Japan Boosts Spending for Poor Nations : Biggest Increase in Six Years Will Also Bolster Armed Forces

Japan today announced its biggest increase in government spending in six years to meet international demands that it give more to poorer nations, and to strengthen its armed forces.

Budget guidelines announced by Finance Minister Kiichi Miyazawa and approved at a Cabinet meeting showed there will be a 9.4% increase in Overseas Development Assistance in the year starting next April.

“The increase in ODA was fairly large in line with Japan’s international pledge,” Miyazawa said.

Prime Minister Noboru Takeshita told the Summit of Industrialized Democracies in Toronto in June that Japan would lead a campaign to help some of the poorest countries wipe out their burden of debt.

Political analysts have linked Japan’s new confidence in its ability to set international policy to its realization that it cannot take shelter forever under the wing of the U.S. armed forces.

Miyazawa announced that the 1989-90 budget would allow military spending to grow up to 6.1% as Japan continues efforts to increase its defense capability.

Aid and defense are among only six special categories to escape rules under which departments must cut spending by at least 10% from the previous year.

The Japanese government has been trying for several years to cut back a national debt that in real terms is almost as bad as the huge budget deficit hanging over the United States.

For this reason, moves to reflate the Japanese economy by extra government spending to help world economic growth, which was done this year and last year, will be stopped next year.

The Japanese economy is expanding steadily and does not require additional measures to stimulate it, Finance Ministry officials said.

The ministry’s guidelines provide agencies and ministries with a firm indication of how much they may ask for in their budget requests, which are due next month.