Japanese Aid Comes With Strings Attached, Filipinos Say

LOCAL residents strongly oppose construction of a coal-fired electrical plant here. The project symbolizes problems with Japanese foreign aid to Asia, aid experts say.

The Japanese government's Exim bank is currently considering a $441 million loan to finance the plant. Local residents contend that the utility will cause major environmental problems and devastate local jobs. They also say the Japanese government has not been responsive.

The Philippine government proposes to build the plant in this rural town 200 miles northwest of Manila in order to help alleviate the country's massive electricity shortages. Residents say coal ash will pollute the air and plant waste water will ruin the local fishing industry. In December, more than 500 residents made the six-hour journey to Manila to demonstrate in front of the Japanese Exim bank headquarters.

Plans to finance the plant are ``the second invasion of the Japanese regime,'' says protest leader Mila Umayam. Filipinos still have bitter memories of World War II, and they are suspicious of modern-day Japanese foreign aid.

``Little by little the Japanese government is putting some of their industries in the Philippines,'' Ms. Umayam says . ``Little by little we will become a slave again of the Japanese empire.''

Kazio Sunaga, first secretary of the Japanese Embassy in Manila, says some Filipinos misunderstand the role of Japanese aid. Japan wants to help Manila overcome its chronic electricity problems, Mr. Sunaga says, but not at the expense of the environment or jobs. ``We are now urging the Philippine government to have intensive talks with local people'' in Masinloc in order to resolve the dispute.

Japanese aid to the Philippines exceeds that from the United States. Loans, grants, and technical assistance totaled just over $1 billion last year - 51 percent of all foreign aid. But critics charge that Masinloc typifies how Japanese foreign aid does little to help ordinary Filipinos. Most Japanese aid ``goes back to Japanese corporations through purchase of equipment or consultancy services,'' says Alex Magno, a University of the Philippines political scientist. The Japanese government concentrates on massive infrastructure projects such as utilities, bridges, and government buildings, Professor Magno says.

Some of the projects have produced nothing but embarrassment for the Japanese authorities. In the 1970s Japan donated buses and passenger rail cars to the Philippines. Because of repair problems, the vehicles are abandoned and provide makeshift housing for the homeless.

Sunaga admits that in the past, Japanese companies have taken the bulk of foreign aid contracts. But ``the rate of procurement by Japanese companies is declining,'' he says. ``Only 20 percent of the projects can be procured by Japanese companies.'' The rest of the contracts go to Koreans, Taiwanese, and Filipinos.

An earlier Japanese-financed, coal-fired electricity plant in the town of Calaca produced massive amounts of fly ash and other pollutants, Sunaga concedes. But as the problems became apparent this year, the Japanese extended special loans to clean up the pollution. ``Calaca is now one of the cleanest power plants in the Philippines,'' he says.

The Japanese government has also become more sensitive to environmental issues raised by grassroots groups, according to Sunaga. After the Masinloc residents' demonstration, an official of the Japanese Exim bank personally visited the site. The Japanese government ``urged the Philippine government to have a dialogue with the local people because public acceptance'' is very important, Sunaga says.

Local protest leader Umayam says the open attitude of the Exim bank official encouraged residents. ``If the bank looks objectively at the impact of the power plant on local people, it won't grant the loan,'' she says. An Exim bank decision is expected by the spring.