For a chequebook diplomat, Japan’s cheque does not carry the punch it used to. Tokyo, the world’s mightiest aid donor as recently as 2001, has been slipping alarmingly down the league tables. In 2006, it was pushed into third place by the UK, a country with only about half its economic clout. The way things are going, it could be overtaken by Germany and France as early as this year.

The reasons are twofold. First, Japan is not as rich as it used to be. Its nominal gross domestic product peaked in the second quarter of 1997 and, according to Lehman Brothers, is still 0.4 per cent below that level even today. By contrast, over the same period, nominal GDP in the euro area has swelled by 52 per cent and is up a full 69 per cent in the US.

As output has stagnated, debt has ballooned to about 150 per cent of GDP. That is largely a result of extravagant stimulus packages in difficult years. As the economy has recovered (sort of), the government has taken to penny-pinching. For four years, the budgets of almost all departments have been cut. Official development assistance, though a tiny part of overall spending, is an easy target. This year it will be squeezed a further 4 per cent, its ninth straight year of strangulation, bringing an accumulated decline of more than 40 per cent.

The second reason is that chequebook diplomacy, the foreign ministry’s weapon of choice in the pacifist postwar period, has been judged a failure. Japan spent $13bn to help pay for the first Gulf war in 1990. But when Kuwait published a roll-call of countries to be thanked for its liberation, the great bankroller was not mentioned.

And despite the fact that Japan has funnelled more than $25bn to China – partly in lieu of war reparations – most Chinese are blissfully ignorant of its contribution, rendering them free to boo Japanese football teams in international competitions.

Japan does not like to be booed. So it has got meaner. Soft loans to China are being wound down. A country that can put a man into space could probably do without it anyway.

Tokyo has also cut its contribution to the United Nations from 19.5 per cent of the total budget to 16.6 per cent. Not unreasonably, negotiators pointed out that the four permanent members of the Security Council, excluding the US, were together paying less than it was. To add insult to injury, in spite of years of paying over the odds, Tokyo’s petition for a seat on the security council has been snubbed.

It is only natural that Japan feels poorer and unloved. It is both. But that leaves it with a problem. Unless it is to abandon its aspirations to play a role in world affairs commensurate with its still formidable GDP, it will have to think of something else.

The past three Japanese prime ministers, though entirely different in temperament and political leanings, have all tried to further the idea that Japan can do more with less. Part of their solution has been to step up the international contribution made by the nation’s self-defence forces.

Japan’s pacifist contribution prohibits it from sending its armed forces, some of the best equipped in the world, to anywhere they might actually come into harm’s way. Junichiro Koizumi, the last-but-one prime minister, dispatched 550 ground forces to southern Iraq, but only after tortured explanations to parliament to the effect that southern Iraq was not a combat zone. Fortunately, all 550 returned to Japan without so much as a scratch. Yet their uneventful sojourn – during which they were protected by Dutch and British troops – led to criticism that their mission was purely symbolic and that, by requiring help from other countries, it was also counterproductive. A mission to refuel allied ships in the Indian Ocean, far from any combat, was so controversial it contributed to the fall of Shinzo Abe’s government in September 2007. Discussion of the mission, now about to be resumed, has all but paralysed parliament during the first several months of Yasuo Fukuda’s premiership.

This month, Masahiko Koumura, foreign minister, confirmed to the FT that Japan was considering sending a peacekeeping force to Sudan. But he was quick to add that, even if troops went, they would not be going to Darfur, where things could get rough. Instead, they would help to monitor the north-south ceasefire. Japan’s peacekeepers, it seems, can go only where peace is already entrenched.

Such self-imposed restrictions mean Japan has only 50 peacekeepers abroad, most in the Golan Heights. That compares with 10,000 for Germany, another country grappling with a postwar military phobia. It has 3,500 troops in Afghanistan alone.

I asked Sadako Ogata, one of Japan’s most distinguished diplomats, what she thought of her country’s international contribution. The former UN high commissioner for refugees said it should do more. On the military side, she lamented the fact that Japanese pacifism had blurred the distinction between peacekeeping and combat. This had rendered the public alarmed at almost any international involvement and intolerant of any Japanese casualties.

Even a bigger peacekeeping contribution would not be enough. “You can’t compensate for a falling aid budget by sending people to the safest places,” she said. Budget cuts had to be stopped or even reversed.

There has been much talk of Japan’s growing ambitions in international affairs. The intention may be there. But with a shrunken aid budget and a still timid military, the fact is Tokyo is doing less.

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