WHA A/S SHANNON'S APRIL 11 MEETING WITH MOFA

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 002061

SIPDIS

SIPDIS

DEPT PLEASE PASS USTR FOR CUTLER, NEUFFER

E.O. 12958: DECL: 04/17/2026
TAGS: PREL ETRD ECON EINV EAID APECO XR XK LA CH
JA
SUBJECT: WHA A/S SHANNON'S APRIL 11 MEETING WITH MOFA
ECONOMIC COOPERATION DDG SUGITA

REF: A. TOKYO 2008

B. TOKYO 1960

C. TOKYO 1959

Classified By: Deputy Chief of Mission Joe Donovan. Reason: 1.4 (b)(d)
.


1. (C) Summary. During a April 11 meeting with WHA A/S
Shannon, MOFA Economic Cooperation Bureau DDG Sugita
discussed Japan's ODA efforts in Latin America. He described
difficulties increasing aid to the region due to Japan's
traditional focus on Asia and poverty-alleviation efforts in
Africa. He explained Japan's current efforts focusing on
regional integration, security-related assistance and
cooperation among donors. A/S Shannon urged more Japanese
involvement and welcomed opportunities to coordinate. End
summary.


2. (C) During a April 11 meeting with WHA Assistant Secretary
Thomas Shannon, MOFA Deputy Director General for Overseas
Assistance Nobuki Sugita conceded there are challenges for
Japanese ODA in Latin America. Japan's ODA is focused on
Asia for geographic reasons, with Africa next, due to the
extreme poverty there. In contrast, Latin America is remote
from Japan, has many middle-income countries, and lacks the
extreme poverty found in Africa. Moreover, due to budget
constraints, overall Japanese ODA has been declining as well.
Sugita said he would like the reverse this trend, but the
budget is controlled by the powerful Ministry of Finance.
The ODA budget for technical and professional assistance to
Latin America stands at US$700m per year. Official lending
is currently negative, with more loans being repaid than new
monies being loaned. A/S Shannon said he understood the
challenges for Japan in providing aid to Latin American.
Despite the existence of some wealthy areas, a high level of
social stratification remains, and the reforms to address
these social issues are critical for the success of democracy
in the long term.


3. (C) Sugita said Japanese ODA is moving toward increased
emphasis on regional efforts, especially in the area of
infrastructure development and environmental programs. This
includes support for regional integration in Central America,
where ODA spent in one country positively impacts neighboring
countries. For example, when JICA holds technical training
courses in the region, they invite participants from
neighboring countries to spread the benefits of the
information transfer. A/S Shannon echoed the importance of
regional integration, citing the U.S. focus of its resources
on encouraging integration in the Andean and Caribbean
regions. The U.S. also favors development projects that
attract foreign investment, he explained.


4. (C) Japan is assisting with road building for the Plan

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Puebla Panama (PPP),Sugita noted. Shannon said this helpful
assistance project is an excellent example of how various
types of engagement can contribute to effective development.
In the PPP case, an FTA between the U.S. and Central American
countries reinforces the value of infrastructure development,
and ODA for capacity building allows local people to exploit
the new opportunities. Such an approach, he added, can be
both effective and have a visible impact.


5. (C) Sugita noted the importance of security to poverty
reduction and social stability, citing Haiti and Colombia as
examples. A/S Shannon observed that the United States is
also highlighting security, and encouraged Japan to support
reintegration of gang members/illegal combatants in Haiti and
Colombia. In the past, the United States has focused its
development assistance on governance, rule-of-law, dispute
resolution, and similar efforts to encourage social stability
and create a positive development environment. One drawback
to this approach is that citizens find it difficult to draw
the connection between the aid and a direct benefit to their
lives. The United States, he added, is now seeking ways to
show we are working to make a positive, tangible impact on
people's lives. Sugita echoed the desire for making a
visible contribution, noting that the public diplomacy effort
is a critical part of ODA.


6. (C) A/S Shannon also emphasized the increasing importance
of partnership programs that link to the private sector to
public programs, especially as ODA budgets have been
declining. The amount of ODA in Latin America is dwarfed by
private sector investment and remittances. He said ODA
should act as a catalyst for development and FDI. Sugita
echoed this idea, pointing to Japanese infrastructure
assistance in the East-West Mekong Corridor as an example.
He also said their focus is increasingly moving from physical
to "soft" infrastructure, through projects assisting with
customs streamlining, attracting FDI and tourism development.



7. (C) Japan is also increasing its emphasis on coordinating
with other donor countries for more effective delivery of
assistance, Sugita commented. He looks forward to hearing
more specific ideas from the U.S. on how the two countries
can coordinate more projects. A/S Shannon agreed that such
coordination is useful to avoid duplicating work and for
tracking donor activities.


8. (C) Sugita remarked that Japanese thinking toward ODA is
also moving toward a more overall strategic approach.
Japanese ODA has three ties - the strategic level (directed
by the Prime Minister and the Cabinet),the policy level
(coordinating the efforts of government ministries),and the
implementation level (loans, MOFA grants, JICA activities).
Increasingly, Japan's policy makers are viewing ODA from a

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strategic perspective to enhance the effectiveness of their
overall foreign aid policy.

9.(U) Assistant Secretary Shannon cleared this message.
SCHIEFFER