Japanese and Chinese Aid Strategies in Southeast Asia
4.4 Japanese and Chinese Aid to Southeast Asia
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particularly Yunnan and Guangxi, to Southeast Asian Mekong basin countries by supporting financially the construction of North-South corridors and highways under the GMS cooperation.
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is a major donor to both Myanmar and Cambodia. While Japan’s ODA to Cambodia was focused more on grant programs, China’s aid was largely in the form of loans (interest-free and concessional).
Table 9: Chinese and Japanese aid to selected ASEAN countries, (various years in US dollars)
China Japan
Cambodia:
Grants (2000-09) Interest-free loans (2009) Concessional loans (2000-08)
204.41 million+ 74.80 million+ 500.00 million+
1018.7 million (includes Technical Assistance) None
60.81 million (ODA loans) Laos:
FY2000-08 123.47 million^ 768.44 million Myanmar:
FY2000 FY2005
186.70 million* 289.80 million*
51.78 million 25.49 million Vietnam:
FY2000 FY2005
87.50 million* 299.20 million*
923.67 million 602.66 million Indonesia
FY2005 534.60 million* 1223.13 million Philippines:
CY2008 (Jan.-Dec) 1110.00 million# 470.68 million
Sources: *Kobayashi (2008); +Chap (2010); ^Syviengxay (2010); #National Economic and Development Authority, Philippines (NEDA) (2008); Figures for Japanese aid are cumulative consisting of grants, technical assistance and loans for each year, compiled by the author from various edition of ODA White Paper
China’s historical connection with CLMV as well as its interest to successfully develop its western region as discussed above provides implicit reasons for Chinese aid appropriation in those countries. Nonetheless, the case of the maritime countries (the Philippines and Indonesia) requires further elaboration. It can be argued that at least in these two cases, Chinese aid carried explicit strategic/diplomatic and commercial/economic goals. China’s aid strategy was part of a broader effort to improve bilateral ties with both countries following years of hostility and suspicion in the past. China’s support for local communist insurgents in Southeast Asia in the 1950s/60s had left a legacy of distrust in Indonesia during the Suharto era and in the Philippines
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when the Maoist-based Communist Party of the Philippines (CPP) was formed in 1968.
Unresolved territorial disputes between China and the Philippines had occasionally led to severed bilateral relations. Table 9 indicates that, for a while, the Philippines seemed to be the largest beneficiary of Chinese aid in the region. While difficulties in their bilateral relations remain, economic interdependence has progressed. In 2011, China is the third largest trading partner of the Philippines after the United States and Japan with trade volume amounting to US 12.3 billion dollars (NSCB website). Many cooperation deals were also signed after 1999 especially in agriculture sector.
Figure 14: Japan’s ODA to selected ASEAN members (2006-10in US$ million)
Source: Compiled by the author from various issue of Japan’s ODA White Paper
Since 2000s, China has offered financial assistance in various forms to the Philippines from humanitarian aid for typhoon victims to grants and concessional loans. A number of projects funded supposedly by loans from China were monumental including the US 329.5
0 1000 2000 3000 4000 5000 6000 7000
Loans Grants TA Loans Grants TA Loans Grants TA Loans Grants TA Loans Grants TA Loans Grants TA Loans Grants TA Loans Grants TA
Cambodia Laos Myanmar Vietnam Indonesia Malaysia Philippines Thailand
2010 2009 2008 2007 2006
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million dollars allotted for Philippine National Broadband Network (NBN) project and the US 400 million dollars, which represented the first tranche of loans to finance the North Rail project.
But while Chinese economic cooperation helped to cement ties with Cambodia, as a form of China’s regional ‘charm offensive’ it failed in the Philippines. Instead, the two Chinese flagships in the Philippines were mired with controversy which culminated to the filing of three graft cases against former president Gloria Macapagal-Arroyo. Moreover, China’s increasingly aggressive stance toward the South China/ West Philippine Sea has been viewed widely among Filipinos as
‘creeping invasion’ of the Philippine sovereignty.
In stark contrast, although concentrated largely in Vietnam, Japanese aid to Mekong- basin countries from 2006 to 2010 was more balanced, when counted in terms of number of cases/projects rather than by volume, and reflected the interests of all stakeholders in the region.
Figure 11 below indicates that, during this period, Japan gave high importance to international aid agenda in its ODA allocation to CLMV. Of the 228 cases, support for projects related to climate change adaptation/mitigation and basic human needs collectively represented 34 percent of the total. This is almost comparable to the sector that traditionally received high priority in Japanese aid, infrastructure, at 35 percent. The JICA Annual Report of 2012 (p. 29-30) declares that social and economic structure would remain the top priority of Japanese ODA to Cambodia as the country seeks to integrate itself to ASEAN. For Laos, “JICA’s aid approach is centered on support for the achievement of the MDGs and for building a foundation for economic growth that will be a driving force for the country’s self-reliant and sustainable growth” (p. 30).
In light of the on-going political and economic reforms in Myanmar, Japanese ODA would be used to support the reform efforts of its government and to enlarge the scope of Japan’s aid programs while continuing the existing priorities on supporting basic human needs. The
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sectors under consideration for inclusion are health, agriculture and economic infrastructure (JICA Annual Report 2012, p. 30). In the case of Vietnam, JICA maintains that Japan’s ODA would be used to support the country’s goal of improving national competitiveness and support for the creation of strategic industry. Vietnam is also the only country among CLMV to receive ODA under the PPP scheme for its Lach Huyen Port Infrastructure Construction Project and the first to receive ODA loan for satellite procurement (p. 30).
Figure 15: Japanese Aid to CLMV by Priority Sector (project-based, 2006-10)
Notes: hard and soft infrastructure includes scholarship grants; Climate change mitigation includes flood- mitigation related projects; Basic human needs include MDG targets. Source: Compiled by the author from MoFA data, excludes technical cooperation projects.
35%
21% 13%
31%
0% Hard and soft
Infrastructure Climate change adaptation/mitigation Basic human needs Assistance for NGOs/ and grassroots projects others
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