[atlasvoice]

[Reuters]

Published date: 15th Dec 1987

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Chaitanya Kalbag

MANILA, Dec 15 – Japanese Prime Minister Noboru Takeshita marked his first foreign trip by vowing to improve access to Japan for imports from South-East Asia and by formally announcing a two billion dollar package aimed at boosting the private sector and economic cooperation in the region. 

“With a view to contributing to the further development of the ASEAN economies, as well as accelerating the process of internationalisation of Japan’s economic structure, I am determined to exert efforts to further improve the market access of our country,” Takeshita told the ASEAN summit. 

The Association of South East Asian Nations (ASEAN) groups Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. 

Takeshita said Japan would extend a package of no less than two billion U.S. dollars over a three-year period under the ASEAN-Japan Development Fund (AJDF) which would be in addition to normal bilateral aid. 

“The fund will mainly be intended for private enterprises in the industrial sector,” he said, saying actual drawdowns would be flexible and dependent on the needs of individual countries. 

Takeshita said part of the AJDF would be set aside to promote direct Japanese investment in ASEAN. 

Such investments in new ASEAN enterprises and expansion of existing projects would be channelled through an investment fund in Japan with official and private funding, he said. 

Takeshita said that under the AJDF, Japan would also provide two-step “generally untied” loans through its official development assistance (ODA) program and Japan’s Export-Import Bank. Such loans would be extended mainly through development financial institutions in ASEAN countries, he added. 

“In response to the requests of the ASEAN countries, more concessional terms and conditions than are usually offered will be applied to the loans under this scheme,” Takeshita said. He said emphasis would be on promoting intra-regional cooperation. 

The AJDF is part of a 20 billion dollar plan by Japan to recycle its huge private-sector trade surplus. 

A Japanese briefing paper given to reporters said more than half of the AJDF was expected to consist of ODA loans. 

“In addition, it is expected that the fund will contribute in future to the development of financial markets in ASEAN countries by selling the equity procured by the fund in ASEAN stock markets,” the briefing paper said. 

Takeshita said Japan in April significantly improved its generalised system of preferences policy on mining and industrial products, and he said more improvements are planned for the coming fiscal year (starting April 1). 

“Japan, fully cognisant of the increasing international responsibility it must now shoulder, must now take bold initiatives in its foreign and domestic policies to pursue a society that will share its prosperity with the rest of the world as we enter the 21st century,” Takeshita said. 

The briefing paper said loans under the AJDF would cover two categories. The first covers loans for cooperative programs or projects launched by one or more ASEAN countries. 

The paper said that under the first category, all ASEAN countries will receive equal treatment in terms and conditions. 

This was an apparent reference to fears that Singapore and Brunei, the bloc’s most affluent members, would be excluded from the first category fund. 

The paper said the second category would cover loans for specific projects in ASEAN countries that were currently eligible for ODA loans. ASEAN officials said this implied Singapore and Brunei were excluded from this category. 

Malaysian Prime Minister Mahathir Mohamad told Takeshita in a speech that the new fund would have to be offered “on terms and conditions that are meaningful and concessional”, including insurance against any further rise of the yen. 

“We are concerned that more and more Japanese investments are shifting away from this region to the U.S ., European Community and China,” Mahathir said. 

But he said Japan-ASEAN cooperation could serve as a model by moving from “the donor-recipient stereotype to a truly cooperative spirit that would be mutually beneficial and in conditions that both could be proud of.”