10% Cut In Japans Foreign Aid Budget To Hit India, China

India, China and Indonesia are likely to start feeling the pinch next year when Japan slashes its foreign aid budget by 10 per cent as part of Prime Minister Rutaro Hashimotos three-year austerity programme, which has received a ringing endorsement from Japanese industrialists.

Major Asian countries like India, China and Indonesia are heavily dependent on Japanese aid.

Agencies like the World Bank and the Asian Development Bank are also heavily dependent on Japanese contribution which shrank cosniderably last year. The western sources of bilateral aid are also slowly drying up.

The federation of economic organisations (Keidanren), which helps form the nations economic policy and strategies for conservative liberal democratic party (LDP) governments, believes strong political leadership is essential to the success of the governments austere fiscal programme which envisages massive budget cuts from next year.

 

Keidanren chairman Shoichiro Toyoda, who is also the head of Japans largest automobile maker Toyota, personally endorsed the Prime Ministers fiscal discipline that calls for $ 20 billion budget cut starting in 1998.

Toyoda himself heads the fiscal system council that advises finance minister Hiroshi Mitsuzaka. He met the minister prior to the councils meeting on Wednesday when he was briefed on the proposed cuts.