The Tokyo International Conference on African Development (TICAD) is held by Japan’s government every five years. When it started in 1993, only five African heads of state attended. By 2008, TICAD IV had ballooned to around 7,000 participants from 51 countries, Japanese ministries, NGOs, and multilateral institutions, and pledged a funding increase to US$1.8bn. Impressive figures – but is this commensurate with the role that Japan plays on the continent? Andrea Bohnstedt speaks to Japan’s ambassador to Kenya, Shigeo Iwatani.
Show Me the Money
The 2008 TICAD IV took place shortly before the G8 meeting in Hokkaido and produced the Yokohama Declaration and Yokohama Action Plan. Since the UK’s 2005 G8 meeting, ‘Africa’ had been a must-have agenda item for the G8. And so, reminiscent of the pledges made in 2005, TICAD IV announced a doubling of Japan’s official development assistance (ODA) over the coming five years to US$1.8 billion. Spending priorities comprise different clusters:
- Regional infrastructure development: Regional road networks, improving cross-border procedures, and energy infrastructure have been singled out.
- Agriculture and emergency food support: An immediate allocation of US$100m has been made available for emergency food aid globally, but the bulk of this funding is expected to go to Africa. Japan also wants to help improve agricultural productivity, especially in rice production.
For both areas, funding of up to US$4bn in ODA loans will be made available. Japan’s government has also committed to social programmes in community development, education, healthcare and water.
Japan’s ambassador to Kenya, Shigeo Iwatani, emphasizes that the TICAD conferences may be one-off events, but are linked together through detailed preparation and follow-up mechanisms to ensure that a tangible five-year plan emerges from each summit, and that these pledges are implemented in the time until the next conference.
Aid as Usual
TICAD may have grown into a grand event, but essentially, in its efforts to establish itself as a framework for development in Africa, it is doing more of the same: The country’s Africa ODA remains firmly anchored within what has coalesced as the international community’s approach, i.e. Millenium Development Goals (MDGs) as key benchmarks and often working through established multilateral organisations as the UN, UNDP, and the World Bank – basically, it is business as usual, or rather aid as usual.
Of course, on the surface this appears sensible – rather than re-inventing the wheel, Japan works together with the established players to create synergies and focus international efforts. As every other multi- or bilateral donor, Japan emphasises the spirit of co-operation and partnership with the recipient country.
However, this approach gives short shrift to a question that, in recent years, had been drowned out by the popstar-led push for more and unconditional aid whether the existing aid-based system in and for sub-Saharan Africa actually makes sense.
Getting Down to Business in Kenya?
Iwatani himself noted that African leaders had explicitly asked for trade and investment rather than aid. Here, Japan’s engagement is a considerably more cautious than the country’s ODA agenda. To date, with Toyota, there is only one sizeable Japanese company in the EAC and some construction and trading firms have liaison offices. Iwatani says that Japan is in a dialogue with the Kenyan government to improve the investment environment, flagging what is the standard catalogue for Kenya: Corruption, excessive bureaucracy, security concerns, problems with obtaining work permits and, of course, the country’s failing infrastructure.
A quick look at Japan’s trade and business relations in Kenya’s key industries:
- Japan’s imports of cut flowers from Kenya are increasing rapidly, but Kenyan companies struggle with quarantine issues. Around 60% of all flowers currently arriving in Japan are rejected because they fail to meet phyto-sanitary standards. Kenya’s government has suggested sending a team to Japan to discuss this problem with the Ministry of Agriculture, and there are also proposals to establish an inspection unit in Kenya to check the produce before it leaves the country.
- Kenya’s coffee and tea are quality products, notes Iwatani, but Japan’s consumers are not yet very familiar with them. While value addition in Kenya is clearly a concern for Kenyan business, Iwatani also suggests that more marketing of these products in Japan is necessary.
- Even if the political crisis in early 2008 led to a temporary slump in arrivals, tourism is a booming sector in Kenya, but visitors from Japan are but a trickle: Iwatani estimates that only 15,000 tourists from Japan make their way to Kenya every year – next to nothing compared to the more than 2m total arrivals in 2007. Industry insiders also notes that Japanese tourists are typically highly concerned about health, safety and security issues, and are therefore less likely to come to Africa.
There are, to date, no direct flights to Japan, which also impedes the traffic of cargo, although much of it now goes through Dubai rather than Europe, which is an improvement. Kenya Airways has flights to China, including Hong Kong, but Japan’s main airports are very congested, suggesting that opening up a direct route could be challenging. Tourism is also affected by the lack of direct flights: With a very limited number of holidays per year, the long travel time makes East Africa a less attractive destination.
Does Iwatani expect direct investment from Japan anytime soon? There are some cautious efforts to encourage this: A business mission from Japan, consisting of government officials and private sector representatives, is planned for September to give participants a better idea of the conditions on the ground – according to Iwatani, few Japanese companies really have a good understanding of the opportunities in Africa in Japan, and perceptions of Kenya are still dominated by the reporting on the political crisis in January and February 2008 and the electoral violence.
However, Iwatani himself does not expect Japanese corporates to roll up their sleeves and get down and dirty anytime soon: Manufacturing in Kenya, he says, is not profitable because of the high costs. Most Japanese firms are high-tech companies for whom Kenya would neither be a suitable production environment nor would it offer a large enough market for their products. In any area where labour costs are crucial, Iwatani reckons Japan cannot compete with China. The Japanese Bank for International Co-operation (JBIC) has set up a US$2.5bn investment facility for Africa, but this money is intended for Japanese firms investing in Africa, and African firms are not eligible.
Outlook
In the current reordering of Africa’s international relations, Japan’s approach suggests that the country will remain a polite bystander, despite its grand conferences – and perhaps flying dozens of African delegations to Japan is indicative of its reluctance to get involved on the ground. Popstar requests for more aid for Africa notwithstanding, recent trends across the continent indicate that business interests will nudge aside the importance of aid. As a consequence, Japan’s strong focus on aid and ODA in the established framework alongside their still cautious approach to business and investment will limit their role on the continent. Neither do they have the established ties of former colonial powers UK and France, nor do they have the aggressiveness of emerging market companies and governments that have entered the competition for Africa’s natural resources and markets.
Claire Innes, Manager of the Asia-Pacific Group of global country intelligence and forecasting firm Global Insight, concurs: ‘The scale of the event will be face-saving prestige: Japan is still the second largest economy in the world, but its political clout has always lagged behind because of its effective neutering as an international power following WWII. However, it is trying to develop a more internationalist and more muscular foreign policy to counter the challenge of China (and to a lesser extent India) and to offset the gradual downscaling of U.S. troops in Japan which will effectively dismantle its position as a U.S. 'client' state. Japan has always tied developing economic links with countries with ODA, which is often tied with contracts for Japanese firms allowing them to gain access to the economy that way In economic terms, there is less synergy between the Japanese economy and African economies as production is more concentrated in high tech goods while manufacturing is down.’
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