment and Climate Change, Health and Medical Care Services,
Disaster Prevention and Reduction, Human Resource Development. Preferential loans always
are at a lower interest rate than general termed loans and also have longer repayment and
grace periods. It must be noted that for Lowest Income Countries in the Lease Development
Countries (LDC) category, all loans, regardless of general or preferential and for any sector
have the lowest interest rate of 0.01%, a repayment period of 40 years and grace period of 10
years.
Figure 13: Total ODA Yen Loans from Japan
Source: Compilation of Data using Annual Reports, JICA.
ODA loan program has been one of the fundamental pillars for the Japanese aid program over
the years. Japan’s loan share in total aid has been highest amongst the other DAC donor
countries and is a reason due to which the grant component of Japanese ODA has always
been limited. Nearly half of the total ODA provided by Japan has been in the form of
concessional yen loans, while technical cooperation is around a third and grant aid covers the
rest. The loan program itself is further divided into three modes of lending. First project loans,
which is the most widely used form of lending continues to this datelii
. Most of these loans
are given for infra development. The second category is Commodity Loans that have been
rarely used since the late 1980s. Finally Program Loans are only used very selectively, for
0
2000
4000
6000
8000
10000
12000
2002 2004 2006 2008 2010 2012 2013
US
D M
illi
on
s
ODA Loans
Loans Provided
Loans Repaid
40
very specific projectsliii
. The success of the ODA loan program in supporting economic
development of countries is best evidenced by its impact on Southeast Asian countries. Many
of the recipient countries in South East Asia have since ‘graduated’ the ODA loan eligibility
requirements and are currently paying back large amounts of their remaining loansliv
. This is
further evident through JICA records, which show that loan repayment has been relatively
higher for the last decade and half than loan payments and disbursements. The importance of
this positive balance is even more crucial as loan aid is financed by Japan’s own national
saving schemes such as postal, social and security savings. A positive balance maintains
Japan’s continued ability to provide larger amounts in loans, considering a negative balance
would potentially harm the social security nets for Japanese citizens and thus dismantle the
political will towards ODA lending altogether. Loan disbursement is handled by the Japan
Bank for International Cooperation (JBIC).
Technical Cooperation
Like other technical cooperation strategy of other ODA programs across the world, Japan’s
technical cooperation strategy draws from Japan’s technology, knowledge base and
experiences to help recipient countries in providing expertise, know-how and training to
solve developmental issues affecting that country. Often in conjunction with other partner
countries, Japanese technical cooperation provides necessary training to “nurture the human
resources who will promote socioeconomic development in developing countries”lv
.
Technical cooperation aims to provide local suitable solutions to develop and improve
technology that is adaptable and sustainable for actual circumstance in these developing
countries. Technical cooperation also aims to increase the level of technology and helps set
up institutional frameworks that help recipient countries improve problem-solving capacities
as well as achieve economic growthlvi
.
The ethos of the Japanese technical cooperation strategy is to enable countries to achieve
economic growth through their own ‘self-effort’ rather than spoon-feeding them as other aid
programs do. To do this, Japan dispatches experts, provides the necessary equipment and
material and sends out its Japan Overseas Cooperation Volunteers (JOCV). It also helps in
training of technicians, bureaucrats and other policymakers that can have an impact on the
economic environment of the partner country.
As a share of total ODA, technical cooperation has remained relatively stable along the years.
Where grant aid has grown by 17 per cent since 2002 and loan disbursements by 11.3 per
41
cent, technical cooperation has increased gradually, at an average of 5.2 per cent every year.
Unlike other forms of aid, technical cooperation has not fluctuated over the years either, with
rises and falls that often balance each other out. As per JICAs statistical data, technical
cooperation has generally ranged between USD 2.5 billion to USD 3.5 billion in the last
decade.
Figure 14: Technical Cooperation from Japan
Source: Compilation of data using Annual Reports, JICA.
While these three are the broad categories of aid the Japan provides through its ODA
program, it also has programs of economic development assistance, food aid and disaster
relief and rehabilitation. Some of these strategies will be discussed more specifically as part
of the Japanese ODA strategies employed in Africa.
Japanese ODA Strategies and Sub-Strategies in Africa
Most historians and researchers alike argue that Japanese ODA into Africa has five stages,
starting as early as 1954, which was the year when Japanese ODA itself began. The problem
with this theory though is that Japanese ODA was Asia centric, focusing on development of
Asian countries, where in 98 per cent of total aid from Japan from 1954-1973 was directed
towards Asia. Less than 2 per centlvii
, and in some estimates, less than 1 per cent of ODA was
directed towards African countries.
Nevertheless, accepting available literature, Japanese ODA’s first stage in Africa was
primarily focused in providing aid in exchange for an expanded export market and to secure
important resources for the Japanese economylviii
. Japanese ODA into Africa started with the
0
500
1000
1500
2000
2500
3000
3500
4000
2002 2004 2006 2008 2010 2012 2013
US
D M
illi
on
s
Technical Cooperation
42
first loans being given to Uganda (1966), Nigeria (1966) and Tanzania (1966). Japanese
presence in Africa was on the rise, with various openings of Japanese embassies in the
regionlix
, re-establishing trade and cultural links that had been severed during the years of the
Second World War. Yet Africa remained relatively small in overall Japanese aid, constituting
only 1.1 per cent by 1969.
It was the realization of the volatility and vulnerability of global financial system, especially
that of the global energy and oil framework post the 1973 and 1979 oil crisis, that Japanese
interests in Africa saw a sudden rise and the start of the second stage in Japanese ODA. In
trying to protect itself from resource dependency on countries like those governing the
Organization of Petroleum Exporting Countries (OPEC), Japan increased its aid program and
interaction with resource rich African nations. Japanese ODA to Africa rose to approximately
9 per cent, focused primarily on infrastructure development of countries which Japan
believed were not only resource rich but had the precursors for stable economic development.
The post oil crisis drought that affected Africa in 1973-74 also saw Japanese aid foray into
agricultural assistancelx
for the region.
The rapid economic growth of the 1980s in Japan saw the emergence of calls for Japan to
take a share in the responsibility to develop and give back to the rest of the world. Pressured
by other DAC members, Japan was asked to become a more responsible global player by
extending and expanding its ODA program especially its grant aid. This marked the
beginning of the third stage of Japanese aid to Africa, one that is evident by the very rapid
increase in ODA to the region. Lasting from 1980 to 1988, Japan recycled its economic
surplus by becoming a bigger global contributor. Japanese ODA became increasingly
important in areas like food and emergency relief as well as trade and investment. Even in
this stage Japanese aid had no political leanings in its extension and disbursement, offering
aid to various countries including apartheid South Africa. Japan justified its extension to
South Africa by providing similar volumes of aid to other African countries in the region.
Africa became one of the pillars of the Japanese aid program during this time.
In the period post 1989, Japan became the largest donor among the DAC countries to the
African region. The fourth stage of Japanese ODA into Japan, which lasted till the year 2000,
gave impetus to the emergence of dedicated aid program to Africa like the Tokyo
International Conference on African Development (TICAD) in 1993. Japan had surpassed
United States as the lead donor to the region and began investing in research and
43
development of strategies that would aim to develop Africa through not only collaborative
schemes and plans but through adaptable and sustainable strategies.
Japan is currently in its fifth stage of its ODA program in Africa. While old strategies such as
Yen Loans (loan aid), grant aid and technical cooperation have continued to be offered and
implemented, new sub strategies such as debt relief, bilateral or trilateral technical
cooperation and peace and stability have also been employed to develop the region. The
Japanese aid agency JICA now operated in 29 countries and has committed over 1.4 trillion
Yen in the next five years in ODA alone.
Africa’s share in Japanese ODA has been growing since the 1970s. The largest gains of this
region have been in the past few years, where Sub-Saharan Africa’s share in gross
disbursement of ODA has grown from 10.6 per cent in 1990 to nearly 20.1 per cent by 2011.
Figure 15: Geographical Distribution of Gross ODA from Japan
Source: JICA, White Paper on ODA
Grant Aid
Japan extends its three main pillars of ODA to Africa. Its most successful programs by order
are Grant Aid, Technical Cooperation and Loan Aid. Grant aid to Africa has very early
origins, dating as far back to the start of the ODA program to Africa. Mostly in the form of
relief aid, whether for food, debt or disaster (manmade or natural), African countries have
been recipients to these non-obligatory methods for longer than most other regions. For
0% 20% 40% 60% 80% 100%
1990
2007
2010
2011
2012
Percentage of ODA
Ye
ar
Gross ODA Disbursments by Region
Asia
MENA
SSA
LAC
Ocenia
Europe
Mutliple Regions
44
example, Japan has never agreed to the justification of providing debt relief to countries,
claiming it creates dependence and promotes fiscal mismanagement. Yet, debt relief has been
an integral part of Japanese ODA to the African region. Japan’s agricultural assistance
programs to avert the impact of major droughts in the African region have also seen a large
number of grant aid projects being deployed.
