Japan’s official development assistance (ODA) for 2021 is expected to be the highest on record, exceeding the 1995 figure of 14.4 billion dollars (1 trillion 590 billion yen). Japan is expanding its grants-in-aid for medical devices to Southeast Asia in response to COVID-19. Japan also aims to boost its influence in the global health sector to counter China.
The Japanese government appropriated 1 trillion 735.6 billion yen in its FY2021 budget for ODA, an 11% increase from FY2020’s “net disbursement,” the difference between the amount disbursed and the amount collected from past loans. At present, the government does not expect trends in grant administration to shift during the calendar year.
The Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) calculates changes in developed countries’ ODA expenditures on a dollar basis. According to DAC’s calculation, Japan’s ODA in 2021 is expected to exceed its peak in 1995, barring factors such as depreciation of the yen.
Japan will provide domestically produced U.K. AstraZeneca vaccines to Southeast and South Asian countries free of charge. Japan has also decided to provide cold chain equipment, such as refrigerators and transport vehicles, to Africa and Central and South America.
Japan provided respirators and oxygen concentrators to countries such as India where a variant of COVID-19 spread rapidly. Japan also provided a low-interest loan to Turkey to support the financing of small businesses.
The government will use ODA to further its goal of a “free and open Indo-Pacific.” Japan provided funding assistance to the Philippines for its coastal security system. The Philippines has territorial claims in the South China Sea that conflict with those of China and other countries.
According to the OECD, Japan’s net disbursement ranks fifth globally, behind the U.S., Germany, U.K., and France. The U.S. and European countries increased their assistance to alleviate poverty in developing countries that could become hotbeds of terrorism,
The major recipients of Japan’s ODA have shifted from 1995 to the present. China and Southeast Asia were the major recipients in the past, but former Prime Minister Abe Shinzo informed China that Japan was terminating its ODA for China in 2018.
Japan will utilize loan payments from China and other countries to provide loans to India. Japan is increasing its ODA to populous South Asian countries with an aim to counter China’s “Belt and Road Initiative,” a regional economic scheme.