No. 18 — May 5, 2000


Weekly Review

--- by Marc Castellano

The 1997-99 financial and economic crisis in East Asia, while devastating for the countries caught in its grip, provided an unparalleled opportunity for Japan to demonstrate its international leadership potential. Tokyo more than met that challenge, particularly the financial aspect, unbiased observers agree. They also concur that diplomatically and otherwise, the government's engagement with East Asian nations is deeper today than it was before problems roiled the region. The latest example of this new commitment was Foreign Minister Yohei Kono's April 28-May 2 swing through East Timor, Indonesia and Singapore.

In separate talks with Indonesian President Abdurrahman Wahid and Foreign Minister Alwi Shihab, Mr. Kono pledged special grants and loans for Jakarta as well as food aid for refugees on the Maluku Islands. A diplomatic note was exchanged that effected ¥113 million ($1 million at ¥110=$1.00) in grants for the rebuilding of Way Kambas National Park, which was destroyed by forest fires. The soon-to-be-implemented loans will finance the construction of natural gas pipelines and the rehabilitation of critical railways. During his talks with Mr. Wahid and other officials, Mr. Kono emphasized Japan's ongoing support for broad-based economic and political reforms in Indonesia. At a World Bank-sponsored meeting of international donors in February, Tokyo had pledged $1.6 billion to help Jakarta implement its FY 2000 reform agenda (see JEI Report No. 6B, February 11, 2000).

In traveling to the East Timorese capital of Dili, Mr. Kono became the first Japanese cabinet member to visit the new nation. He met with independence leader Xanana Gusmao and other local principals, mainly to announce several aid initiatives, including the donation of some 8,000 radio receivers and funding for human resources development programs, and to discuss possibilities for future assistance. The Foreign minister promised that Tokyo would do its best to help East Timor master the process of nation-building. Last December, Tokyo pledged $100 million over three years to rehabilitate the war-torn country (see JEI Report No. 1B, January 7, 2000). Shortly afterward, it opened a liaison office in Dili to underline Japan's willingness to help and to facilitate communications with the United Nations Transitional Administration in East Timor, better known as UNTAET.

In Singapore, Mr. Kono reached an agreement with his counterpart, Foreign Minister Shanmugam Jayakumar, and Prime Minister Goh Chok Tong to launch a joint program aimed at helping East Timor develop its human resources. The idea is to hold Japan-funded training sessions in Singapore for East Timorese officials. The details still need to be worked out, but this initiative basically will involve providing English lessons for future diplomats and training for police officers.

On the trade front, Mr. Kono and Singaporean officials agreed to work toward an early launch of a new round of trade-liberalization talks under the auspices of the World Trade Organization. This effort had collapsed late last year in Seattle amid violent public protests and widespread governmental intransigence (see JEI Report No. 46B, December 10, 1999). As the host of this year's summit of the leaders of the Group of Seven industrial nations plus Russia, Tokyo is anxious to keep disagreement over the scope of these market-opening negotiations from intruding on its preferred above-the-fray agenda.

On bilateral issues, Mr. Kono hailed a joint study by Japan and Singapore, commissioned this past March, to examine the feasibility of a bilateral free-trade agreement. The two sides are expected to make a decision about starting formal negotiations in December, when the task force will release its final conclusions. In a marked break with previous policy, the Ministry of International Trade and Industry explicitly advocated the development of free-trade agreements in Northeast Asia in its 1999 white paper on trade (see JEI Report No. 21B, May 28, 1999, and No. 47A, December 17, 1999). Since then, Tokyo has been actively exploring the possibilities. It even is considering Mexico as a potential partner (see JEI Report No. 15B, April 15, 2000).

Japan's top diplomat and his Singaporean colleague also discussed North Korea's recent bid to join the Association of Southeast Asian Nations Regional Forum. Through periodic meetings and a number of confidence-building initiatives, this group, which comprises the 10 members of Asean and other Asian governments plus such interested outsiders as the United States, hopes to defuse security-related tensions throughout the Asian Pacific region. Mr. Kono reaffirmed that Tokyo would welcome Pyongyang's admission to ARF, seeing in such a move a way to lessen the chances of conflict originating from this historically destabilizing source. Mr. Jayakumar agreed but cautioned that including North Korea in ARF would be difficult if Pyongyang set conditions for its entry.

At each stop during his trip through Southeast Asia, Mr. Kono not only raised a range of bilateral and multilateral issues but also went over the agenda for the G-8 summit. Tokyo has promised to be the voice of Asia at the international forum. In January, then-Prime Minister Keizo Obuchi went to Cambodia, Laos and Thailand (see JEI Report No. 3B, January 21, 2000) as part of his drive to expand the region's input into the annual gathering of the world's economic powers. He also solicited the opinions of Asean members and other developing economies at the quadrennial meeting of the U.N. Conference on Trade and Development in Bangkok (see JEI Report No. 7B, February 18, 2000).

Prime Minister Yoshiro Mori continued the outreach effort during his recent meeting with the leaders of the 16 nations of the South Pacific Forum (see JEI Report No. 17B, April 28, 2000). Mr. Kono's trip to Southeast Asia no doubt will bolster the credibility of Tokyo's commitment to reflect Asian views at the Okinawan summit. It also will add to the record of strengthened Japanese diplomatic and economic leadership in Asia.

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