Japan to cut foreign aid budget by three percent

TOKYO, July 19, 2006 (AFP) – Japan plans to cut its budget for foreign aid, long a top tool of Tokyo’s foreign policy, by three percent in the fiscal year starting in April 2007 due to financial constraints, officials said Wednesday. Finance Minister Sadakazu Tanigaki and Foreign Minister Taro Aso agreed on the plan over the telephone, officials who declined to be identified told AFP.

But the foreign ministry plans to fight for a greater aid budget, which has steadily declined over the past decade.

“This is only an agreement on guidelines as required by the finance ministry so we will aim to increase the budget through procedures that continue until the end of this year,” a foreign ministry official said.

In the current fiscal year, the budget for foreign aid was down 3.4 percent at 760 billion yen (6.5 billion dollars), the result of reductions almost every year since 1997 when it stood at 1.17 trillion yen.

Prime Minister Junichiro Koizumi pledged in the last year’s Group of Eight Summit in Gleneagles, Scotland to double the amount of aid to African countries over the three years.

But budgetary constraints have caused frictions between the finance ministry and other ministries including the foreign ministry.