Despite the Ministry of Foreign Affairs (MOFA) request for a budget increase of 11.9% and a halt in the decline in ODA, it was announced that ODA would be cut for fiscal 2006 by 3.4%, the seventh straight year of reductions. MOFA sees ODA as an important diplomatic tool, but the Ministry of Finance (MOF) submitted its lowest budget proposal in eight years in an effort to curb the national debt, and the reduction in ODA reflects this.

MOF has allocated 759 billion yen for ODA in fiscal 2006. In fiscal 1999, ODA spending was 1.04 trillion yen.

Both grant-aid projects and projects sponsored by international organizations will receive less funding, though funds have been made available for counterterrorism and overseas disaster prevention and reconstruction.

In addition, in the supplementary budget for 2005, ODA spending rose to 32.3 billion yen, about twice the amount of the previous year.

MOFA has been embarking on cutting waste and costs, and making post-ODA management more efficient.