African DevelopmentAfrican Development 　　　　and and 　　 Japan’s PartnershipJapan’s Partnership

Satoru Miyamura, Ambassador of Japan to KenyaJJ/WBGSP Scaling-Up Program Regional ConferenceNairobi, Kenya, Nairobi Serena Hotel, May 11, 2006

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Fundamental Question:Fundamental Question:

““How best can we assist in reducing poverty and How best can we assist in reducing poverty and promoting economic development in Africa?promoting economic development in Africa?

My career relating to African developmentMy career relating to African development 1978-1980 Assistant1978-1980 Assistant to Executive Director for Japan, WB (World to Executive Director for Japan, WB (World

Bank)Bank) 1989-1991 Director in charge of multilateral development banks including 1989-1991 Director in charge of multilateral development banks including

WB, MOF (Ministry of Finance)WB, MOF (Ministry of Finance) 1995-1998 Director of Tokyo Office, WB1995-1998 Director of Tokyo Office, WB 1998-2000 Executive Director for Japan, WB1998-2000 Executive Director for Japan, WB 2004- Ambassador to Kenya, Eritrea, Seychelles, Rwanda, 2004- Ambassador to Kenya, Eritrea, Seychelles, Rwanda, and Burundiand Burundi

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East Asia

Sub-Saharan Africa

Trends in ODA Disbursements of DAC Countries to Asia and Sub-Saharan Africa

Source: Geographical Distribution of Financial Flows 2005 (OECD)

US$ million

ODA : Official Development AssistanceDAC : Development Assistance Committee

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East AsiaSub-Saharan Africa

Trends in GDP per Capita in East Asia and Sub-Saharan Africa

(US$)

(Calendar Year)Source: World Bank Development Indicators 2005 (World Bank)

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Analysis by William EasterlyAnalysis by William EasterlyThe Exclusive Quest for GrowthThe Exclusive Quest for Growth

None of the assistance efforts below has been effective None of the assistance efforts below has been effective in economic growth and poverty reduction . . .in economic growth and poverty reduction . . .

- Assistance in investment, education, and population control- Assistance in investment, education, and population control - Structural adjustment loans- Structural adjustment loans - Debt relief - Debt relief

. . . Because the assistance has been provided without . . . Because the assistance has been provided without attention being paid to attention being paid to incentivesincentives

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New Approach to Development by EasterlyNew Approach to Development by Easterly Measures to enhance growth incentives for the private sectorMeasures to enhance growth incentives for the private sector Promote :Promote : 　　 Democracy and the rule of lawDemocracy and the rule of law 　　 Independent central bank and finance ministryIndependent central bank and finance ministry 　　 Sound macroeconomic policySound macroeconomic policy 　　 Free and fair trade policyFree and fair trade policy 　 　 Good public serviceGood public service　　　　　　 Importation of technology and knowledgeImportation of technology and knowledge

Measures to eliminate growth disincentives for the private sectorMeasures to eliminate growth disincentives for the private sectorRemove : Remove : 　　 High inflationHigh inflation 　　 Black foreign exchange market Black foreign exchange market 　　 Negative real interest rateNegative real interest rate 　　 Big budget deficits Big budget deficits 　　 Taxation on future incomeTaxation on future income

Trade barriersTrade barriers

Factors with negative effects on growthFactors with negative effects on growth 　　 War and internal conflict, corruption, class struggle, ethnic rivalryWar and internal conflict, corruption, class struggle, ethnic rivalry

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Points Emphasized by HattoriPoints Emphasized by HattoriDonor Countries and Recipient Countries:

For the Growth of Africa

Africans have a desire for a better life.Africans have a desire for a better life. Africans act rationally and make self-help efforts to Africans act rationally and make self-help efforts to

realize their desiresrealize their desires.. Donors should think like Africans and work out Donors should think like Africans and work out

development assistance policies that appeal to Africans’ development assistance policies that appeal to Africans’ desire for a better life and for profits. desire for a better life and for profits.

Excessive charity is a vice.Excessive charity is a vice.

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Why does Japan give aid to Africa?Why does Japan give aid to Africa?

BecauseBecause““There will be no stability and prosperity in There will be no stability and prosperity in the world of the 21the world of the 21stst century unless the century unless the problems of Africa are addressed and problems of Africa are addressed and resolved.”resolved.”(words of Japan’s former prime minister Mori)(words of Japan’s former prime minister Mori)

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What Is What Is TICADTICAD ? ?TTokyo okyo IInternational nternational CConference on onference on

AAfrican frican DDevelopmentevelopment Co-organizers Co-organizers : : Japan, the United Nations (OSAA & UNDP),Japan, the United Nations (OSAA & UNDP), the Global Coalition for Africa, and the World Bankthe Global Coalition for Africa, and the World Bank Participants : African countries, G8 countries, Asian countries, Participants : African countries, G8 countries, Asian countries, international agencies, private sector, NGOs, etc.international agencies, private sector, NGOs, etc. TICAD I (1993)TICAD I (1993) 　 　 Functioned as a way to bring the international Functioned as a way to bring the international community’s attention back to Africacommunity’s attention back to Africa

TICAD II (1998) Emphasized the importance of “African TICAD II (1998) Emphasized the importance of “African countries’ ownership and international countries’ ownership and international communities’ partnership” communities’ partnership” TICAD III (2003) TICAD III (2003) Presented the three pillars of African development the three pillars of African development

