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MOFA to return 10 billion yen of overseas development aid to national treasury

  • December 30, 2021
  • , Yomiuri , p. 4
  • JMH Translation

The Ministry of Foreign Affairs (MOFA) has decided to suspend the government’s grant-in-aid overseas development assistance (ODA) projects that are not expected to make progress and return the funds for such projects to the national treasury. The total amount to be returned is expected to reach about 10 billion yen. The funds will be returned after approval by the partner countries.

 

Grant-in-aid assistance is aimed at supporting the development of infrastructure (social capital) in developing countries. MOFA transfers the funds to the Japan International Cooperation Agency (JICA), and JICA then provides the funds to operators through partner countries. Since projects span multiple years, a certain amount of such funds is held at JICA.

 

MOFA was holding 196 billion yen worth of funds as of the end of 2020. It was decided that no progress could be expected on projects for which a certain period of time had passed since approval. Such funds account for about 10 billion yen of the total 196 billion yen. Most of these funds are “for projects that are not likely to be completed due to the impact of COVID-19 and political changes in the partner country,” according to a top MOFA official. The issue of JICA’s stagnant funds was raised at an October 2021 Ministry of Finance meeting, and MOFA had been considering how to improve the situation.

 

The government’s initial budget for FY2022 included 163.3 billion yen for grant-in-aid assistance, an increase of 100 million yen from the previous year. The amount was increased due to the support of the ruling parties, who were concerned about the decline in Japan’s diplomatic power.

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