Japan pledges to help ASEAN

Japan pledges to help ASEAN

TOKYO (AFP): Japan will start to use public sector capital as a new form of assistance to Southeast Asian countries in addition to aid within the IMF framework, a report said Wednesday.

Tokyo will use trade insurance to back private sector loans to members of the Association of Southeast Asian Nations (ASEAN) hit by currency turmoil, Nihon Keizai Shimbun business daily said.

The first such loan will be provided to Malaysia by Sumitomo Bank Ltd. and Nomura Securities Co. Ltd. by the end of the year, it said.

Japan's top securities house Nomura will issue bonds worth 70 billion yen (US$519 million) and will give the funds raised to Sumimoto Bank at low interest, it said.

The bank will then transfer the money to the Malaysian government and local companies as the state-backed five-year loans, the newspaper said.

The plan was unofficially communicated to Prime Minister Mahathir Mohammad by Japan's International Trade and Industry Minister Kaoru Yosano, now on a three-day tour of Indonesia, Malaysia and Singapore, it said.