Poor in natural energy resources, Japan has depended on imported oil and other fuels to remain in the forefront of advanced industrial nations. Tokyo's energy policies, therefore, have emphasized security and diversity of supplies, with energy conservation and efficiency receiving a lower priority. However, universal concern that mankind's activities are causing an imbalance of certain key gases in the earth's atmosphere and, in turn, boosting the average global temperature has put the environmental impact of energy policies on a par with traditional priorities.
In the most direct action so far, developed countries recently agreed to cut emissions of carbon dioxide and other greenhouse gases over the next 10 to 14 years in an effort to forestall the potentially harmful effects of global warming. Coming at a time when economic growth in Japan is at a standstill and prospects for a revival are questionable, meeting the goals of the so-called Kyoto Protocol presents a major challenge for policymakers, companies and consumers. Japan's energy policies certainly will be remodeled in the effort.
NEW BANK PROGRAM PROGRESSES AMID RISING CRITICISM by Douglas Ostrom
The recapitalization plan approved by the Diet in mid-February to assist a broad spectrum of banks continues on a fast track. Twenty-one banks submitted applications to a special screening committee March 5. All banks publicly identified as applicants are expected to get funds. Plans still call for these financial institutions to have their money in time for it to be included in March 31 yearend financial statements (see JEI Report No. 8B, February 27, 1998).
SUHARTO CHALLENGES IMF PLAN; AID TO INDONESIA DELAYED by Eric Altbach
The United States and Japan have joined the International Monetary Fund in temporarily halting aid to Indonesia as newly reelected President Suharto continues to drag his feet on implementing the IMF economic reform program that is the quid pro quo for financial assistance. The fund announced March 6 that the next $3 billion tranche of a $43 billion bailout package would be delayed until at least April rather than disbursed on schedule in March. As a result, an additional $2.5 billion in World Bank and Asian Development Bank loans also are on hold until the IMF is satisfied that Jakarta is in compliance with the economic restructuring program that Mr. Suharto accepted in mid-January.
TOKYO CONSIDERED LEGISLATION TO SUPPORT NEW U.S.-JAPAN DEFENSE GUIDELINES by Barbara Wanner
Although already under fire for a flagging economy, problems in the financial sector and a scandal enveloping the Ministry of Finance, the government of Prime Minister Ryutaro Hashimoto has indicated that it will tackle another hot-button issue the broadening of Japan's defense roles and responsibilities. Senior officials who did not wish to be identified said February 28 that they are preparing a package of legislation that will provide the legal basis for an expanded Japanese role in the U.S.-Japan Mutual Security Treaty. The Rear-Area Support Act will spell out the kinds of logistical support that the Self-Defense Forces can provide the U.S. military as outlined in the September 1997 revised guidelines for U.S.-Japan defense cooperation.
Notes: U.S.-Japan Deregulation Talks
The government of Prime Minister Ryutaro Hashimoto might see regulatory reform as a primary way to inject new life into a comatose economy, but this linkage does not mean that Tokyo is prepared to adopt wholesale the deregulation agenda pushed by Washington or to follow its timetable for acceptable changes. Clinton administration trade negotiators received a fresh reminder of this enduring reality March 4 during the second review of the results of the U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy the forum that Mr. Hashimoto and President Clinton agreed to create last June to give the United States direct input into Japan's regulatory reform process.