Features and Challenges of Japanese Environmental Financial Assistance: A Case Study of Environmental Financial Assistance to Thailand

Abstract

Japan has increased foreign assistance for environmental preservation recently. One of the feature is the indirect approach to environmental preservation: she has allocated it mostly to environmental monitoring and end-of-pipe technologies. This is surprising because other donors have allocated it in the field of ‘environmental policy and administration,’ so that they can directly induce recipients to change policies and build administrative capacity for environmental preservation.

We take two typical environmental assistance projects to Thailand and examine their effectiveness according to the conditions conceptualized by Keohane and Levy (1996). The financial assistance to the fuel-gas desulfurization system has contributed the reduction of the emission of sulfur dioxide. It, however, failed to manage the emission completely, because it has not enhanced the environmental management capacity of the responsible authorities. The assistance to the waste water management project, by contrast, succeeded in raising concerns and in providing potential for capacity building of potential beneficiaries and responsible authorities. The success, however, does not necessarily owe to the Japanese environmental assistance: she did not initiate project-program integration. She just provided subsidized loans to the environmental fund.

To enhance the effectiveness, Japanese aid institutions should step into the preparation for environmental management strategies, in closer cooperation with recipient governments, residents and non-governmental organizations. This may bring change in the arrangements for existing foreign assistance, but this may be unavoidable as long as Japanese hope that recipients will not go through the serious pollution again.