Japan's rescue fund 'too slow'

Japan's rescue fund 'too slow'

TOKYO (AFP): Japan's US$30 billion Asian rescue package is so slow-footed the crisis will be over before it is spent, Malaysian Premier Mahathir Mohamad said in an interview published here on Wednesday.

The package is "very effective" for Asian countries, Mahathir told the Mainichi newspaper. "But it has to be dispersed in time," he warned, complaining about slowness and excessive red tape.

Japan's Finance Minister Kiichi Miyazawa last October announced the $30 billion loan facility to help Asian nations recover from the crisis that has swept the region since July 1997.

"Malaysia asked for $5 billion (from the Japanese fund) for infrastructure projects but we have to go through study after study, time and time again," Mahathir complained.

"By the time Malaysia eventually gets to see the money, the crisis will be over. Japan has to think about the effectiveness of its money."

A Japanese finance ministry official said the government could not "just hand out the money without having a detailed plan from each country on how it will proceed with economic reconstruction."

"We decided to give the money in order to help Asia economically, and countries must present us a clear, detailed plan on how they are going to use the money for the economic improvement," the official said.

Mahathir said Japan's must take a lead in shaping a new world order.

Tokyo's former proposal for an Asian Fund to work alongside the International Monetary Fund was "very good," said Mahathir, criticizing the United States for helping shoot down the idea for fear it would undermine the IMF.

"The IMF does not understand the situation" in Asia, he said. "Destroying an economy has social and political costs. The IMF only looks at financial aspects."

The premier urged Japan to stabilize the yen to allow it to become an international currency for Asian countries. "It would be good to have the yen trade in a narrow band," he said, urging talks with European nations on the subject following their launch of the euro.

Although Mahathir did not expect a single Asian currency to emerge in the immediate future, "it will come eventually. I know that China is not confident enough to open its currency market but China would have to eventually become involved in an Asian common currency."

The Malaysian leader said Japan needed more political stability to overcome its economic woes.

"Japan's constant changes of prime minister makes it difficult to take action on policies or develop strategies to improve the economy," said Mahathir, in power since 1981 and Southeast Asia's longest-serving leader.

"If Japan keeps changing its prime minister every two years it cannot see any results," he said. "Japan doesn't have a stable government because everyone wants to be prime minister."

Mahathir, whose country hosted the Asia Pacific Economic Cooperation (APEC) leaders' forum in November, blasted the United States for using the grouping to "expand its domination over the Asia-Pacific region."

He complained that his own proposals to regulate hedge funds had merely been passed on to the Group of 22 nations for further discussions.

"APEC is now just a place to meet each other," said Mahathir. "APEC has no clout."