Japan to step up aid to Asian countries

Japan to step up aid to Asian countries

TOKYO (AFP): Prime Minister Keizo Obuchi will soothe Asian fears about Japan's fragile economy while promising more aid to the region's poorest at a summit this weekend, officials say. The premier leaves Friday for the summit, stopping off in Jakarta to meet Indonesian President Abdurrahman Wahid.

He then flies to Manila where the leaders of the Association of Southeast Asian Nations (ASEAN) meet their three most powerful neighbors -- Japan, China and South Korea.

"The prime minister would like to convey to the ASEAN member countries that Japan's economic recovery is on its way," said Obuchi's deputy press secretary, Akitaka Saiki.

"Japan will take all necessary measures to make the economic recovery more certain," said the senior aide.

In its latest effort to revive Japan's economy -- six times as large as ASEAN's -- Obuchi announced an 18 trillion yen (US$172 billion) package this month.

And "Japan will continue to extend maximum cooperation to the efforts of the ASEAN friends, which are struggling to improve their economic situation," Saiki said.

Obuchi will reportedly pledge 20 billion yen in aid for the poor in Asia through the World Bank and the Asian Development Bank when he attends the Manila meeting.

Tokyo has so far promised $80 billion for countries affected by the Asian crisis. The aid includes a 30-billion-dollar package announced in October 1998 by Finance Minister Kiichi Miyazawa. During the meeting with ASEAN leaders, Obuchi will present a key report issued last week after a 12-day tour of Asia by a government-ordered mission, led by Toyota Motor Corp. chairman Hiroshi Okuda.

"(Obuchi) will make an announcement in Manila... in many aspects that was proposed by Okuda," Saiki said. "Particular emphasis will be placed on the development of human resources."

The report called on Asian economies and Japan to further open their markets, develop small companies, improve the climate for foreign investment and to bolster the use of the yen in Asia.

The report stressed the importance of long-term engagement in the region by Japanese companies, and of the success of the ASEAN Free Trade Area in helping liberalize trade.

ASEAN has called on Obuchi to spell out a fresh aid plan. "ASEAN expects from Japan full cooperation in its areas of interest, development projects, social safety nets, (and) human resource development," ASEAN secretary general Rodolfo Severino said Tuesday in Manila.

But in return, the Japanese premier may use his attendance to call on Southeast Asia to close ranks with Tokyo at global trade talks in Seattle next week.

Japan's Foreign Minister Yohei Kono sent letters this week to key ASEAN members, seeking their support for Japan's campaign to protect agriculture at the World Trade Organization talks, beginning November 30.

On the sidelines of the ASEAN summit, Obuchi is to hold separate talks with Chinese Prime Minister Zhu Rongji, South Korean President Kim Dae-Jung and Philippine President Joseph Estrada.

Japan is the largest donor to ASEAN, with official development assistance at $2,361 million in 1998 compared with $1,354 million in 1997.

Japan's trade surplus with ASEAN dropped 14.7 percent from a year earlier to 370 billion yen in the six months to June.