Japan’s Quiet NGO Revolution: Toward a Cross-Sector Model of Foreign AidPolitics
I have been delivering international aid through the work of nongovernmental organizations for just about two decades now. I have assisted refugees in conflict-torn areas from northern Iraq and Afghanistan to southern Sudan and provided relief to victims of natural disasters from Pakistan to Indonesia and the Philippines. Altogether, I have worked in 26 countries, including Japan.
During these past 20 years, I have witnessed a dramatic change in the relationship between Japan’s official development assistance program and Japanese NGOs active overseas. When I first started out as a humanitarian aid worker in northern Iraq, the amount of ODA funding available to NGOs for emergency relief was negligible. The government had established a basic mechanism for financial support under its NGO Project Subsidy program, but the level of funding was paltry, and applications took so long to process that the money almost never came through in time to assist our emergency efforts in the field.
The tide began to turn during the 1999 conflict in Kosovo. Under the leadership of Prime Minister Obuchi Keizō, for whom ODA-NGO collaboration was a cherished goal, the government responded to mounting pressure from Japanese NGOs and instituted an “emergency NGO grant aid” system, under which nonprofits could receive up to ¥50 million per project on an expedited basis for overseas emergency relief operations. I remember the rejoicing at our Kosovo field office when we received a late-night call from the Ministry of Foreign Affairs to let us know that the new emergency grant system was up and running.
Building a Cross-Sector Platform
This was a step forward, but it was still far from adequate. I proposed a new mechanism to combine and coordinate the resources of the government, business, and nonprofit sectors for more effective and efficient relief efforts. The result was the establishment of the Japan Platform (JPF), a consortium of NGOs, government agencies, and businesses dedicated to international humanitarian aid.
The JPF is a cross-sector organization designed to enhance the speed and quality of Japan’s emergency assistance. It provides a mechanism for pooling funds from ODA grants and charitable contributions from businesses and delivering them rapidly to NGOs to provide emergency relief in the field. Member NGOs also contribute a percentage of the operational funds they raise via member dues and donations. In addition to facilitating funding, the JPF system creates a platform for pooling information, technical expertise, and personnel from a broad range of social actors, including universities, private foundations, and the media.
JPF currently has 48 member NGOs. Over the past 14 years it has provided more than ¥22 billion in ODA funding to support the aid efforts of Japanese NGOs. As a result, the ODA is a far more familiar and benevolent presence within Japan’s NGO community than it was two decades ago. On a global level as well, JPF has improved the response time of Japanese NGOs and helped to enhance the impact and stature of Japanese ODA within the international aid community.
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.
Lead the Way Toward a New Regional Architecture
The framework we envision is not unlike the “regional architecture” that former Secretary of State Hillary Clinton described in a speech delivered at the East-West Center in Honolulu on January 12, 2010. In her remarks Clinton said, “The United States . . . plays a central role in helping to deal with the difficulties that individual states and this region confront. This new landscape requires us to build an institutional architecture that maximizes our prospects for effective cooperation, builds trust, and reduces the friction of competition.” The Trans-Pacific Partnership is perhaps the best-known example of the kind of regional framework the US administration has in mind.
Meanwhile, the shifting balance of power between the United States and China in the Asia-Pacific is bringing about major changes in the region’s political, economic, and security climate. To protect its own interest in the midst of this upheaval, Japan can no longer be content to ride on the coattails of another power. It must take the initiative and lead the way in setting a direction for the emerging regional community. Teaming up with other countries with whom we share interests and values to create our own regional architecture is an effective way to go about this, and it can also strengthen our security system by adding additional layers of cooperation.
To this point, the relationship between ODA and NGOs has been defined on a project-by-project basis, with the government providing financial support for specific programs planned and carried out by NGOs. This is a positive development as far as it goes, but it seems to me that investment in a new nongovernmental framework like APADM should also be a major ODA priority. This would be an efficient means of building the sort of international framework that could help preserve the independence of Japanese foreign policy. Such a framework would also maximize access to private-sector resources and contribute to the speed and flexibility of foreign aid through the involvement of people from the private and nonprofit sectors.
Another task of vital importance to the future of Japan’s international cooperation efforts is human resource development. I launched Peace Winds Japan in 1996, the year after the 1995 Kobe earthquake. It was a time of unprecedented volunteer activity among Japanese young adults, whom the media dubbed the “Kobe generation.” The Tōhoku earthquake and tsunami of 2011 triggered another surge in volunteerism and charitable donations. Interest in social enterprises, NGOs, and other philanthropic groups has soared to new highs. In short, the tragedy of the earthquake and tsunami has given birth to the “Tōhoku generation,” a pool of human resources with an unprecedented orientation toward public service. How well we tap into and train this generation will have a huge impact on the future of Japan’s performance in the field of international cooperation.
(Originally written in Japanese on July 18, 2014. Title photo: Peace Winds Japan at work. Photos courtesy of PWJ.)