In the past few years a transition in grant aid has occurred where in grant aid is now being
more used in infrastructure development than some of the earlier relief efforts. While debt
relief has remained strong, especially for many of the HIPC countries in Africa, grant aid
reserved for relief efforts such as food or disaster has been shifted towards basic
infrastructure development, which included projects such as roads, hospitals, schools and
energy infrastructure. As of 2012, out of the USD 1.16 billion in grant aid disbursed by JICA
and the Ministry of Foreign Affairs (MOFA), 43 per cent has been given to Africa. This is
especially noteworthy as amongst the three pillars of Japanese ODA, only grant aid is a
category in which any other region has matched Asia. As it is well known, Asia has been the
centre of attention for Japanese ODA and most schemes and projects within the Japanese
ODA tend to be focused towards Asia.
Figure 16: Grant Aid by region 2012
Source: JICA
Asia, 43%
Africa, 43%
MENA, 3%
LAC, 3% Others, 8%
Grant Aid by Region 2012
45
Grant aid to Africa from Japan has consistently crossed the USD 1 billion marks even prior to
2007. While dipping down to its lowest in ten years in 2008, due to the Global Financial
Crisis, it has remained among the top donor countries. In 2006, ODA Grants to Africa
totalled nearly USD 3.4 billion.
Figure 17: Japanese Grant Aid to Africa 2007-2013
Source: OECD DAC CRS
The majority of grant aid to Africa is given to the Public Works and Utilities sector, followed
by development of human resources and energy. According to JICA figures, out of the
approximately Y 50 billion disbursed as grant aid to Africa, Y28 billion was provided to
public works and utility projects showing the dominance of infrastructure development in
Japanese ODA grants to Africa.
1837.4
1237.6 1410
1657.1
3009.6
1810.2
2506.9
0
500
1000
1500
2000
2500
3000
3500
2007 2008 2009 2010 2011 2012 2013
US
D M
illi
on
s
ODA Grant to Africa
46
Figure 18: Sectorial Distribution of Grant Aid to Africa 2013
Source: JICA, TICAD Report
A major part of grant aid in more recent years and especially during the fifth stage of the
Japanese ODA program in Africa has been debt relief for HIPCs. In 2005 during the
Gleneagles G8 summit, a joint consensus among the 8 countries was taken to enhance the
debt relief efforts of donor countries to countries heavily indebted in Africa. While Japanese
participation had been reluctant at first, debt relief has become one of their key grant aid
components over time. According to Makoto Sato, in 2012 alone 78.9 per cent of Japanese
ODA to Africa was in the form of debt relief.
Public Works and Utilities, 56.20%
Health and Medical Care,
8.20%
Agriculture, Forestry and
Fisheries, 7.10%
Planning And Admin, 4.50%
Energy, 9.10%
Human Resources, 14.80%
Grant Aid 2013 (Y 50.2 billion)
47
Figure 19: Japanese Debt Relief to Africa
Source: OECD DAC CRS
Immediately post the 2005 Gleneagles summit, Japan contributed nearly USD 2.7 billion
towards debt relief in Africa in 2006. Since then, partly due to the economic environment in
Japan, debt relief to Africa has fluctuated, decreasing to as low as USD 4.6 million in 2012 to
Africa and climbing back to USD 910.6 million in 2013lxi
.
ODA Loans
Japan’s East Asia Development Model, in which it has continued to invest very heavily,
holds Yen loans and ODA loans as one of the primary facets of official development
assistance. Japan has always strongly believed that by providing loans in key areas, primarily
focused on developing country’s infrastructure needs, loans are more an investment rather
than a resource for consumption.
Table 5: Geographical Distribution of ODA Yen Loans 2013
ODA Loans by Region 2013
Asia 80.4%
Africa 5.3%
MENA 7.2%
LAC 1.2%
Europe 5.0%
22.96 84.3
190.1
1446.1
4.6
910.6
0
200
400
600
800
1000
1200
1400
1600
2008 2009 2010 2011 2012 2013
US
D M
illi
on
s
Debt Relief to Africa
48
Others 1.0%
Source: Investor Information, JICA 2013
While Japan has maintained this position for decades in the Asian context, in the African
context, ODA loans from any DAC member country proved to be highly unsuccessful. ODA
loans in Africa tended to further indebt the various economies, coming nowhere close to the
result achieved in Asia. It was for this reason and partly for the pressure by the international
donor community (especially the DAC), that Japan’s original strategy of providing loans to
developing countries had to be drastically changed in Africa. In 2001, 80% of ODA was in
bilateral aid, of which only 27 per cent was in the form of loans and 48 per cent in the form of
grants and technical cooperationlxii
. By 2012, the share of grant aid and technical cooperation
was double that of loans in the Japanese ODA program. Nearly 98.4 per cent of ODA into
Africa is in the form of grants.
As of 2013, the case remains to be the same. Grant aid to Africa is much higher than loan aid,
almost four times the amount in 2013. ODA loans since 2007 at least have generally been
three to four times less than ODA grants.
Figure 20: ODA Loans to Africa
Source: OECD DAC CRS
Japan’s ODA loans to Africa are mainly used for social services rather than infrastructure
development as in the case of ODA loans given to other regions in the world. 43.2 per cent of
710.4
300.5
437
672.2
522.8
654.4
508.2
420.9
666.2
0
100
200
300
400
500
600
700
800
2005 2006 2007 2008 2009 2010 2011 2012 2013
US
D M
illi
on
s
ODA Loans to Africa
49
ODA loans in 2013 to Africa were used for development of social services. Yet,
infrastructure does still remain a secondary priority for Japanese ODA loans. Other sectors
where loans have been provided and used include: Transportation, Irrigation and Flood
Control, Electric Power and Gas, and others. A small portion of these loans is also provided
as commodity loans and equity financing.
Figure 21: Sectorial Distribution of Loan Aid to Africa 2013
Source: JICA, TICAD report
Technical Cooperation
Japan began its technical cooperation program in Africa only in the fourth stage of its ODA
program to the region. Realizing that structural adjustment initiatives launched by DAC in
Africa were having opposite effects to what was previously experienced in Asia, Japan
embarked on shifting its strategy towards a more neutral stance that helped in creating a plan
for suitable development in the region. For this, Japan offered recipient countries in Africa
training, education and expertise on issues where structural reforms and adjustments were
unable to yield results.
For example, during the heavy drought and famine period, alongside providing food relief to
Africa, Japan also provided expertise in various agricultural activities, most notably,
sustainable rice production. These activities continued to expand to other sectors that became
increasingly important in the African context. Sectors such as human resources, healthcare,
mining and manufacturing were added to the list of technical cooperation areas.
Transportation, 17.80%
Irrigation and Flood Control,
4.20%
Social Services, 43.20%
Commodity Loans, 1.80%
Electric, Power, Gas,
21.30%
Others, 11.70%
Loan Aid 2013 (Y 81.2 Billion)
50
By 2012, Japan was spending approximately Yen 167 billion on technical cooperation around
the world, of which 23 per cent was focused on Africa, the second largest share in the
technical cooperation pie. As of 2013, JICA, the agency that executes technical cooperation
programs around the world, had budgeted nearly Y 46 billion towards the African region.
Figure 22: Sectorial Distribution of Technical Cooperation to Africa 2013
Source: JICA, TICAD Report.
Some of the other programs in technical cooperation to Africa include:
1. Training of officer, bureaucrats, educators etc., in courses including administration,
managements, development, education, healthcare and others. In 2013, 7246 African
trainees were accepted into Japan through the technical cooperation program.
2. Dispatching experts to advise local governments on programs and projects in various
fields such as agriculture, forestry and fisheries, mining and manufacturing, health
and medical care, human resources, urban planning etc. 2464 such experts were
dispatched from Japan in 2013.
3. Dispatching study teams to formulate suitable, adaptable and sustainable development
plans by being able to study the local socioeconomic environment of various recipient
countries and advise country governments on potential and viable plans towards
developing various sectors. 1983 study teams were sent to Africa in 2013.
Planning and Admin, 12.80%
Public Works and Utilities, 18.40%
Agriculture, Forestry, Fisheries,
27.80%
Mining and Manufacturing,
1.10%
Energy, 4.80%
Business and Tourism, 2.70%
Human Resources, 13.20%
Health and Medical Care, 10.90%
Social Welfare, 0.70%
Others, 7.50%
Technical Cooperation 2013 (Y 46.9 Billion)
51
4. Dispatching volunteers as part of the Japan Overseas Cooperation Volunteers (JOCV)
program to assist in development projects and goals. 439 volunteers were dispatched
to Africa in 2013, totalling 34000 since the program’s inception.
Tokyo International Conference on African Development (TICAD)
In 1993, in the peak of the fourth stage in Japanese ODA history in Africa, Japan launched
what is now its flagship program towards African development. The Tokyo International
Conference on African Development, TICAD for short is a five-year program that focuses
entirely on bringing together various stakeholders and actors that are focused on African
development and creating a robust development strategy for the coming half a decade.
By 1993, the international aid framework was experiencing what is known as ‘donor fatigue’
in relation to providing aid to Africa. It was highly apparent the international proactivity
towards Africa was diminishing based on the assumption that no amount of aid was enough
for African development. Moreover, the break-up of the Soviet Union just prior had also
shifted donor attention towards the newly formed Central Asian republics and eastern
European countries.
