Aid |
Aid quality is just as important as aid quantity, so the CDI measures gross aid as a share of GDP adjusted for various quality factors: it subtracts debt service, penalizes “tied” aid that makes recipients spend aid only on donor goods and services, rewards aid to poor but relatively well-governed recipients, and penalizes overloading poor governments with many small projects.
Japan’s aid performance
Strengths
- Small share of tied or partially tied aid (6.4%; rank: 10)
Weaknesses
- Low net aid volume as a share of the economy (0.16%; rank: 21)
- Allows project proliferation; small average project size (rank: 26)
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Trade
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International trade has been a force for economic development for centuries. The CDI measures trade barriers in rich countries against exports from developing countries.
Japan’s trade performance
Strengths
- Low agricultural subsidies (equivalent to a tariff worth 4.2% of the value of imports; rank: 3)
- Low tariffs on textiles (5.0% of the value of imports; rank: 2)
Weaknesses
- High tariffs on rice (498.0% of the value of imports; rank: 27)
- High tariffs on wheat (114.5% of the value of imports; rank: 26)
- High tariffs on dairy (82.7% of the value of imports; rank: 24)
- High tariffs on corn (21.6% of the value of imports; rank: 24)
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Investment
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Rich-country investment in poorer countries can transfer technologies, upgrade management and create jobs. The CDI includes a checklist of policies that support healthy investment in developing countries.
Japan’s investment performance
Strengths
- Provides insurance against political risk for both domestic and foreign firms
- Employs foreign tax credits to prevent double taxation of corporate profits earned abroad
Weaknesses
- Negligent in identifying bribery and corrupt practices on the part of home country firms abroad
- Does not support the Multi-Donor Trust Fund for the Extractive Industries Transparency Initiative (EITI)
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Migration
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The movement of people from poor to rich countries provides unskilled immigrants with jobs, income and knowledge. This increases the flow of money sent home by migrants abroad and the transfer of skills when the migrants return home.
Japan’s migration performance
Strengths
- Large share of foreign students from developing countries (77%; rank: 8)
- Tuition for foreign students the same as for nationals
Weaknesses
- Bears small share of the burden of refugees during humanitarian crises (rank: 26)
- Only a small increase during the 1990s in the number of unskilled immigrants from developing countries living in Japan (rank by share of population: 21)
- Small number of immigrants from developing countries entering Japan (rank by share of population: 21)
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Environment
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Rich countries use a disproportionate amount of scarce resources, and poor countries are most vulnerable to global warming and ecological deterioration, so the CDI measures the impact of policies on the global climate, fisheries and biodiversity.
Japan’s environment performance
Strengths
- Low greenhouse gas emissions and fossil fuel production rate per capita (9.3 tons of carbon dioxide equivalent; rank: 9)
Weaknesses
- High tropical wood imports ($23.8 per person; rank: 27)
- High consumption of ozone-depleting chemicals per capita (rank: 25)
- Low gas taxes ($0.59 per liter; rank: 22)
- Poor compliance with mandatory reporting requirements under multilateral environmental agreements relating to biodiversity (rank: 21)
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Security
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Since security is a prerequisite for development, the CDI rewards contributions to internationally sanctioned peacekeeping operations and forcible humanitarian interventions, rewards military protection of global sea lanes, and penalizes arms exports to poor and undemocratic governments.
Japan’s security performance
Strengths
- No arms exports to poor and undemocratic governments (rank by share of GDP: 1)
- Participates in major international security treaties and regimes
Weaknesses
- Small financial and personnel contributions to internationally sanctioned peacekeeping and humanitarian interventions over last decade (rank by share of GDP: 26)
- Provides little protection of global sea lanes that are important to international trade (rank by share of GDP: 17)
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Technology
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Rich countries contribute to development through the creation and dissemination of new technologies. The CDI captures this by measuring government support for R&D and penalizing strong intellectual property rights regimes that limit the dissemination of new technologies to poor countries.
Japan’s technology performance
Strengths
- Significant government support for R&D (rank: 11)
- Provides patent exceptions for research purposes
- Restricts copyrighting of databases
Weaknesses
- Allows patents on plant and animal varieties
- Allows patents on software programs
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