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TOKYO, Japan (December 9, 2000 – Japan Times Online)---A study group set up by the ruling coalition agreed Friday on the need to reduce the amount of Japan's official development assistance to developing countries (potentially including Pacific Islands nations) in the fiscal 2001 budget, members of the group said.

The policy team did not recommend a percentage for the cut, but said it is against a severe reduction, such as the 30 percent proposed by Liberal Democratic Party policy chief Shizuka Kamei.

The group, led by former Foreign Minister Taro Nakayama, consists of lawmakers from the LDP and its two coalition partners -- New Komeito and the New Conservative Party.

The study group said in a policy paper that the government should carry out "a quantitative cut in the overall size of the ODA budget," in view of tight fiscal conditions.

But at the same time, the government should make sure the proposed cuts do not delay or halt projects Japan has pledged at global meetings to undertake, or payments it has promised to international organizations, the paper said.

Of the 85 trillion yen fiscal 2000 budget, ODA accounted for 1.05 trillion yen, down 0.2 percent from the previous year.

Japan's ODA budget was the world's largest for the ninth straight year in 1999, but pressure is increasing on the government to limit spending as tax revenue growth slows.

Asian countries that depend on Japan as their top ODA donor have asked Tokyo not to reduce its ODA spending.

The study group said in the paper that moves to reform ODA policy are necessary because of the rise in public criticism about how some of the ODA donations are being used.

"It is an urgent duty for us to bolster the transparency of the ODA budget and increase the effectiveness of the ODA money," it says. The paper recommends that the ODA budget for fiscal 2001 should place priority on projects for humanitarian purposes as well as projects for tackling global issues such as environmental protection and infectious diseases. It also says Japan should ask aid-recipient nations to inform their public that the ODA goods and services originated from Japan.

The government and the LDP are also conducting a separate review of ODA policy toward China.

Both panels are expected to complete the review work by the end of this month.

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