Japan lays out new aid policy for Vietnam
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Channel NewsAsia

June 3, 2004 Thursday

HANOI: Japan, Vietnam's biggest aid donor, will link future aid for the communist nation to a series of benchmarks that include respect for human rights and its investment climate.

Mitsuru Kitano, minister at the Japanese embassy in Hanoi, said that under Tokyo's new official development assistance (ODA) charter, the size of its annual aid pledge to Vietnam would depend on five elements.

One of these, he said, includes the "principles" of respect for human rights and the environment, as well as progress made by the Vietnamese government towards democracy and a market economy.

The new aid programme would also take into consideration the overall bilateral relationship and Vietnam's "policy and institutional environment".

Although Japan is the third largest investor in the country, investment ties were strained in 2002 when Hanoi slashed import quotas on motorcycle parts, forcing Japanese manufacturers Honda and Yamaha to temporarily suspend production at their Vietnamese factories.

Alarm bells were set off again in Tokyo last year after Hanoi announced a series of tax hikes on foreign-invested vehicle manufacturers.

Kitano said the other factors that will be taken into account when determining assistance for Vietnam are its development needs and its "absorption capacity of development aid".

Japan has repeatedly expressed its frustration at the slow disbursement of aid and warned last December at the annual meeting of donors to Vietnam that it could cut future donations unless Hanoi picks up the pace.

Kitano said that although Japan had taken into account such issues in the past, for the first time the size of Tokyo's annual aid pledge will be directly linked to these five "ODA elements".

"Although our old ODA charter has always addressed these issues, the linkage of these five elements to the actual size of our ODA is new," he told AFP in a telephone interview.

"We will make a systematic examination of our ODA to Vietnam in relation to these principles."

His comments came as Vietnamese Prime Minister Phan Van Khai, speaking in Tokyo, called for stronger regional cooperation to help poorer nations develop.

In December, Japan announced that it would maintain its 2003 level of funding for this year, pledging 91.74 billion yen (846 million dollars).

This came despite cuts in Tokyo's overseas aid budget over the past few years and amounted to nearly 30 percent of the total amount pledged by donors to help poverty reduction and economic growth efforts in Vietnam.

Japan has traditionally been reticent about linking human rights concerns to its vast international aid programme but last May it cut off new aid to military-ruled Myanmar after it detained democracy icon Aung San Suu Kyi.

The ban was partially lifted in August to provide emergency and humanitarian aid but Tokyo has said it will not resume large-scale assistance to the country unless it sees an improvement in the situation there.

Kitano was not able to comment on whether Japan's ODA to Vietnam for 2005 could be cut as a result of continuing international concerns over its human rights record but he said that the issue would be taken into account.

"Are we going to pay attention to human rights (in Vietnam)? Yes we will," he said.

At the donors meeting in December, the European Union stressed the "promotion and protection of human rights should go hand-in-hand with the sustainable development of a country," while the United States urged "greater tolerance of dissent".

- AFP