The launch of TICAD in Tokyo in October of 1993 was an attempt by Japan, the United
Nations (UN) and the Global Coalition for Africa to re-engage international interest in the
region. Members of 48 African countries including five heads of state attended the first
conference.
TICAD I aimed at two major objectives, which became the mainstay of all TICAD
conferences for the future. These objectives were (i) to promote high-level dialogue between
African policy leaders and their global partners and (ii) to mobilize support for African-
owned development initiatives. In order to achieve this, TICAD I discussed ways of reversing
the donor fatigue towards Africa and declaring commitment to avenues of cooperation
between African and the rest of the world. Participants of TICAD I adopted the “Tokyo
Declaration on African Development” which aimed to continue political and economic
reforms, increase private sector development, maintain regional and international cooperation
and cement Africa-Asia cooperationlxiiilxiv
.
In TICAD II in 1998, the primary theme of the conference rallied around poverty reduction
and integration of Africa into the global economy. The Tokyo Agenda of Action (TAA)
presented a framework of cooperation under the aegis of the TICAD process. The framework
included shared goals, objectives and guidelines for the implementation of development
52
programs in Africa over the next five years. It also paved the way for Africa becoming a
partner in the upcoming Millennium Development Goals (MDGs), which were adopted in
2000. One of the key outcomes of the conference was the solidification of the TICAD dual
principle of African ownership with partnership of the international communitylxv
.
TICAD III took place in 2003 and made efforts to explicitly commit the TICAD initiative in
support of the African Union’s (AU) flagship program, the New Partnership for Africa’s
Development (NEPAD). NEPAD was an agreement by the members of the African Union to
create a blueprint for peace, stability and socioeconomic growth in the region. Just prior to
TICAD III, in 2001 TICAD held its first ministerial meeting to discuss the progress of
TICAD and its upcoming tenth anniversary. 52 African countries, 28 Asian and Western
nations and 32 regional and international bodies discussed not only TICAD but gave their
inputs towards the recently adopted NEPAD strategy in Africa. Special attention was given to
the issue of ‘human security’ in TICAD IIIlxvi
.
The aim of TICAD IV, held in Yokohama in 2008, was to give priority to three main areas.
These were:
1. Boosting economic growth in the region
2. Ensuring human security including continuing on MDGs and working towards peace,
stability and good governance and,
3. Initiating discussion on environmental issues and climate change
TICAD IV resulted in the Yokohama Declaration that reaffirmed political commitment for
African development, establishing the Yokohama Action plan that outlined the process of
implementation of program and projects in the coming five years, up to 2013. The declaration
committed to continue efforts in poverty reduction and human security adding environmental
concerns and climate change to the upcoming objectives in African developmentlxvii
. The
declaration also established a follow-up mechanism to monitor and evaluate the progress of
previous and current program of TICAD by organizing ministerial follow-up meetings to be
held in African countries. TICAD IV also recognized positive trends emerging in Africa,
primarily due to improved governance and political stability since the previous TICAD
conference in 2003lxviii
.
The most recent TICAD was held in June 2013. TICAD V marks 20 years of the TICAD
initiative and will run till 2018. The main theme of TICAD V revolved around the recent shift
of Africa from a continent of poverty and conflict to continent of hope and sustained
53
economic growth. The basic principles of this conference were (i) boost growth of Africa
through Trade and Investment of Private Sector and (ii) promote human security through
Japan’s unique assistance program. The conference concluded with the renewed Japanese
commitment of USD 32 billion in the next five years, of which USD 1.4 billion would in the
form of ODA. The plan outline in TICAD V revolves around three broad activities that
uphold the principles of previous rounds of TICAD as well as new strategies and objectives.
Robust and sustainable economy, inclusive and resilient society and peace and stability are
the three broad categories of planned activities for the next five years.
Table 6: TICAD V Activities and Commitments
TICAD V Activities and Commitments
Robust and Sustainable
Economy
Inclusive and Resilient
Society
Peace and Stability
Boosting Economic Growth Empowering Farmers as
Mainstream Economic
Actors
Consolidating Peace,
Stability, Democracy and
Good Governance
Accelerating Infrastructure
and Capacity Development
Promoting sustainable and
resilient growth
Counterterrorism
Investment Promotion Promoting Inclusive Society
for Growth
Securing Maritime Safety
Master Plans for
Comprehensive
Development
Doubling Rice Production in
10 years
Support for Unstable
Regions in Africa
Transportation Infrastructure
for Regional Integration
Market Oriented Agriculture Reconstruction of social and
human capital
Development of Human
Resources through African
Business Education (ABE)
initiative
Promotion of Universal
Health Care, Water and
Sanitation
Recovery of National
governance capacity
Capacity Building in Sustainable Development
through Low Carbon Energy
Development Aid to Prevent
the Recurrence and
54
Science and Technology Utilization Outbreak of Conflicts
Quality Educational
Environment and Gender
Mainstreaming
Source: Footnotelxix
Some of Japan’s aid commitments in TICAD V include USD 6.5 billion in support of the
African Union’s program on Infrastructure Development in Africa and supporting the
Comprehensive African Agricultural Development Program through aid and technical
assistance. TICAD V was the largest conference hosted by Japan with a total of 4500
delegates including 39 heads of state, 72 regional and international agencies and
representatives from the private and non-profit sectors.
Importance of Japanese Aid to Africa
Japan’s contribution to the African development program is important for a few reasons. One,
starting with the Japanese ODA history in Africa, its five-stage process over the last 60 years,
is a great example of what and how an ODA program should develop to be able to provide
the most impact for any recipient region. Countries like China and India, whose programs are
still in their adolescent phase, can learn the benefits and opportunities of ODA to Africa, the
potential pitfalls and challenges as well as the best methods and practices that can be applied
to the African context. Japan’s history gives the ODA program the unique of advantage of
“having been there, done that”, an experience that is invaluable for upcoming developmental
donors.
Second, Japanese program in Africa also provides clear example of how to provide ODA
while maintaining positions of mutual benefit and trade. Japanese ODA has never been covert
about its intention of tapping resources from African nations in lieu of grants, loans and
technical cooperation and yet where other DAC countries have alienated many recipient
countries the world over, Japan has been relatively successful in remaining an integral
developmental partner for many countries both in Asia and Africa.
Third, Japan is careful in selecting strategies that are suitable for different regions. Where
loan aid was very successful in Asia, grant aid has been the key in Africa. The Japanese
agencies involved in ODA such as JICA, JBIC and MOFA, have carefully designed strategies
that are not only suitable and adaptable but also sustainable for specific regions, countries and
55
localities. This is extremely important, especially for upcoming ODA programs, as it
provides examples of what to do and how not to follow the traditional donor strategy of “one
size fits all”, which was traditional DAC donor countries providing aid without understanding
where it was needed.
Finally, the Japanese program illuminates the necessity of dialogue and equal participation of
every stakeholder in the development partnership and assistance architecture. The success of
the TICAD conferences is based primarily on the fact that it brings together donors,
recipients and peripheral agencies and entities to discuss not only the demand and supply of
the ODA programs, but the effectiveness and impact of what has previously been done. It
allows both sides to understand strategies, pitfalls, success and failures in an attempt to
strengthen bilateral and multilateral ties. TICAD reaffirms the fact that notion like “donor
knows best” is in fact detrimental to any developmental partnership and must include the
voice of the recipient countries. It also confirms that no country or entity can go at it alone
and requires mutually beneficial partnerships to be able to be an effective tool in the global
developmental agenda.
56
Chapter 4: Avenues for Synergy in Strategies of ODA program in
Africa of India and Japan
Premise As Chapter 2 and 3 have outlined the similarities in the Japanese and Indian ODA programs in
Africa, it is thus necessary, based on the initial premise of competing with or providing an
alternative to China’s rise in the region, to design strategies that can be mutually beneficial in
expanding each country’s ODA reach. While many of the strategies that are used by either
country are standard for any donor activity globally, there are unique methods of aid and
assistance that can be coordinated to amalgamate both country’s comparative advantages. Even
within the similar strategies of Grants, Loans and Technical cooperation, synergies can be
designed to modify these strategies as to be able to draw on expertise of each other as well as
expand their reach. Though the overall structure of these common programs may remain
similar to what is being used today, certain nuances and sub-strategies can be coordinated
between the Development Partnerships Administration (DPA-India) and JICA.
As illustrated in Chapter 1, the need for Japan and India to coordinate and cooperate in ODA in
Africa is simply to counter-balance China, which has made large inroads to this potential market
already. Both China economic ties with African regions as well as its outreach programs have
solidified its position predominantly in western Africa but is starting to slowly capture the
eastern areas as well. Southern Africa has already been inundated with Chinese products,
developmental assistance and economic bilateral ties, so for India and Japan to penetrate the
African markets, they will have to focus on areas where either country has a foundation in place.
