Saturday, November 22, 2008

Economic crisis: Japan to lend IMF USD100b

Hello, this is Taro Aso.

Last weekend, I attended the Summit on Financial Markets and the World Economy for the leaders of 20 nations, including both developed countries and emerging ones such as India and China.

Expectations for Japan stem from its experience in single-handedly recovering from the collapse of the bubble economy. There are also expectations for Japan in view of the role that the world's second largest economy can perform.

Immediately after my speech, leaders including Prime Minister of India Manmohan Singh and Prime Minister of the United Kingdom Gordon Brown told me that they thought it was a good speech with a great deal of concrete content.

Although the summit was brief, limited to just two days, many of the concrete proposals Japan made based on its experience, including proposals on the importance of the injection of public funds, were reflected in the subsequent summit declaration. Problems like the current crisis, including moral hazard issues, cannot be averted through reliance on US-style market fundamentalism.

Conversely, if we were only to strengthen regulations, as in Europe, the economy would not be so free. The middle course may be the right one. In discussions on financial regulation and supervision, too, Japan's proposals garnered the support of leaders of various countries.

It is the economies of emerging nations, such as India, that are growing significantly. The global economic pie as a whole will not get bigger unless these economies are supported. To this end, Japan announced that it is prepared to lend a maximum of 100 billion dollars to the International Monetary Fund (IMF).

This demonstration of leadership by Japan was evaluated highly by Managing Director of the IMF Dominique Strauss-Kahn. In a special statement on Japan, he said that the country had made "a major contribution to maintaining the stability of financial and capital markets."

We are now facing a so-called once-in-a-century financial crisis. A crisis, though, presents opportunities for the future. History shows us that a new order arises when a crisis is overcome.
At the summit, we were able to agree on specific actions that nations need to take in concert.

It goes without saying that taking these actions is of the utmost importance. It was a historic summit at which the world took, at the very least, its first major strides toward overcoming the crisis.

The day after I returned home, I received a sudden request for a meeting from President of the Democratic Party of Japan (DPJ) Ichiro Ozawa. During the meeting, he stated that a second supplementary budget should be submitted to the current Diet session. If not, the DPJ would not allow a vote to take place in the House of Councillors on measures such as the bill to extend the new Anti-Terrorism Special Measures Law.

The purpose of the bill is to enable Japan to play a part in the international community's fight against terrorism through the continuation of its replenishment support activities in the Indian Ocean. It has absolutely nothing to do with the second supplementary budget. Politics that turns its back on the decision-making process will not lead to any progress.

The DPJ still avoids party leaders' debates. If the DPJ does put the people first, instead of political point-scoring, it should engage in the Diet discussion openly and squarely, and join hands with us in making decisions that are in the interests of the people.

Thank you.


Tom - Entrepreneur Interview said...

Wow! 100Billion...isnt that the same amount the US is spending to try and buy their banks out of trouble?

dr martin, penang said...

japan has been contributing well to the reviving of ailing economies. when they agreed to inject funds into the imf and world bank, many countries are benifitting it.

in malaysia, the japan has play a pivotal role by extending some of its funds to various organisations.

as we can see, none of the japanese companies in malaysia have pulled out since the erupt of the economic downtuwn in 1997, unlike some of that of other countries.

malaysia and asean owed japan a lot, especially in the early days of our independence.

Anonymous said...

we should be envious of the japs. although they, too are affected by the economic crisis, they still have hearts to help others.

ADIK, UM said...

jepun mampu bangkit sebagai kuasa ekonomi dunia selepas kena 2 bijik bom atom amerika.

agaknya mampu tak kita bangun macam mereka? nak kena bom jugak ke? kihkihkih!

hiroki, singapore said...

mr jailani,
thank you for publishing our prime minister's e-mail. we hope to continue working with you and the malaysian government in many cooperations.


eleena, KL said...

japan's contribution should be looked at as a long term investment.

although it is a loan to the imf, it imposes some interest. when imf issue out the money to its receipient, imf too will impose interest.

both sides make profit. the losers will be the receipients.

however, japan can be considred saviour in some ways.