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Three Pillars of TICAD IIIThree Pillars of TICAD III Consolidation of PeaceConsolidation of Peace Assurance of security; establishment of political governance Assurance of security; establishment of political governance

framework, reconstructionframework, reconstruction 　　 and developmentand development

Poverty Reduction through Economic GrowthPoverty Reduction through Economic Growth Agricultural development, infrastructure development, Agricultural development, infrastructure development,

promotion of trade and investmentpromotion of trade and investment

Human-Centered DevelopmentHuman-Centered Development Health, education, water, food assistanceHealth, education, water, food assistance

Asia-Africa Cooperation (south-south cooperation)Asia-Africa Cooperation (south-south cooperation) Human SecurityHuman Security

Approach

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Progress Since TICAD IIIProgress Since TICAD III TICAD Asia-Africa Trade and Investment Conference (November 2004)TICAD Asia-Africa Trade and Investment Conference (November 2004)

G8 Gleneagles Summit, Message from Prime Minister Koizumi (July G8 Gleneagles Summit, Message from Prime Minister Koizumi (July 2005) 2005) ・・ Commitment to double Japan’s ODA to Africa in the next 3 Commitment to double Japan’s ODA to Africa in the next 3

yearsyears ・・ Promise to strengthen support for health, consolidation of peace, Promise to strengthen support for health, consolidation of peace, 　　　　　　　　　　　　　　 green revolution, and trade and investmentgreen revolution, and trade and investment ・・ Promotion of Asia-Africa cooperation Promotion of Asia-Africa cooperation

Development Initiative (December 2005)Development Initiative (December 2005) ・ ・ Comprehensive approach to create an upward spiral of trade and Comprehensive approach to create an upward spiral of trade and development in developing countries development in developing countries

TICAD Conference on Consolidation of Peace (February 2006)TICAD Conference on Consolidation of Peace (February 2006)

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Trends in Japan’s BilateralODA Disbursements by Region

AsiaAsia

Middle EastMiddle East

AfricaAfrica

Latin AmericaLatin America

OceaniaOceania

EuropeEurope

OtherOther

(Calendar year)(Calendar year)

Note: 1. ODA to the European region since 1990 includes aid to Eastern Europe.Note: 1. ODA to the European region since 1990 includes aid to Eastern Europe. 2. If the repaid amount exceeds disbursements, the figure can be negative. 2. If the repaid amount exceeds disbursements, the figure can be negative.

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My Concerns About My Concerns About Recent Development MeasuresRecent Development Measures

Debt Reduction Debt Reduction - May create moral hazard among HIPCs (Heavily Indebted Poor - May create moral hazard among HIPCs (Heavily Indebted Poor Countries)Countries) - May create a sense of unfairness among non-HIPCs- May create a sense of unfairness among non-HIPCs Budget Support Budget Support - May reduce incentive to collect tax revenues- May reduce incentive to collect tax revenues - May lead to perpetuated dependency on foreign aid - May lead to perpetuated dependency on foreign aid unless there is a proper exit strategyunless there is a proper exit strategy Aid Coordination Aid Coordination - Are there sufficient - Are there sufficient incentives incentives among donors?among donors?

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How Can Japan’s Assistance How Can Japan’s Assistance Be Made More EffectiveBe Made More Effectiveー ー My own thoughts My own thoughts ーー

Except for emergency humanitarian aid, Japan should Except for emergency humanitarian aid, Japan should give aid only for the self-help efforts of the recipient give aid only for the self-help efforts of the recipient country and its citizens.country and its citizens.

Japan should use the lessons learned from its own Japan should use the lessons learned from its own experience in its modernization process, its dramatic experience in its modernization process, its dramatic economic recovery and growth after World War II and its economic recovery and growth after World War II and its development assistance to East Asian countriesdevelopment assistance to East Asian countries..

Japan’s development assistance should reflect the Japan’s development assistance should reflect the assets Japan possesses.assets Japan possesses.

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Examples of Lessons Learned from Examples of Lessons Learned from Japan’s Historical ExperienceJapan’s Historical Experience

・・ Establish strategies and goals for the country throughEstablish strategies and goals for the country through　　 government leadershipgovernment leadership・・ Promote national unity to achieve goalsPromote national unity to achieve goals・・ Import knowledge and technology from developedImport knowledge and technology from developed　　 countriescountries・・ Strengthen the market economy system Strengthen the market economy system ・・ Maintain a sound macroeconomic policyMaintain a sound macroeconomic policy・・ Encourage savings to secure money for investmentEncourage savings to secure money for investment・・ Develop necessary infrastructureDevelop necessary infrastructure・・ Encourage exportsEncourage exports・・ Establish equal employment regulationEstablish equal employment regulation・・ Stress the importance of math and science educationStress the importance of math and science education

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Assets of Japan Possibly Useful for AfricaAssets of Japan Possibly Useful for Africa

Good working spirit and professional ethics Good working spirit and professional ethics Bottom-up approach and consensus in decision Bottom-up approach and consensus in decision

makingmaking Endless endeavor for perfectionEndless endeavor for perfection Good time managementGood time management Public morality to keep the street tidy and cleanPublic morality to keep the street tidy and clean Fondness for peace and harmony with others Fondness for peace and harmony with others