Japan
We're number two!
May 16th 2002 | TOKYO
>From The Economist print edition
Japan gets knocked down yet another list
IN 1992, as Japan's economy was entering a decade of decline, the momentum of its past success was just beginning to pay off. One pay-off that inspired much pride was the country's rise to the top of the world's aid donors' list, a spot it gained by pipping the United States. The shift, coming just after its military inaction in the Gulf war, inspired many Japanese with a new self image: as wealthy benefactors who would rather fight poverty than wars. Less idealistic Japanese at least hoped for respect and international clout. As Japan's economy limps onward, however, the country keeps finding fresh ways to lose friends and stop influencing people. South-East Asian neighbours are talking of bypassing Japan to form a free-trade area with China, the new star economy on the block. With each new downgrade of its credit ratings, Japan lands in the symbolic company of a more distasteful batch of sovereign borrowers (see article). And now, perhaps worst of all, Japan has lost that top spot on the donors' list that once occupied the top shelf in its trophy case. According to the Organisation for Economic Co-operation and Development, which released its list on May 13th, America increased its overseas development assistance (ODA) to $10.9 billion in 2001, retaking the top spot that it lost in 1992. Japan's foreign aid fell by nearly $4 billion, to $9.7 billion. Part of that drop reflects the yen's 12.7% slide against the dollar, but other factors were also at work. As its public finances unravel and citizens face increasing prospects of belt-tightening, Japan's government is having to rethink aid as well. Last year its ODA fell from 0.28% to only 0.23% of gross national income. This is still more than double America's ratio. But Japan has pledged up to $500m for Afghanistan, and it remains keen to butter up its South-East Asian neighbours. Other poor countries seeking a benefactor may have to look elsewhere.
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