Eastern Africa, which has a large Indian diaspora and cultural and ethnic linkages with India will
be an ideal location for this bilateral cooperation to penetrate quickly. Furthermore, Japan’s
history with countries like Mozambique, Kenya and others on the Eastern Seaboard of Africa,
can play an added advantage in capturing this region.
The Chinese model of first creating and strengthening bilateral relations through its
development assistance program and then working towards capturing the markets is a proven
model that has put China in the driver seat in the region. It has been able to outshine and out-
perform most other nations in trying to penetrate the African market. Western economies that
have already recognized the future importance of the region are often impeded by distrust and
suspicion while trying to enter the African markets. Years, of ignoring this region, fuelling
internal conflicts and colonialization have made African nations wary of western economies
present in these markets. China and India, both developing, emerging nations, are not impeded
57
by these concerns, more so because of their non-interference stance in economic and aid
diplomacy.
China has effectively used this to expand its reach in the region. China’s strategic interests of
securing resources such as rare metals, fossil fuels and others are now being met as they have
been able to secure these resources in the resource-rich African region. India on the other hand,
has had only some success, perhaps due to its late entry into providing a unique developmental
strategy in the region. Though India is gaining prominence especially through its Lines of Credit
program and it’s India-Africa Forum Summit, its ability to reach a level where it can start
securing its strategic interests like China is limited by its capacity and capability. It will thus
require additional help from external sources to be able to be in a position that can compete at
some level with China.
An external source or partner for India must fulfil certain criteria, in order for the program to be
a mutually beneficial arrangement. For example, the partner country must be economically
strong or stronger, have larger volumes of resources that it can offer, be politically and
ideologically similar, have comparable development assistance program aimed at African
development and finally, desire penetration into the African markets as to be able to retain its
economic position in the future. While there are other countries in the world that can
complement India and fulfil some of these criteria, Japan is perhaps the best suited to meet all
five markers. Japan is currently the world’s third largest economy, has vast amounts of
resources available for Official Development Assistance, is politically aligned with India’s
political ethos, has a comparable development assistance program and requires a new market
as to be able to sustain its export oriented economy. Though Japan’s African policy is rooted
deep into the country and African region’s history, its past of supporting Apartheid era South
Africa, and its association with other OECD donor countries, has impeded its strategies in
competing in the region. The lack of historical linkages, unlike its linkages with Asia due to
Japan’s involvement in Second World War, keeps Japan relatively isolated from the region and
has in the past relied on third party cooperation to extend its development assistance program.
Furthermore, its initial reluctance to provide debt relief to HIPCs, also effected it relationship
with the region.
Given these concerns for both India and Japan (which have been illustrated through data and
literature in the previous two chapter), it is vital of both countries to come together to create a
single effective platform for development assistance in the continent. Synergies in their
strategies has the potential of making either country’s respective program more effective,
efficient and will eventually serve the larger goal of securing strategic interests especially
African country markets. Some synergies will be easy to design as complementing existing
58
strategies can be amalgamated fluidly, others may require some changes to implement, while
few will be harder to negotiate but can achieve far greater wider results. Thus, synergies in
strategies or avenue of mutual cooperation can be divided into three categories:
Easily designed and implemented
Easily designed but may require some negotiation to make mutually beneficial and may
require time to implement
Hard to design and implement due to the complexities of the program or initiative but
can have greatest results in the shortest period of time
For example, debt relief coordination and coordination in technical cooperation may be the
easiest to design and implement. Merger of TICAD and IAFS can be easily designed, but
coordination on venue, themes and issues and potential member participation will require
negotiation and planning. Finally, cooperation in programs like the Indian LOC initiative or
avenues of economic cooperation in the region, will require much more negotiation and out-of-
the-box strategies but if implemented can result in quicker achievement of the overall market
penetration goal of either country.
Debt Relief Coordination
Both Japan and India have similar ideologies toward debt relief towards African nations.
Both countries in principle agree that debt relief to heavily indebted developing countries
creates a cyclical problem by which HIPCs continue their fiscal mismanagement assuming
that debt will be written off by donors. While India is constrained by its fiscal strain, not
allowing it to contribute high volumes of debt relief to Africa, Japan’s debt relief efforts have
only been a result of international donor pressure post the Gleneagles summit in 2005.
The criteria used for determining debt relief for certain African nations is based on the DAC
accepted qualifications of what constitutes a country in need of debt relief programs. Though
the criteria of “facing heavy and unsustainable debt that cannot be addressed by traditional
development assistance”lxx
is one of the main criteria, other criteria include eligibility through
membership, proven track record of social and economic reform as prescribed the donors,
groupings or multilateral organization and implementation of programs designed and
recommended by the extending countries or groups of countries. DAC debt relief tends to
also follow traditional notions of conditionality by imposing measures to enforce and
implement strategies designed by donor countries post the extension of the debt relief
package. This is in complete contrast to the Indian ODA ethos of non-interference and
Japanese ethos of being largely non-conditional, especially in regard to debt relief.
59
Even though India and Japan may disagree on the ideology behind debt relief, both are active
debt relievers for African nations owing to the fact debt relief has had a generally positive
effect on African economies. Yet, in recent years the definition or qualification of what
constitutes as a Heavily Indebted Poor Country (HIPC) has been eclipsed by changing times
and changing needs. While traditional DAC member, excluding Japan, have continued to
prescribe the same qualifications, non-traditional donor such as India, China and in this case,
Japan are looking to redesign the criteria.
As of 2013, India has provided approximately USD 37 million in debt relief to five key
countries, as shown in chapter 2. On the other hand, Japan’s debt relief program to Africa has
been far larger but still relatively small in its overall debt relief program. Japan’s highest
contribution to debt relief in Africa was in 2011 when it contributed nearly USD 1.4 billion
towards writing off the debt of African HIPCS. While there was a drastic fall in debt relief in
the subsequent year, the current level of debt relief provided by Japan to African HIPCs is
around the USD 910 million.
It is nearly impossible for India to match Japans level of commitment to debt relief of HIPCS
not only in Africa but anywhere in the world. Yet, the similarity in ideologies in debt relief of
both countries offers a unique opportunity to redefine the norms that help categorize
countries in need of debt relief measures. The opportunity allows the countries to create a
detailed qualification program that is far removed from the overly simplified criteria of
“facing unsustainable debt” as subscribed by DAC, World Bank and IMF. The redefinition of
the qualifications norms can also present a more non-conditional, non-interference method of
providing debt relief to countries who actually need it, without their adherence to conditions
such as social and economic reforms or institutional policy changes as encouraged by the
other traditional donor.
Though the criteria of facing unsustainable debt will remain as one of the pillars that
contribute towards qualification as HIPCs, other possible criteria can include:
Lack of fiscal and regulatory framework or infrastructure
Lack of sustainable economic activity to spur economic growth
Skewed set up of the economic environment that limits economic viability as to
prevent future debt – Heavily agrarian economy, high number entitlement and welfare
programs etc.
60
Countries affected by natural disasters or environmental crisis such as drought, famine
etc.
High level of monetary and fiscal discrepancies-inflation, economic depression,
weakened currency.
Mismanagement in resource allocation
The disparity in the volume of debt relief provided by both India and Japan may not allow the
program to expand very much as India is not in a position to provide more debt relief than it
already does but an Indo-Japanese program does have the potential for greater reach, better
monitoring and evaluation and assistance in providing developing world perspectives on
improving fiscal systems that lead to further debt crisis. India’s own economic history in
facing high debt can be instrumental in Japans debt relief program by providing recipient
countries historical and practical methods of reducing the tendencies towards creating large
debt and best practices that can help keep debt relieved countries out of future debt.
The challenge in this avenue of cooperation is that India’s minor position as debt relief
provider may not be able to offer the Japanese program much in monetary and resource value.
While the Indian experience will be able to provide a developing world perspective and
expertise towards debt, its causes and solutions, it will not help in the expansion of the
Japanese debt relief program. Furthermore, recent trends in Japanese ODA becoming more
involved in the internal politics of various recipient countries may clash with India’s adopted
stance of non-interference. Economic and commercial interest and strategies tied to debt
relief extensions may also clash, though debt relief has never been publicly tied to either
economic or commercial interests for either country.
Mutual Cooperation in Technical Cooperation
Apart from the recent addition of the LOC program in the Indian ODA strategy and the debt
relief in the Japanese strategy, one of the mainstays to either development assistance
programs has always been providing technical and economic cooperation to African nations.
The Indian Technical and Economic Cooperation program has been part of the Indian ODA
strategy as early as 1964 and the Japanese technical cooperation has been around since 1952.
African nations are heavily reliant on these two programs as more than just providing loans,
grants and relief, the technical cooperation programs provide socio-economic skills, training
and capacities that have a longer and sustainable impact on the recipient country.
