Japan to give SE Asia new aid

Japan to give SE Asia new aid

SINGAPORE (AP): Trying to reassure Japan's neighbors that it will help lead them out of economic turmoil, Japanese Foreign Minister Keizo Obuchi said yesterday his government is considering an additional US$20 million in aid to Southeast Asia.

Obuchi made the announcement during a policy speech in Singapore, the last stop on his three-nation tour of the region.

"We are also studying a fresh contribution of about $20 million to the ASEAN Foundation," Obuchi told political and business leaders. He said the money would be a "solidarity fund" with the Association of Southeast Asian Nations, which comprises Brunei, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

Obuchi said the money would promote ASEAN's strategy "for developing human resources and alleviating poverty, as well as identifying regional projects," but gave no further details on when or how it might be implemented.

The assistance would be in addition to $42 billion Japan has pledged to help Southeast Asia through bilateral packages and the International Monetary Fund. That amount "far exceeds the assistance from any extra-regional country," he said.

Despite its own economic woes, Japan feels a responsibility to help its neighbors by tailoring "our efforts to address the needs of the region's less developed countries hit by the economic difficulties."

"The Japanese economy has still not been able to overcome the after-effects of the collapse of the bubble economy and is in a state of severe stagnation," he noted. But social and economic reforms will proceed regardless of the pain they cause, he said.

Continued multilateral trade and investment liberalization in the region is essential if it is to overcome the economic woes, he said.

Defending his government's recent stimulus package, Obuchi said it will help steer Japan out of its economic doldrums and that "in the not-too-distant future, the Japanese economy will recover."

IMF director Michel Camdessus, who was also in Singapore on Tuesday, said that the stimulus package is seen as a temporary initiative, and that Japan still needs "permanent" measures to boost the economy.

"We consider in the IMF that it would be extremely important that these temporary measures be substituted as soon as possible by permanent measures" and these should give an incentive to consumers to spend rather than save.