Japan unveils $500m aid package for SE Asia

Japan unveils $500m aid package for SE Asia

MANILA (AP): Japanese Prime Minister Keizo Obuchi announced Sunday a new US$500 million aid package for Southeast Asia focusing on training and development of human resources.

Tokyo formulated the package of grants, dubbed the "Obuchi Plan", after a high-level Japanese mission visited Southeast Asia in September and concluded that the key to sustained economic growth in the region was the development of human resources.

Obuchi also announced that Japan would contribute money to the World Bank and Asian Development Bank to tackle poverty, Japanese officials said. The amount of the fund, which is still awaiting budgetary approval, was not disclosed.

With Asian economies now on a recovery track, Japan's focus has shifted to helping build the foundation for medium- to long- term stability in the region, officials said.

"Obuchi is looking at establishing a more stable footing for the countries in the future," said the prime minister's deputy press secretary, Akitaka Saiki.

The package also includes assistance aimed at narrowing the gap between recently admitted members of the Association of Southeast Asian Nations (ASEAN) - Vietnam, Laos and Cambodia - and more advanced countries through dispatch of legal and administrative experts.

ASEAN leaders met Sunday in an informal summit, which was also attended by leaders from Japan, South Korea and China.

Other key projects in Japan's $500 million package include:

-- The dispatch of financial experts, including bankers and auditors, for technical support to Indonesia, Thailand and Malaysia.

-- Support for establishing institutions to promote higher education in economic development, engineering and research.

-- Dispatch of manufacturing experts as senior volunteers.

-- Cooperation in setting up a network of non-government organizations aimed at helping poverty-stricken children.

-- Acceptance of more exchange students from the region into Japanese universities.

Japan already has pledged $82 billion in loans to Asian countries hit by the regional financial crisis that began two years ago. Of that, $30 billion came under the so-called Miyazawa Fund, originally planned for two years to help ease liquidity in five Asian countries hit by the regional currency crisis.

ASEAN countries have asked Japan to make the Miyazawa Fund a permanent facility.

Japanese officials said Sunday Tokyo was in favor of establishing a long-term aid fund to support economic stability in Asia, but believes any such initiative should also involve the U.S.

"As regards the extension of the Miyazawa fund or something else, we will definitely go into a second stage of cooperation," Akitaka Saiki told Dow Jones on the sidelines of a summit of Asian leaders. "This will be long-term."

The idea of a permanent fund is sensitive because it could limit Asia's dependence on the International Monetary Fund, which is heavily under the influence of the U.S.

Saiki said Japan would shoulder the "larger share of responsibility" for any Asian financial facility, but added that the U.S. should also play a role.

"We are not the only player in the region - we shouldn't discourage the U.S.," Saiki said. "To some extent, we have to involve the Americans." He didn't elaborate on the nature of any long-term fund.

ASEAN comprises Thailand, Indonesia, Singapore, Malaysia, Philippines, Brunei, Vietnam, Laos, Myanmar, and Cambodia.