Combating poverty shows complexities of aid allocation

Mitsuo Miura, The Daily Yomiuri, Asia News Network, Tokyo

Aid to Africa is one of the major items on the agenda at the summit meeting of the Group of Eight major nations being held in Gleneagles, Scotland.

Among the top items at the G-8 summit was to find solutions to poverty in Africa that cause riots, civil war, terrorism and infectious diseases.

The G-8, comprising Britain, Canada, France, Germany, Italy, Japan, Russia and the United States, agreed to waive a total of US$40 billion in debt of African countries that are struggling with poverty, and outline a new framework for assistance.

A plan to establish a new international organization comprising affluent countries, including Britain, was also discussed as part of efforts to help Africa.

The hunger and poverty problem in Africa could amplify the regional and economic instability and also destabilize sustainable development of the global economy.

It is important for the international community to assist heavily indebted countries in terms of not only humanitarian assistance, but also security.

Expanding flat debt waivers and untied assistance are temporary measures, and concerns remain that such measures could slow down the flow of new money that is necessary for the development of Africa.

Even though it is urgent to assist with problems such as AIDS, a facile debt waiver could create moral hazard for indebted countries and hamper self-sustained development of African countries.

Compared with Asian countries that thrived economically, African countries were left behind allegedly due to self-reliant economic mechanisms not functioning adequately.

Therefore, international organizations and major industrialized countries need to fully discuss whether their assistance would lead to mid- and long-term economic development.

In assisting African countries, a scheme incorporating feasible socioeconomic development, transparency of fund allocations, development of the export sector and opening markets of industrialized countries, should be discussed as one issue.

International organizations should learn from past mistakes and create a framework to assess management of the economies in aided countries.

Those organizations are also obliged, in conjunction with major industrialized countries, to providing necessary know-how to African countries.

Japan has been successfully helping Asian countries with official development assistance and should maintain the triple assistance framework -- aid, technological cooperation and yen- loans with obligation of repayment -- and map out new aid strategies for African countries.

In recent years, aid has focused on humanitarian and environmental problems.

Many pointed out that assistance should be shifted to expanding aid grants, a direction requested by the international community.

However, to resolve poverty, regional conflicts and infectious diseases, it is necessary to develop socioeconomic infrastructure through mid- and long-term development of roads, electricity, water and sewage systems, and education, as well as immediate assistance.

These are fundamental requirements to promote self-sustaining development and will become the backbone for future development.

In addition, it is vital to place yen-loans at the center of Japan's ODA to maintain discipline in economic development -- to prevent moral hazard and ensure that money borrowed is repaid.

At the same time, it is necessary for Japan to demonstrate leadership and assist poor African countries with other Asian countries that no longer receive Japan's ODA.

We should not turn the summit into a political showcase because of former suzerain countries' ulterior motives.

The international organizations and major industrialized countries should deepen discussion over issues including how assistance can be strengthened from a mid- to long-term perspective.