No. 3 — January 21, 2000


Weekly Review

--- by Marc Castellano

Prime Minister Keizo Obuchi used a January 10-15 trip to Cambodia, Laos and Thailand to discuss ways to increase bilateral cooperation. Most significantly, he promised to be Asia's voice at this year's summit of the leaders of the Group of Seven industrial nations plus Russia, which will be held on Okinawa in July. The premier also announced new financial assistance programs and other initiatives aimed at spurring development in the three countries. Mr. Obuchi's trip marked the first official visit by a Japanese prime minister to Cambodia in 43 years and to Laos in 33 years.

Meeting with Cambodian Prime Minister Hun Sen, Mr. Obuchi announced Tokyo's readiness to support Phnom Penh's efforts to push through administrative and financial reforms, including an anticorruption campaign. To this end, the government may dispatch experts in the areas of taxation and debt management. It also is considering providing up to ¥2 billion ($16.7 million at ¥120=$1.00) in nonproject grant aid. In February 1999, Tokyo pledged up to $100 million in aid for Cambodia and announced that it would restart yen loans to the country, something that stopped more than three decades ago due to civil war and unrest (see JEI Report No. 9B, March 5, 1999). Hun Sen explained his "triangular strategy," so-called because it is geared toward achieving stability, regional integration, and social and economic reform. He also promised Cambodia's support of Japan's bid for a permanent seat on the United Nations Security Council.

In accordance with Japan's emphasis on human security in Asia &emdash; a policy thrust introduced in December 1998 at a summit of Association of Southeast Asian Nations members (see JEI Report No. 1B, January 8, 1999) &emdash; Mr. Obuchi announced the launch of an initiative aimed at reducing to zero the number of victims of antipersonnel land mines. To achieve this goal, Tokyo will provide technical support and equipment for mine clearance, victim assistance and education, including grants for hospital construction, and funding for nongovernmental organizations (see JEI Report No. 19B, May 14, 1999).

Addressing broader issues, Hun Sen said that he expected Japan to play a major role in helping to ease the economic gaps that exist among Southeast Asian countries, especially those in the Mekong Delta region. Mr. Obuchi responded by suggesting that steps be taken to strengthen the solidarity of Asean members. He added that Japan might provide $2.5 million to facilitate communications among the group's newer members &emdash; Cambodia, Laos, Myanmar (formerly Burma) and Vietnam &emdash; and its founding members &emdash; Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

The two men also discussed the Khmer Rouge tribunal, a matter that has attracted international attention. A number of former Khmer Rouge leaders, who allegedly are responsible for the deaths of more than 1,000,000 Cambodians in second half of the 1970s, have resurfaced in recent years but have yet to be prosecuted or punished. Hun Sen assured Mr. Obuchi that progress is being made. He also mentioned a proposal to involve foreign investigators, possibly from Japan, in the proceedings.

In his meeting with Laotian President Khamtai Siphandone, Mr. Obuchi promised that in March, Japan would dispatch a fact-finding mission to evaluate the state of the country's economy. The goal is to establish a temporary advisory committee that could assist Vientiane over a two-year period in the field of macroeconomic policy management. Japan also will support Laotian efforts to launch a special economic development zone along the Laos-Thailand border. Moreover, Mr. Obuchi announced, Tokyo will provide up to ¥836 million ($7 million) in grants for scholastic programs, cultural projects and food aid. With respect to G-8 summit issues, Laotian Prime Minister Sisavath Keobounphanh asked the Japanese premier to emphasize the need to improve basic education and information technology in developing nations and to promote trade with them.

In Thailand &emdash; a primary beneficiary of Japan's multifaceted approach to helping stumbling East Asian economies get back on their feet (see JEI Report No. 11B, March 19, 1999, and No. 38B, October 8, 1999) &emdash; Mr. Obuchi promised Prime Minister Chuan Leekpai that Tokyo would take steps to expand private investment flows, which remain far below precrisis levels. A mission will be dispatched to Bangkok in February to examine investment possibilities, especially those involving small and midsize businesses. Another team of experts, led by Keidanren (Japan Federation of Economic Organizations), Japan's most influential business organization, will arrive in March.

Touching on trade liberalization, Mr. Obuchi conveyed to his counterpart the importance of starting a new round of global trade talks as quickly as possible under the auspices of the World Trade Organization. Talks to launch another series of negotiations collapsed in early December amid massive protests and widespread intransigence among the WTO membership (see JEI Report No. 46B, December 10, 1999). Mr. Leekpai suggested that advanced industrialized nations should lead the way by lowering their barriers to give developing nations more export opportunities.

Strengthening ties with Southeast Asia long has been a foreign policy priority for Tokyo. Mr. Obuchi's tour emphasized that this objective is no less important today &emdash; especially as Japan prepares to host the G-8 summit on Okinawa. Indeed, by soliciting views in several Asean capitals, Mr. Obuchi hopes to "pay sufficient heed to Asian voices" at the upcoming meeting of the world's major economic powers. In short, by working both to strengthen bilateral ties and to amplify Southeast Asia's voice on the international stage, Tokyo again has underlined its commitment to the region.

The views expressed in this report are those of the author
and do not necessarily represent those of the Japan Economic Institute

Issue Index aaaa 2000 Archive Index aaaa Subscriber Area aaaa Home