Abstract
The Japanese Ministry of Foreign Affairs recently conducted the first comprehensive review of Structural Adjustment Loans (SAL) provided by the Japanese government. For the roughly two decades from 1986 to the present, approximately 9, 676 billion yen has been disbursed as SAL. This paper attempts to uncover the political background for the decision to start SAL in the 1980s. The author focuses on the fact that the Japanese government faced a serious problem from the US-Japan trade imbalance at the time. Under Prime Minister Yasuhiro Nakasone's initiative, it announced the Financial Recycling Plan with the aim of circulating about US$65 billion in Japanese money to international institutions such as the IMF and World Bank, and to the developing countries, which were facing serious debt problems. SAL was selected as one of the components of the Recycling Plan, as it allowed the quicker disbursement of loans than project loans. The question here is the rationale for the selection of SAL as the modality for ODA. However, it is impossible to evaluate the relevance of the SAL program, which had a political mission beyond the purpose of simply providing ODA, under the current guideline for evaluating ODA. This paper raises the question about how to evaluate the program that is directly connected to the grave political purposes.