61
While there are similarities in the TC programs of either countries such as sending experts,
training African personnel (government officials and military officers) and providing skill
development, unique features such Japan’s JOCV program and India’s allowance of large
number of African students can be useful additions to either countries ODA programs. The
most important underlying issue though remains the mounting costs of the technical
cooperation program. Japan especially has seen an exponential surge in costs of training not
only African nationals but sending experts and JOCVs to African nations, reducing the size
of their earlier commitments to new lows. A study by the United Kingdom’s donor agency
Department for International Development showed the western training modules and training
of experts or volunteers to work in developing nations can cost as much as USD 10,808 per
person, which also includes logistical costs in the country of operationlxxi
. Similar costs are
being borne by the Japanese aid agencies in maintaining such training programs especially
among JOCVs. The dwindling interest in the JOCV program where in fewer volunteers have
opted for JICA’s long running program over the last few years is also making the program
not as cost effective as in previous years. In fact, JICA has had to reduce benefits of JOCVs
due to budgetary restrictions.
India does not have external volunteer program as of yet and no plans of creating such a
system is in the pipeline, but India does provide technical cooperation and training to African
nations and their personnel. One of the primary reasons for India being a preferred
destination for such training programs is the reduced cost of the Indian program. Unlike the
high costs of maintaining a certain lifestyle and comfort of either DFID volunteers called the
International Citizen Service or the Japanese Overseas Cooperation Volunteers (JOCVs), the
Indian program maintains controls on costs for its program. According to a report by the
Institute of Development Cooperation Research (IDCR), the average training cost per person
in India is approximately USD 2800, while the same program in any other country including
Japan would be on average 7 to 8 times more expensive. India thus has a slight comparative
advantage in maintaining lower costs and can be instrumental in a joint technical cooperation
program.
Given the history of the Japanese Volunteer program, especially its established reputation
around the developing world and the lower costs of the Indian training program, there lies a
clear possible complimentary avenue for mutual cooperation. The JOCV program can greatly
benefit by lowering costs, by which it will be able to provide the same privileges it had earlier
to be able to attract larger number of volunteers. India can provide training at a much lower
62
cost and thus can be used to train the JOCV volunteers. While the logistical costs may remain
unchanged as visa fees, accommodation, transportation, etc. are a costs usually incurred in
the final country of operation, capacity development and training can be significantly less in
terms of cost if conducted either in India or using Indian programs.
For purposes of quality assurances, Japan can train Indian trainers to provide the necessary
tools and education it feels is needed to be given to its Japanese volunteers. The added
indirect advantage of this collaboration can also be the transfer of knowledge, skills and
expertise to
Indian development officers from an established program. The transfer of knowledge will not
only benefit Indians on how to deal effectively with members of other nations, as Japan has
done through its JOCV program, but also gain intrinsic insight into a possible avenues for
future external volunteering programs.
Case Study: ProSavana Mozambique
ProSavana is a trilateral cooperation program between JICA, Brazilian Aid Agency
(ABC) and the Ministry of Agriculture and Food Security (MASA) of Mozambique.
The program, designed to help agricultural development in the area, is a technical
cooperation program, where JICA supports Brazilian experts to train, design,
implement and operate agriculture development projects in Mozambique. Given
the similarity in agricultural environments of Brazil and Mozambique as well as
previous cultural and historical linkages between the two countries, Japan help
train Brazilian experts and provides for some logistical costs of the program. The
aim of the project is to enhance the livelihoods of the inhabitants of the Nicala
Corridor in Mozambique by improving and modernizing agricultural productivity
and to create employment through agricultural investments.
To do this, the three agencies coordinate with private sector bodies to create
open and frank dialogue and interaction between industry, civil society and
government, provide technical expertise in agricultural productivity and
investment and implement strategies and best practices used in Japan and Brazil.
The program has had various success but issues of Land Grabbing and fear of
Brazilian practice that are not suitable for the region have surfaced in recent
years.
Source: ProSavana Website and Article on Land grabbing practices
Figure 23: Case Study: ProSavana Mozambique
63
A second avenue of mutual cooperation is in India helping Japan expand its program that
brings African officials for training and development to Japan itself. As of now, this Japanese
program is limited to mostly government officials and civil society workers, while India has
far wider array of people it allows to come in from African nations. The first perhaps would
be to ease controls on students coming into Japan from Africa and gearing education focussed
on African development and African training. Moreover, much like India, Japan may be able
to train African military personnel, especially now that Japan is moving away from a Self
Defence Force towards a more regularised military establishment.
At the very least, if Japan is unwilling to expand its own program of bringing African
officials to Japan, it can help in supporting the Indian program by providing it the much
needed funds and resources that India currently does not have to be able to expand this
initiative to a level that can make a hard impact on the African continent. This avenue of
cooperation can be instrumental in shifting the momentum away from the Chinese as people
trained by India and Japan may have tendencies to lean closer to the latter countries than
those who have gained knowledge and expertise from the Chinese. Moreover, African
officials looking for development strategies designed in the Global south would turn towards
either India or China and thus Japan would find it useful to support such programs in order to
make indirect linkages through the Indian training program.
Merger of TICAD and India-Africa Forum
One of the more plausible and viable avenues of mutual cooperation in ODA to Africa for
both India and Japan can be the merger of the two large, highly successful forums organized
by either country. There has been ample evidence of the success of the TICAD forum, which
has now expanded to encompass nearly 30 countries from Africa. Since its inaugural session
in 1993, the TICAD program has been instrumental in providing direction to Japanese ODA
strategy in Africa, relying on inputs and insights from the various African nations vying for
developmental assistance. The importance and success of this program is evident in the
number of countries, heads of state and companies that partake in this program as well as the
inter-ministerial sessions that take place in years between each TICAD. In TICAD V, 51
countries of Africa were represented with an additional 31 countries from Asia, 39 heads of
state, 72 international and regional organizations and numerous civil society and business
sector participants which made up the 4500 people strong forum.
64
The India-Africa Summit, though only in it is 3rd
year, has also been key in fleshing out the
bilateral and multilateral paradigms between India and African nations. India’s interest in
Africa may have been rooted in history, but the IAFS is unique as it provides India the chance
to move away from its selective African development partnerships towards a larger, more
macro strategy. Unlike the TICAD though, the IAFS does not solely look into African
development as it also discusses issues of economic and trade relations. There are some
similarities between the two programs on the other hand in spheres relating to peace and
security, environment and climate change and socio-political linkages. In the most recent
India-Africa Summit, the government of India pledged commitments of up to USD 10 billion
in LOC programs, USD 600 million in grant assistance, a USD 100 million for the Indian
Africa Development Fund and USD 10 million for the India-Africa Health Fund.
Representative of 54 countries of Africa participated in the last IAFS.
The obvious collaboration between the Japanese ODA program and the Indian ODA strategy
in Africa would be the merger of the TICAD and IAFS. In simplest terms, the merger of
these two flagship conferences will give either country a stronger stakeholder responsibility
in the other countries relationship with African nations. A large annual, bi-annual or even
four year conference (TICAD being every five years) will give both countries a chance to
combine their ODA strategies with input and insight provided by their African partners and
expand the scope of work and programs that are currently employed as separate entities. An
amalgamated position, which draws on the developed, economic powerhouse status of Japan
and the leading developing nation status of India can provide a more holistic approach to the
African developmental agenda, wherein best practices, views, policies and recommendation
can be accrued from both ends of the developing spectrum. For example, in Japanese
designed developmental strategies, India can play assist develop the program from a
developing world perspective. Concomitantly, an Indian designed strategy can get the boost
to expand its scope from the sheer size of the Japanese economic diplomacy program. The
similarities in themes and issues covered by both conferences, only means that apart, these
issues are regurgitated over and over again, while a joint program will bring both developed
and developing perspectives under one large umbrella.
The other collaborative option for these two forum is to create an off-shoot forum on India-
Japan-Africa trilateral. The smaller forum can draw from the expertise, decisions and
commitments made in either TICAD or IAFS and in effect keep the conversation or
conference alive and relevant. The problem of having conferences spread over years is that
65
shifts in global architectures, regional systems or even individual country dynamics happen
quickly and frequently within these periods. The smaller collaborative conference would be
an easier method to keep both the conversation and decisions up-to-date with the changes in
the global, regional or domestic dynamics. An annual conferences which brings together
these programs, even perhaps to jointly monitor and evaluate the impact of decision and
commitments made in the larger programs would go a long way in maintaining not only the
focus on Africa, but fleshing out the pros, cons, the good and the bad of either countries
flagship event.
More importantly though, a merger between the two conferences will not limit the discourse
to primarily developmental goals and targets. A merger has the potential to cover other socio-
economic and geo-political issues that may be affecting the bilateral or multilateral
relationship between India and Africa or Japan and Africa. Discourse and policy decisions
would not only become easier through a large joint conference or trilateral but will able to
gain expertise of either India or Japan and also be able to encompass more pressing issues
like trade, economy, security, climate change and conflict, which are often only dealt with at
a bilateral level. It will also be in a position to foster business-to-business relationships, civil
society interactions and government relations. Over time, the merged conference can also
include smaller regional and international partnerships such as the Korea-Africa forum
expanding both the expertise available and sharing the responsibility to other nations. A final
advantage of such a merged program would be the possibility of the India and Japan learning
directly from African nations on viability and feasibility of their own ODA strategies,
allowing changes to be made accordingly. Best practices, technology transfers, joint
strategies in ODA and the possibility of showcasing industry to a larger audience are some of
the possible results of such a merged conference.
