Department had two divisions, one for economic and one for technical cooperation. Under its brief the Department had to plan for economic cooperation as it affected foreign policy, manage agreements with other
countries, protect Japanese investment interests abroad and promote exchange of technological research. This was the first time the Japanese Government had explicitly linked economic cooperation with diplomatic and political objectives and was a marked contrast to the export orientation of the counterpart division in MITI.17
53.
The Advisory Council and the OECF
These broad developments at the end of the 1950s formalised, but in no way coordinated, Japan's incipient economic cooperation effort. They helped to decentralise, not consolidate, the aid
administration, a process which continued into the 1960s. On 25 July 1959 the Liberal Democratic Party (LDP) established its Special
Committee on Overseas Economic Cooperation (Taigai keizai kyoryoku 18
tokubetsu iinkai) as a unit of the Party's formal decision-making machinery. At an early stage the Committee recommended setting up a high level council on economic cooperation in the Prime Minister's Office and on 30 April 1960 the Advisory Council on Overseas Economic Cooperation (Taigai keizai kyoryoku shingikai) came into being. It incorporated two other committees established in 1958, the Overseas Economic Cooperation Consultative Committee and the Special Committee on Economic and Technical Cooperation. Fukuda Takeo, who at the time was Director of the Prime Minister's Office, discussed the bill to establish a council in the Cabinet Committee of the House of
Representatives on 18 March 1960, saying that the body would be
composed of Cabinet members and of "other suitably qualified people". The membership was to be no more than fifteen, making it small and,
19
hopefully, strong. Its first meeting was held on 7 December 1961, with the Prime Minister, Ikeda Hayato, as Chairman and there were in fact eighteen members, including six ministers.
The Council was set up to advise the Prime Minister on aid goals and to act as a coordinator of aid policy. There were
insistent demands from industrialists for this, given the need which they saw to use aid as effectively as possible in the promotion of exports. Olson considers that the early committees of 1958 were
"honorific and moribund", but the new Council's membership was
indicative of its importance and it seemed likely that it would be able to stimulate the development of new Japanese aid programs. The Council went into recess, however, after only two meetings. Although it did not reconvene for many years it was not abolished but continued to
21
draw a budget to cover administrative expenses. The delay in choosing members (not completed until June 1961) and in actually meeting, perhaps revealed the barriers to the Council's success posed by inter-ministerial differences. The Council was eventually
restructured and revitalised in 1969, but until then its function as a 22
body to initiate and coordinate policy was unfulfilled.
Rather than inhibiting the tendency for each ministry to expand its own economic cooperation administration, the establishment of the Council in 1960 may well have encouraged ministries to ensure that their voices were clearly heard at the ministerial forum. In April 1960, the MFA added a Policy Division to its Economic
Cooperation Department, both to coordinate and initiate aid policy 23
within the Department. The Economic Cooperation Division also gained new planning duties. A year later, in May 1961, the Technical Cooperation Division was split into two, the new division taking responsibility for overseas training centres and multilateral technical cooperation
agreements.^
In January 1961, the EPA created within the Coordination Bureau, its first Economic Cooperation Division, which was given wide legal powers for overall coordination, policy initiation and planning (Chart 2-2). It was also made responsible for the Overseas Economic
25
Cooperation Fund (OECF). The Division became the only body in the entire Government economic cooperation administration with the formal
55 « 3 2 2 g a .5 D I I S 3 § g U u C •*-* <TJ 0 "D E U <D .5 3 Q (/) t j m u 0) 8 3 CJ CD Fir s t C o c p e i D iv is : § 8 & .2 I l l s
authority to undertake broad policy coordination, although it remained unused. This was mainly because of the EPA's lack of influence in domestic politics, which was itself a result of the strong control of the Agency by officials from other ministries (notably the MOF and MITI) attached to it.
The new Division's work in economic planning was in keeping with the aims of the Agency. Both the National Five-Year Plan of 1955 and the New Long-Term Economic Plan of 1957 recognised
international economic policy as being essential to stable domestic 26
economic growth. An article written in 1957 by the Director of the EPA's Planning Division argued explicitly the need to incorporate economic cooperation policies in the national planning framework. He claimed that there were obvious drawbacks in a short-term view of
economic cooperation and its effects, because the industrial development of underdeveloped countries could draw on supplies of limited resources and lessen the country's export capacity. The author maintained,
however, that economic cooperation should be regarded primarily in the long-term, for only by aligning economic cooperation policy with Japan's industrial development and industrial structure policies could economic cooperation be of greatest benefit to Japan and to the recipient
27
nation. It was this rather "neutral" stance of the EPA, directly concerned with the orderly planning of economic cooperation as part of a domestic economic strategy, which gained it administrative direction of the OECF.
The OECF grew out of the Asian Development Fund set up in 1957 with support from the Prime Minister, Kishi Nobusuke. That Fund
28