FOCUS-Chastened Japan seeks ways to help Indonesia
(Adds Japanese, Malaysian finance ministers to meet, para 13)
By Yoko Kobayashi
TOKYO, Feb 6 (Reuters) - Stung by criticism that it was not doing enough for Asia, Japan said on Friday it would send a delegation to Indonesia ahead of this month's Group of Seven meeting to discuss the possibility of fresh aid to the country.
''With the G7 meeting coming up soon, this (delegation) will provide important input to the finance minister and the prime minister on what help Japan can extend,'' a senior official of Japan's Ministry of Finance (MOF) said.
''There is still more room for us to actively aid the country (Indonesia),'' another MOF official said.
The delegation will leave on February 11 for Singapore and Indonesia for a seven-to- 10-day trip. It will aim to meet Indonesian President Suharto, as well as other government officials and possibly leaders in the private sector. Decisions on additional help for Indonesia will be made after the delegation returns to Japan, the officials said.
On Friday, Singapore's Prime Minister Goh Chok Tong called his Japanese counterpart Ryutaro Hashimoto to discuss Indonesia, and the two agreed to strengthen cooperative ties over the country, Japan's Foreign Ministry said.
Goh has proposed multilateral guarantees for Indonesian letters of credit to enable the country to import components vital for its export trade.
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).
Tokyo has come under attack from the United States and other Asian nations for not taking a more active role in calming the Asian currency turmoil.
The Asia crisis is expected to be a major issue at the G7 meeting of finance ministers and central bankers in London on February 21. The G7 groups Japan, the United States, Britain, Germany, France, Canada and Italy.
Last month, U.S. Trade representative Charlene Barshefsky called Japan's efforts to end the economic crisis in Asia ''absolutely inadequate,'' while Treasury Secretary Robert Rubin said Japan had ''obviously'' not taken enough measures to invigorate its ailing economy.
Rubin reiterated that Japan was key to restoring financial stability in Asia.
Earlier this week, Malaysia's Deputy Prime Minister Anwar Ibrahim said Japan had fallen short in its drive to help ailing Asian economies and should redouble its efforts to lead the region out of the crisis.
Anwar, who will be visiting Tokyo next week, will meet Japanese Finance Minister Hikaru Matsunaga on Monday.
Hit by a barrage of criticism from financial experts at the World Economic Forum's annual meeting in Davos, Switzerland, Eisuke Sakakibara, Japan's vice minister for international affairs, was forced to defend Tokyo's position.
''Let me point out that in all the Asian rescue packages, Japan has made the largest contribution,'' Sakakibara said in Davos on Tuesday. He added that Tokyo had the will to boost its slumping economy.
Sakakibara, now back in Tokyo, met Prime Minister Ryutaro Hashimoto on Friday to discuss the delegation to Indonesia, which would include officials from the Finance Ministry, the Foreign Ministry and the Trade Ministry.
Sakakibara himself will not be a part of the group.
It will be headed by former vice finance minister for international affairs, Tadao Chino, who is now the chairman of Nomura Research Institute.
Japan's ruling Liberal Democratic Party also sprang into action on Friday, announcing it too would send a delegation to Singapore, Thailand, Indonesia and Hong Kong, to see what it could do to help stabilise the region's economy.
The politicians' group will leave on Sunday and tour for a week, speaking to political leaders in each nation.
Offers being considered include loans from the Export-Import Bank of Japan to expand an existing trade credit guarantee programme and to provide other yen-denominated credits, the Nihon Keizai Shimbun reported on Friday.
An Ex-Im Bank official said there was some room to expand the bank's untied loans to Indonesia, though there has been no request for this from Jakarta. The Ex-Im Bank did not participate in an international bail-out package for Jakarta last October.
Japan, along with international organisation such as the International Monetary Fund and the World Bank, participated in a $43 billion bailout plan designed last October, by promising to contribute $5 billion should the need arise.
The Bank of Japan (BOJ) also intervened in the foreign exchange market to buy the rupiah against the dollar shortly after the announcement of the IMF-led package.
In January, Hashimoto sent a special envoy to Indonesia and promised to give Jakarta a 50 billion yen ($403 million) loan in the 1998/99 fiscal year, under Tokyo's official development assistance programme, to back its economic reform programme. Agreement was also reached to give additional 20 billion yen ($161 million) loan under the programme in fiscal year 1997/98.
A Foreign Ministry official said Japan has not yet disbursed this 20 billion.
($1 equals 124 yen) |