Japan’s Involvement in India-African LOC program
As outlined earlier in this paper, the Indian LOC program is it is flagship instrument for
economic diplomacy. The uniqueness of the model, which gives the credit-recipient country
the power to choose the projects it wishes to gain credit for rather than be dictated by the
donor country has gained popularity in Africa over the last ten years. The added advantage of
the program allows the donor country market penetration by attaching domestic industry to
undertake the said development project. The increase in the LOC program in the last ten
years, from its inception in 2005 to its current status in 2015 is a clear indication of the
success of the program. It is well known that Indian companies that have become
66
shareholders in these African development programs, especially among those which have
been successful (Ethiopia sugar industry), have found easier access to these African markets.
In fact, it is the success of the LOC program in Africa that has shifted some western strategies
to mimic the same.
While a Japanese LOC program as an entity in itself does not exist as of yet, Japan’s aid has
become more tied in the recent years. Japan has been building towards providing aid that also
helps its own domestic economy but the focus of this program has generally remained in Asia.
Japanese infrastructure projects are designed and implemented by JICA or JBIC but a unique,
autonomous program of Line of Credit, similar to India’s, has not yet been initiated. With
Japan’s economic prowess and ability to provide large ODA to the developing world, it is
easy to see that a foray into such an LOC program could yield quick and immediate results as
Japan will be able to undercut many of the other developing nation LOC programs by
offering even lower interest rates and technical expertise but also just has larger volumes of
aid available to be put into a future program. Moreover, it may help Japan divert its funds
from simple debt relief, which it is already reluctant to provide, towards a symbiotic program
that also helps its own domestic economy and industry and follows some of the ethos of the
free market based ODA system.
The disadvantage of a standalone Japanese LOC program lies in the notion that Japan may
not be able to penetrate the African market given the dominance of both China and India who
have been working in the region for a long time. A new LOC strategy for Japan will require
time and tweaking to be able to become a strong and trusted program, by which time the LOC
programs of both India and China would have gained further ground. Moreover, Japan’s
OECD commitments as a world economic power and a responsible traditional donor may not
allow it to divert the necessary funds towards an autonomous LOC program. As LOC
programs are also a form of loans rather than aid, the Japanese strategy of providing grant aid
and technical cooperation only to Africa, will require a concerted shift in its ODA strategy.
The second and perhaps a more viable option for Japanese involvement in providing credit to
Africa lies its involvement in the Indian LOC program. While it may not be possible for India
to allow Japanese companies to be tied into the projects that it credits, Japan can lower its aid
to India (the largest recipient of Japanese aid) in adding to the credit availability for African
development projects. India’s LOC program is only limited by the resources that it can
provide given the constraints on its economy and thus assistance from Japan on providing
67
larger, diversified loans to various development projects and agendas can help India expand
its LOC program tremendously. It is wholly possible that with Japanese credit assistance in
the LOC program, India may be able to rival the only other LOC provider in the continent,
China.
There is an additional indirect advantage for Japan to join the Indian LOC program. Japan’s
aid to India to spur economic growth and help boost Indian industry will be benefited by
direct support of Indian companies tied to any line of credit that is offered. By providing
larger credit lines Indian companies will be able to foray into the African market in a more
diverse set of sectors, not limited to predominantly infrastructure related projects. A
combination where in a Japanese company is tied to provide consultancy for feasibility of the
project while Indian companies fill the tender itself can be worked out or vice versa may be
mutually beneficial for domestic economies of both countries. Other such complimentary and
mutually beneficial combinations can include Joint Ventures (JVs) between Indian and
Japanese companies being allowed to bid for these contracts or equipment provided for such
projects to be sourced from either Japan or India while the construction is conducted by the
other country. The added benefit of Japan’s involvement in the Indian LOC program will be
that it will be able to tap into an established network that India has already constructed rather
than trying to build one on its own.
India-Japan Economic Cooperation for African Development
The current situation between India and Japan in terms of economic cooperation, shows a
bilateral partnership that is becoming stronger every day. Even prior to the shift in the
Japanese economic relations position in 2000 under Prime Ministry Mori and then Indian
Prime Minister Vajpayee, India-Japan economic relations have had a significant impact on
both countries. The Marti-Suzuki tie up in the late 1980s was perhaps the biggest catalyst for
transformation in the Indian automotive sector. In a time, where India was heavily reliant on
import-substitution and had a relatively closed economy, Japan’s investments in India were
one of the few foreign entries into Indian industry and according to some experts, the positive
cooperation, may have given India the confidence to open its markets to other investments.
In terms of purely economic statistics, the Indo-Japanese economic relation have been
steadily increasing over the last few years. With Prime Minister Modi and Prime Minister
Abe as close as they seem, this economic partnership is bound to continue. As previously
68
mentioned, India is the largest recipient of Japanese ODA and has been one of the more
successful countries for investments from Japan. In terms of bilateral trade alone, trade
between the two countries accounts for 1 per cent of Japanese total foreign trade while
accounting for nearly 2.5 to 3 per cent of Indian foreign trade. As of 2013-14, the bilateral
trade stood at approximately USD 16.3 billionlxxii
, though slight contraction in the Japanese
economy have decreased this figure slightly over the last few years.
However, foreign direct investment into India has been the larger success story. In 2012, 7
per cent of India’s total incoming FDI was from Japanese sources and the figure has
remained relatively constant over the years. In that year, FDI into India was recorded as high
as USD 2.7 billion (approximately 1.6 per cent of total Japanese FDI outflow) as compared to
the USD 139 million in 2004. Between 2000 and 2013, Japanese companies have invested
close to USD 15.3 billion in Indialxxiii
. As of December 2014, 1209 Japanese companies are
registered in India and 3961 establishments of Japanese businesses operating around the
countrylxxiv
. The recent visit of the Japanese Prime Minister has further bolstered ties between
the two countries, with trade now up to USD 18.5 billion and the announcement of the USD
14 billion deal on construction of the Shinkansen (bullet train) in India in the coming years.
Given both the current stability of the economic relationship between the two country and
India’s increasing relevance as a global economic player, economic cooperation between the
two countries as part of the ODA strategies cannot be left out. Both India and Japan have
various economic strategies to interact with Africa, whether it be through preferential trading,
free trade associations and agreements or export-import subsidies and discounts. It would be
mutually beneficial for India and Japan thus to create joint economic strategies that can help
the African nation. The benefit of these joint strategies would be primarily in being able to
provide much more to a larger base. With Indian historical linkages and certain unique
program and initiatives, Japan can bring larger amounts of resources and funds to aid these
programs. Vice versa, India can provide direct linkages with African nations that Japan has
perhaps been trying to gain on its own. But the greatest advantage of economic cooperation
between the two countries will be that it will be able to offer an alternative to the Chinese
efforts in the region, both in terms of volume and penetration. The Chinese government
agencies and companies involved in African development and investment have made large
inroads into the African market by not only being able to provide larger amount of resources
and investments but tapping into the markets through historical and contemporary linkages.
For India or Japan to be able to achieve the same results as their Chinese counterparts, the
69
lack of one variable in either country (linkages for Japan and volumes for India), requires
economic cooperation with the other.
As a first step, which also might be the easiest to execute, would be the creation of trilateral
free trade agreements between India-Japan and single or group of African countries. The FTA
could be designed to incorporate the needs of Japan and India in the African market and the
development of key industries within the third partner(s). The free flow of goods and services
within these FTA would add to a traditional FTA set up by allowing more countries to
participate and reap the benefits of easier export and import controls. It will give Indian and
Japanese companies penetration in to African markets while giving impetus for African
companies to develop as to be able to compete in an emerging market like India and an
established market like Japan. It would offer a variety in markets such that African
companies can develop broadly rather than specific to one type of market system.
The second step would be to expand programs like India’s DFTP scheme. The DFTP or Duty
Free Tariff Preference scheme gives duty free market access on 85 per cent of India’s tariff
lines to 33 countries in Africa. It provides duty free and preferential market access to nearly
92 percent of all exports coming out Africa’s lowest developed countries (LDCs)lxxv
. Japan
could mimic such a program for its own use or in fact, for a better mutually beneficial ODA
strategy, provide resources and funds to compensate any losses India may incur by expanding
this list to 100 per cent and increasing the number of countries that can subscribe to this
scheme. One of the reasons why the DFTP scheme does not cover all exports from LDC
countries in Africa is because certain commodities are sensitive to the Indian government’s
account. If Japanese ODA to India were to be used for the procurement of these exports, the
scheme could be expanded to provide preferential market access for all of the exports coming
out of these LDC countries and those exports that can potential affect India can be
compensated by Japanese funds. While the details and the process to implement this avenue
of cooperation may require negotiations between the two countries, it can be mutually
beneficial for both countries. First and foremost it would help India gain necessary resources
for the DFTP program and be able to expand its program to cover the remaining 20 countries
barring South Africa and secondly, it can perhaps reduce the reluctant debt relief program
Japan continues to conduct in Africa by diverting some of these funds towards African
exports or divert some of the funds from failing Indian programs in the overall Japanese
ODA strategy.
