Asian nations welcome Japan's new aid plan
Asian nations welcome Japan's new aid plan
LANGKAWI, Malaysia (AP): Asian nations on Sunday welcomed
Japan's ambitious new initiative to help regional economies
recover by guaranteeing Asian sovereign bonds.
At a weekend meeting of Pacific-Rim finance ministers, Japan's
Finance Minister Kiichi Miyazawa announced that Tokyo would
guarantee bonds issued by Asian governments to help attract up to
2 trillion yen (US$17 billion) of domestic and foreign private-
sector funds.
The so-called "second stage" of Japan's aid would go beyond
the US$30 billion earlier promised to help the five countries
hardest hit by Asia's financial crisis: Thailand, Malaysia, the
Philippines, Indonesia and South Korea.
Miyazawa, who was scheduled to leave Sunday for a meeting in
Hanoi with Prime Minister Phan Van Khai, said Vietnam would now
benefit.
Philippine Secretary of Finance Edgardo Espiritu was the first
to opt into the new plan. He said the nation planned to sign an
agreement next month for $500 million in guaranteed bonds.
"I was very appreciative," Espiritu told reporters Sunday on
the sidelines of the meeting on this northern Malaysian resort
island.
Indonesia's Finance Minister Bambang Subianto said the plan
would be analyzed for possible use in his country, which has been
ravaged by economic and social turmoil since the crisis hit in
July 1997.
"Of course this will be a source of financing for the recovery
of the economy, for economic activities of Indonesian
corporations," he told reporters.
The original Miyazawa initiative, which helped many Asian
countries steady their wobbling economies, was announced last
October.
Now, the aim of the plan's expansion was to help struggling
nations raise their own money. Japan claims its guarantees will
still make it much cheaper for governments to issue bonds. Funds
could then be channeled into the private sector to help write off
bad debt and recapitalize ailing companies, Miyazawa said.
Japan has created a $3 billion guarantee fund at the Asian
Development Bank, which is providing 27.5 billion yen to
subsidize interest payments.
Miyazawa also said Japan passed legislation that would allow
the Export-Import Bank of Japan to guarantee sovereign bonds
issued by emerging economies or to purchase those bonds directly.
Several nations still struggling to revive their economies
were quick to praise the aid plan.
"It's very helpful for the recovery of the region," said South
Korea's Minister of Finance and Economy Kyu Sung-lee.
His Thai counterpart, Tarrin Nimmanahaeminda, told reporters:
"We're expressing general interest."
Ministers of the 21-member Asia Pacific Economic Cooperation
forum praised the new aid plan in their final communique as "a
potentially effective tool to accelerate the pace of
restructuring."