A Call for Long-term Government Investment

Still, seen against the total volume of Japanese ODA, the flow of funds to Japan’s international aid NGOs is no more than a tiny trickle. Supporters of ODA-NGO collaboration have managed to protect these allocations in the face of intense pressure to slash ODA spending overall, but the rate of growth has slowed. Out of Japan’s total fiscal 2011 ODA budget of ¥572.7 billion, only ¥7.3 billion, or about 1.3%, was allocated to support NGOs programs for developing countries or to expand NGOs’ capacity. I believe the government must boost this ratio to between 10% and 20% in the not-so-distant future if it wants to realize the full potential of our NGOs to improve the cost performance of ODA and turn the concept of “aid with a face” into a reality on the ground. In the meantime, it should move quickly to increase allocations for NGOs to at least 5% of the ODA budget.

Needless to say, if NGOs are to undertake more ambitious programs at the government’s expense they will need to demonstrate a commensurate operational capacity, as well as strict fiscal accountability. The government will doubtless be obliged to apply more rigorous criteria when selecting NGOs to deliver such aid and to monitor their operations more carefully. But the project capacity of Japan’s NGOs has continued to increase over the past two decades. My own NGO, Peace Winds Japan, has already undertaken a number of projects with budgets in the billions of yen. Needless to say, we submit our internal operations to external audits and maintain complete financial transparency.

By contrast, established international organizations seem to receive the benefit of the doubt when it comes to ODA allocations. A senior Foreign Ministry official whom I have known for many years has expressed serious doubts about the efficacy of much of the foreign aid provided through UN agencies and similar international organizations. Certainly the work carried out by such agencies does little if anything to raise Japan’s profile or enhance its image at the local level. This is not to suggest that all such spending is wasted, merely that the Japanese government should consider redirecting a portion of it to Japanese NGOs with the capacity and desire to undertake large-scale projects.

Another obstacle to be overcome is current restrictions governing the use of ODA funds. Implementing an aid project in a developing country entails both direct costs and administrative expenses, including office maintenance and certain personnel costs incurred by staff at the organization’s headquarters. Currently the government regards only a portion of these expenses as a legitimate use for ODA grants or subsidies. As a result, NGOs are obliged to shoulder substantial costs using its own resources. The strain this places on organizational finances increases along with the scale of a project, posing a difficult dilemma for international NGOs. To expand NGO-channeled aid without imposing an impossible burden on these nonprofits, the government should allow them to claim administrative expenses amounting to 10%–15% of the project’s total budget.

Deploying the Model Regionally

My current focus is on building a regional framework for mutual aid during major disasters by extending the JPF mechanism to other parts of Asia.  The Asia Pacific Alliance for Disaster Management (APADM) was established in 2012 with the participation of five countries: Japan, the Philippines, Indonesia, South Korea, and Sri Lanka. The secretariat is located in Japan, and the Japanese government has thus far pledged ¥300 million in funding.

Under the APADM framework, each participating country will establish its own cross-sector platform comparable to JPF, and these national platforms will cooperate and assist one another. The hope is that collaboration between the government, private, and nonprofit sectors will yield a synergistic effect in respect to both fundraising and operational efficacy. JPF collected more than ¥7 billion in contributions from the private sector in the aftermath of the 2011 Great East Japan Earthquake and tsunami. If we can get the fast-growing businesses of Asia’s emerging markets involved in this undertaking, it will allow us to tap into a valuable resource for regional disaster management.

As with JPF, the initial focus of APADM will be responding to natural disasters, an urgent and common imperative for the nations of this region. In time, however we hope to broaden the organization’s scope to encompass other humanitarian emergencies, such as those resulting from regional conflicts. One long-term goal is to build the region’s capacity to cope with a massive exodus of refugees in the event of the collapse of the current North Korean regime. Ultimately, we are hoping to expand our mandate to encompass conflict prevention, protection of ethnic minorities, and gender issues, mirroring the role of the Organization for Security and Cooperation in Europe.