70
The reason this strategy is highlighted among the many other possible avenues of mutual
economic cooperation is because it is already used as an ODA strategy by the Indian
government. The need for economic cooperation is paramount in this endeavour as it will
move away from traditional donor behaviour towards creating a robust economic system in
the recipient country rather than one which can possibly lead to dependency. By providing
market space for exports, especially for fragile LDC countries, it will start the process of
transforming countries toward export orientation and not just geared towards domestic
industry. The old adage of “give a man a fish, he will eat for a day or teach man to fish and he
will eat for a lifetime” can be applied to this possible strategy and could work well in a
continent which has been used to getting bail-outs more the jump-starts.
71
Chapter 5: Conclusion As far as traditional donor behaviour is concerned, while Japan and India both have slightly
differentiated programs, wherein each has unique strategies employed by their programs, they
do tend to follow structures and architectures set by older western aid initiatives. The
similarities to the standard donor programs are evident in the similarities between the
Japanese ODA strategy and the Indian one, by which grants, loans and technical cooperation
are the mainstay of any program.
Where the programs differentiate from the traditional donor model is where they find their
uniqueness and thus perhaps their attractiveness for countries in the African region. For India,
it lies in one its LOC program and two in its adherence to the principles of non-interference.
India’s conscious decision to not differentiate between democratic and non-democratic
regimes and governments, allows it to interact and aid any country in Africa and not be
limited by governance structures, which are so important for western donors. For Japan it
stems from the focus on technical cooperation in terms of its volunteer program and its
TICAD as well as the favouritism towards grant based assistance rather than loan based.
Japan’s Africa strategy is thus very different from that of other OECD countries, especially
since it had also adopted a non-interfering role until only recently.
Both programs have many complimentary factors that can be used to create mutual avenues
of cooperation. The dominance of the Chinese in Emerging Africa, cannot be ignored for
much longer. With Africa poised to be the next market destination, it will be unwise for any
country, especially given the saturation of western markets to ignore the potential of the
African continent in the coming years. It is fortunate for a country like India, which will only
gain by expanding its market and penetrating new economic areas, that it has pre-existing
linkages with the African continent. Where it will take western countries, concerted efforts to
penetrate the African market and lay down foundations for future economic relations, India
already has that established. It is for India to lose that advantage if it does not act upon it as
fast as possible. China, which historically had little connection to Africa, has already realized
the continent’s potential, laid its foundations and now is beginning to seize the opportunities.
Why India hasn’t done so already given the diaspora in Africa and the cultural and historical
similarities and connectivity, is sometimes beyond comprehension.
Japan on the other hand has always been considered among the top economies of the world.
The rise of Japan post the ashes of the Second World War is a testament to the ability of the
72
Japanese to transform an economy from ruin to prosperity within a short period of time. It is
this that has been instrumental in Japan being one of the leaders in ODA, just not in Asia but
in other parts of the world. The problem for Japan in Africa though is that it is still associated,
and for the most part rightly so, as part of the developed, western world. The same western
world which has attempted numerous times in the past to try to change the very nature of the
African systems and in turn only garnered mistrust among these African nations. As an
integral member of the OECD group of countries, Japan’s association with the predominantly
western oriented group has been one of its drawback in terms of penetrating Africa at the
level it wished to. Even though Japan itself has never (only recently) required structural
adjustments like that conducted by the OECD and the Bretton Woods institutions, Japan’s
developed status is perhaps one of the main reasons for this continued apprehension towards
Japanese assistance. For Japan to correct this, it will need to piggyback initially on the
relations of another country until it can develop its own trusted relationships, and while China
is likely to go at it alone, India can use the help.
Though the paper outlines certain new avenues of mutual cooperation in ODA, the strategy
has been employed in the past by Japan itself. The ProSavana project in Mozambique is a
trilateral arrangements between the Mozambique government, the Brazilian Aid Agency and
the Japan International Cooperation Agency. JICA provides resources, funds and training for
Brazilian technical experts, who in turn advise the Mozambique government on agricultural
upgradation and infrastructure developmentlxxvi
. Japan has effectively used Brazil’s historical
linkages with the African nation in order to promote its activitieslxxvii
.
This paper does not in any way say that neither India nor Japan have made any headway in
terms of penetrating the African market. They have surely, especially with the concerted
efforts of their ODA programs in the region. But at the same time, if one is to study Chinese
investment in Africa, the rapid pace at which it has been able to spread throughout the
continent and not limit itself to either the west or the east coast is an example of the way
economic diplomacy with the right balance of corporate growth can gain quick advantages in
this region. The unique selling point (USP) of the Chinese model is that it brings together a
very refined balance between aid diplomacy and corporate promotion, starting first with
dedicated efforts in improving or fostering economic and bilateral relations, paving the way
for corporate investment.
73
It is this process that is key to future market penetration for both India and Japan. While the
argument that either country should build upon existing linkages and relationships i.e.
through Indian LOCs or Japanese corporate investments, the Chinese model if studied shows
that formal government to government relations create better, more efficient system that can
facilitate corporate investments in the recipient country. Years of mistrust caused by the
western powers seeming to come to Africa to exploit its resources has made the region
relatively wary of foreign investment and interest. Thus the Chinese model of first solidifying
government relations has worked well, giving recipient African countries the confidence to
allow investment, showing that it is not only for resource exploitation but rather a
developmental partnership or cooperation.
Finally, not having a strategic goal in their aid diplomacy programs, especially the
historically altruistic nature of the Japanese program of grants and debt relief, cannot be a
viable option anymore. As Japan begins to formally accept that it has repaid its burdens of the
Second World War as outlined by Prime Minister Abe on August 14th
, 2014lxxviii
, its
diplomacy must start to reflect that as well. For India on the other hand, corporate investment
in Africa is new and more a reaction to the failing domestic investment policy space created
by the policy paralysis perpetuated by successive governments. In recent years, corporate
relocation to Africa through Mergers and Acquisitions (M&A) and joint ventures with
African companies has increased immensely. Yet, Indian corporate investment in Africa are
still in their nascence phase and cannot be heavily relied on for future market penetration. On
the other hand, strengthening bilateral and multilateral relationships between India and its
African counterparts at a government level can be the platform to launch future corporate
investment.
At the very end, given the complementarities of both ODA programs, a natural evolution of
such strategies would ideally be formalizing mutual cooperation for African development. A
joint ODA strategy between an established economic diplomacy program such as Japan’s and
an emerging, preferred program such as India’s can be a game changer both in terms of
individual economic systems as well as the global economic diplomacy architecture. It will
be prudent for both governments to create strategies that can play on eithers strengths while
compensating for eithers weaknesses or challenges. While it is completely understandable if
Japan and India wish to pursue their African strategies separately, the possibility that they
may lose to China in the long run cannot be a scenario that is ideal for either country.
Economically, both countries will need to expand their markets and with current export
74
saturation in Europe and the Americas, upcoming saturation in Asian and South American
countries, the only viable option for these countries will be Africa. As shown, it is important
for these countries to solidify their G-to-G relations now in order to not only facilitate future
market penetration but lay in the foundations early in a region which will be the future
economic battleground.
