FOCUS-Japan PM to make weekend visit to Indonesia
06:16 a.m. Mar 11, 1998 Eastern
By Yoko Nishikawa
TOKYO, March 11 (Reuters) - In a surprise announcement, Japanese Prime
Minister Ryutaro Hashimoto will travel to Indonesia this weekend for
talks with President Suharto about the country's economic crisis.
The announcement set off speculation that the sudden trip by the leader
of Japan, Indonesia's biggest creditor nation, was part of international
efforts to put pressure on President Suharto to abide by a programme
agreed with the International Monetary Fund (IMF) to solve Indonesia's
financial woes.
However Japan's top government spokesman said the 24-hour visit was at
Suharto's own urging, and Hashimoto had not been asked to make the visit
either by Washington or the IMF.
Hashimoto plans to leave Japan on Saturday afternoon and return home on
Sunday evening.
''Discussions will focus on currencies and economic conditions,'' Chief
Cabinet Secretary Kanezo Muraoka told a news conference in announcing
the visit.
Asked if Japan was preparing a new aid package for Indonesia, Muraoka
said he was unaware of any package.
Japan, along with international organisations such as the International
Monetary Fund and the World Bank, participated in a $43 billion
Indonesian bailout plan last October, promising to contribute $5 billion
should the need arise.
In January, Hashimoto sent a special envoy to Indonesia and promised to
give Jakarta a 50 billion yen ($387 million) loan in the 1998/99 fiscal
year, under Tokyo's official development assistance programme, to back
its economic reform programme.
Authoritative sources said Japanese Vice Finance Minister for
International Affairs Eisuke Sakakibara also was likely to be in the
prime minister's party.
The sources said Sakakibara, known as ''Mr Yen'' for his influence on
currency markets, was likely to fly to Jakarta a day ahead of the prime
minister from Paris where he is attending a meeting of the Organisation
for Economic Co-operation and Development (OECD).
Japan is Indonesia's largest creditor, with Japanese banks accounting
for 39 percent, or $23 billion, of Indonesia's $58.7 billion in foreign
bank debt as of the end of June 1997, according to the Bank for
International Settlements (BIS).
Earlier on Wednesday, before his visit was announced, Hashimoto said
pointedly Japan would continue to help Indonesia if it abided by the IMF
economic reform programme.
''Japan has vowed to give as much cooperation as possible ungrudgingly
to Indonesia within the framework of the IMF,'' Hashimoto told
reporters.
There is diplomatic capital for Hashimoto in the visit because there has
been criticism in Washington and several Asian nations that Japan has
not done enough to calm Asia's economic turmoil.
Japan on March 3 signed a contract with Indonesia to provide up to 20
billion yen in 30-year loans at 2.2 percent interest for Indonesia's
structural reform. It said at the time it was providing the loans along
with structural adjustment assistance by the World Bank and other
institutions like the IMF.
However in recent days, as Indonesia has appeared to waver on
implementing IMF reforms, Japan has sent out signals the loan may be
delayed if Jakarta does not fall into line.
On Tuesday, a Japanese foreign ministry spokesman said Tokyo would keep
a close eye on how Indonesia implements the IMF mandated reforms.
''We are extremely interested to see how Indonesia implements the IMF
reforms,'' a ministry spokesman said.
($1-129 yen)
((Tokyo Newsroom +81-3 3432 8022
tokyo.newsroom+reuters.com)) ^REUTERS@ |