75
Endnotes and References: i Elbadawi, I and Sambanis, N. “Why Are There So Many Civil Wars in Africa? Understanding and Preventing Violent Conflict”. Journal of African Economies. December 2000 ii Mckinsey Global Institute. “Lions on the Move: The Progress and Potential of African Economies”. McKinsey & Company. June 2010. iii Ibid. page 4. iv Dubey, A and Biswas, A. “India and Africa’s Partnership: A Vision for a New Future”. Springer. 2016 v Ryenold, I and Hirokawa, T. “Abe Offers $32 billion to Africa as Japan Seeks Resources”. Bloomberg Business. June 2013. http://www.bloomberg.com/news/articles/2013-06-01/abe-offers-32-billion-to-africa-as-japan-seeks-resources-1- vi Mcgroarty, P. “China’s Xi Pledges $60 billion for African Development over Three Years”. The Wall Street Journal. December 2015. http://www.wsj.com/articles/chinas-xi-pledges-60-billion-for-africa-development-over-three-years-1449224028 vii “African Union opens Chinese-funded HQ in Ethiopia”. BBC World News. 2012. http://www.bbc.com/news/world-africa-16770932 viii Xiaoyun, L. “China’s Foreign Aid and Aid to Africa: Overview”. College of Humanities and Development. China Agricultural University. ix Sun, Y. “China’s Aid to Africa: Monster or Messiah?” Brookings East Asia Commentary. No. 75. Brooking USA. Feb 2014. x Ibid. xi Xiaoyun, L. “China’s Foreign Aid and Aid to Africa: Overview”. College of Humanities and Development. China Agricultural University. xii Kragelund, Peter, 2010. The Potential Role of Non-Traditional Donors’ Aid in Africa, ICTSD Issue Paper No. 11, Geneva: International Centre for Trade and Sustainable Development. xiii Mullen R. India’s Development Assistance: Will It Change the Global Development Finance Paradigm. April 9, 2013. xiv Fuchs, A and Vadlamannati, K. “The Needy Donor: An Empirical Analysis of India’s Aid Motives”. April 2012. xv Mullen R. India’s Development Assistance: Will It Change the Global Development Finance Paradigm. April 9, 2013. xvi Chanana, Dweep. “India as an Emerging Donor”. Economic and Political Weekly 44.12 (2009): xvii Grants and Loans to Foreign Governments. Budget of India 2014-15. Indiabudget.nic. http://indiabudget.nic.in/ub2015-16/eb/stat11.pdf xviii ITEC. About ITEC. Ministry of External Affairs of India. http://itec.mea.gov.in/?1320?000 xix ITEC. About ITEC. Ministry of External Affairs of India. http://itec.mea.gov.in/?1320?000 xx ITEC. About ITEC. Ministry of External Affairs of India. http://itec.mea.gov.in/?1320?000 xxi ITEC. About ITEC. Ministry of External Affairs of India. http://itec.mea.gov.in/?1320?000 xxii “50 Years of ITEC”. Ministry of External Affairs of India. http://www.mea.gov.in/Uploads/PublicationDocs/24148_REVISED_50_yrs_of_ITEC_brochure.pdf xxiii Export of Lines of Credit. EXIM Bank of India. http://www.eximbankindia.in/sites/default/files/loc-english.pdf xxiv Shareholder Statement. World Bank. 2014 xxv Shareholder Statement. IMF. 2015 xxvi Shareholding and Voting Right Statement. Asian Development Bank. 2015 xxvii Shareholders statement. African Development Bank. 2015. xxviii IDCR Report: State of Indian Development Cooperation. IDRC. 2014 xxix “India launches Pan-African e-network Project”. Hindustan Times. Feb 2009. http://www.hindustantimes.com/education/india-launches-pan-african-e-network-project/story-8Nn1l1IGmJ2ZT886o2IeaI.html xxx Beri. R. India’s Policy on Africa Post Cold War Era: An Assessment. Strategic Analysis Vol 27. Institute of Defense Studies and Analyses. June 2013. xxxi Beri. R. India’s Policy on Africa Post Cold War Era: An Assessment. Strategic Analysis Vol 27. Institute of Defense Studies and Analyses. June 2013.
76
xxxii Taraporevala. P. Courting Africa through Economic Policy. India-Africa Brief. IDCR. Aug 2013. xxxiii Mawdsley E. The Elephant in the Corner? Reviewing India-Africa Relations in the New Millennium. Geography Compass. February 2010. xxxiv Bijoy. C.R. India: Transiting to a Global Donor. Campaign for Survival and Dignity. Special Report on South-South Cooperation. 2010. xxxv Qadri A and Singhal R. Development and Diplomacy through Lines of Credit. Observer Research Foundation. August 2014. xxxvi Soni, S and Lal, P. “India’s Economic Footprint in the Developing World”. Issue Brief # 100. Observer Research Foundation. August 2015. xxxvii The list does not denote any ranking system, it is just a comprehensive list of countries to which LOCs are extended. The six missing countries do not have any Indian LOCs operating in the country. xxxviii India’s Development Cooperation: Opportunities and Challenges for International Development Cooperation. German Development Institute. Briefing Paper. March 2009. xxxix Bijoy. C.R. India: Transiting to a Global Donor. Campaign for Survival and Dignity. Special Report on South-South Cooperation. 2010. xl Price, G. “India’s aid dynamics: From recipient to donor?” Chatham House. September 2004 xli Mawdsley E. The Elephant in the Corner? Reviewing India-Africa Relations in the New Millennium. Geography Compass. February 2010. Page 85 xlii Taraporevala. P. Courting Africa through Economic Policy. India-Africa Brief. IDCR. Aug 2013. xliii Potter D. Japan’s Official Development Assistance. http://office.nanzan-u.ac.jp/cie/gaiyo/kiyo/pdf_12/kenkyu_02.pdf xliv ibid xlv Japan’s ODA Program. JICA Annual Report 2014. Japan International Cooperation Agency. 2014. xlvi Japan’s ODA Program. JICA Annual Report 2014. Japan International Cooperation Agency. 2014. xlvii Jingru W. Japan’s ODA to China: An Analysis of Chinese Attitudes towards Japan. Department of Political Science. National University of Singapore. 2004. xlviii Japan’s ODA Program. JICA Annual Report 2014. Japan International Cooperation Agency. 2014 xlix Jingru W. Japan’s ODA to China: An Analysis of Chinese Attitudes towards Japan. Department of Political Science. National University of Singapore. 2004. l Available literature describes Technical cooperation to be a separate entity much like in the case of India, though JICA presentation of data shows Technical Cooperation to be part of the Grant based aid that Japan provides. For the purpose of the study, technical cooperation will be described as an independent entity, it is understandable as to why this is depicted as such as resources provided in this strategy is often given to the recipient without request of repayment or return. li Japan’s ODA Program. JICA Annual Report 2014. Japan International Cooperation Agency. 2014 lii Patrick, H. Legacies of Change: The Transformative Role of Japan’s Official Development Assistance in its Economic Partnership with Southeast Asia. Discussion Paper No. 54. Asia-Pacific Economic Cooperation. Columbia University. 2008 liii Potter, D. Japan’s Official Development Assistance. http://office.nanzan-u.ac.jp/cie/gaiyo/kiyo/pdf_12/kenkyu_02.pdf liv Thernstrom, A. Japanese ODA at 50: An Assessment. Woodrow Wilson International Center for Scholars. February 2005. lv Japan’s ODA Program. JICA Annual Report 2014. Japan International Cooperation Agency. 2014 lvi Japan’s ODA Program. JICA Annual Report 2014. Japan International Cooperation Agency. 2014 lvii Wild, Leni et. al. Informing the Future of Japan’s ODA: Japan’s ODA with an African Context. Overseas Development Institute. October 2011. lviii Sato, Makoto, ‘An historical analysis of Japan’s aid policy in Africa’, in Howard P. Lehman (ed) Japan and Africa: Globalization and foreign aid in the 21st century (London: Routledge, 2010). lix Morikawa, Jun. Japan and Africa: Big Business and Diplomacy (London: Hurst & Co, 1997). lx Wild, Leni et. al. Informing the Future of Japan’s ODA: Japan’s ODA with an African Context. Overseas Development Institute. October 2011. lxi Debt Relief by Donor Countries. OECD DAC CRS. 2015. lxii Sato, Makoto, ‘An historical analysis of Japan’s aid policy in Africa’, in Howard P. Lehman (ed) Japan and Africa: Globalization and foreign aid in the 21st century (London: Routledge, 2010). lxiii Tembo, F. Where Next for TICAD: Building Lasting Partnerships. Background Note. Overseas Development Initiative. May 2008. lxiv Ministry of Foreign Affairs (MOFA). TICAD V: Hand in Hand With a More Dynamic Africa. March 2013. lxv Ministry of Foreign Affairs (MOFA). TICAD V: Hand in Hand With a More Dynamic Africa. March 2013.
77
lxvi Ministry of Foreign Affairs (MOFA). TICAD V: Hand in Hand With a More Dynamic Africa. March 2013. lxvii Ministry of Foreign Affairs (MOFA). TICAD V: Hand in Hand With a More Dynamic Africa. March 2013. lxviii Matsutani, M. The Evolution of TICAD since its inception in 1993. The Japan Times, Jun, 2013. http://www.japantimes.co.jp/news/2013/06/01/world/the-evolution-of-ticad-since-its-inception-in-1993/#.Vfg0zJ2eDGc lxix JICA document on TICAD V agenda and commitments. September 2014. lxx Fact Sheet. “Debt Relief for Heavily Indebted Poor Countries (HIPC) Initiative. International Monetary Fund. September 2015. https://www.imf.org/external/np/exr/facts/hipc.htm lxxi Evaluation of the International Citizen Service: Phase 1 report. December 2013. Government of the United Kingdom lxxii “India-Japan Relations”. Ministry of External Affairs. Government of India. http://www.mea.gov.in/Portal/ForeignRelation/Japan_-_July_2014_.pdf lxxiii “India-Japan Relations”. Ministry of External Affairs. Government of India. http://www.mea.gov.in/Portal/ForeignRelation/Japan_-_July_2014_.pdf lxxiv “India-Japan Economic and Commercial Cooperation”. Embassy of India in Tokyo. http://www.indembassy-tokyo.gov.in/bilateral_brief.html lxxv “Concessional Duties for Imports from Selected African Countries under DFTP Scheme” Focus Africa. National Centre for Trade and Investment. http://www.focusafrica.gov.in/DFTP_Scheme.html lxxvi Whitehead, E. “Lessons from Brazil in Mozambique’s Nicala Corridor.” This is Africa. February 2013. http://www.thisisafricaonline.com/Business/Lessons-from-Brazil-in-Mozambique-s-Nacala-Corridor?ct=true lxxvii “About the Program”. ProSavana. Government of Mozambique. http://www.prosavana.gov.mz/ lxxviii Hanna, J. “Abe: Profound Grief for WWII, but Japan can’t Keep Apologizing”. CNN. August 15, 2015. http://edition.cnn.com/2015/08/14/asia/japan-wwii-abe-apology/
