Press Conference by the Press Secretary 19 December 1995

1. First investment project of the Regional Venture Fund (RVF) in the Far Eastern region of the Russian Federation
2. Recent security agreement between Australia and the Republic of Indonesia
3. Potential Japanese contribution to the light- water reactor project of the Korean Peninsula Energy Development Organization (KEDO)
4. Situation on the Korean Peninsula
5. Lessons learned by the Government of Japan one year after the Great Hanshin/Awaji Earthquake
6. Aid mechanisms for the Far Eastern region and Eastern Siberia of the Russian Federation

1. First investment project of the Regional Venture Fund (RVF) in the Far Eastern region of the Russian Federation

   Foreign Ministry Spokesman Hiroshi Hashimoto: Good afternoon, ladies and gentlemen. First of all, I would like to explain to you very briefly about the first investment contract by the Regional Venture Fund (RVF). The Regional Venture Fund recently decided on its first investment project. The investment contract for the project was concluded on 18 December in Vladivostok between the RVF and Prom Acfes, an aluminum sash maker in the city. As you know very well, Japan has pledged to extend loan assistance of about US$4.1 billion, and grant aid of about US$400 million. This grant aid includes humanitarian assistance, technical assistance, and assistance for the elimination of nuclear weapons. Under the technical assistance program, Japan has established the Regional Venture Fund, in cooperation with the European Bank for Reconstruction and Development (EBRD), for small and medium-sized private enterprises in the Far Eastern region and Eastern Siberia of the Russian Federation. Total funds amount to US$50 million, US$20 million of which is provided by Japan for technical assistance. Development of private enterprises is vital to the development of a sound market economy. The RVF provides financial resources for plants and equipment, as well as advice from Japanese experts in business management, and this aims at promoting the growth of Russian private enterprises, both in capital and technology, thereby harnessing Japanese experience and knowhow. We are very glad to know that the first contract was signed.

2. Recent security agreement between Australia and the Republic of Indonesia

   Q: Australia and Indonesia signed a security agreement recently. Can you tell me the reaction of the Government of Japan to this, and the potential impact it might have on the ASEAN nations and security dialogue?

   A: First of all, both Australia and the Republic of Indonesia are now very important members of Asia-Pacific Economic Cooperation (APEC), and we are very glad that those two nations have further strengthened their friendly relations at this time by signing the security treaty. You may recall that, in the past, a long time ago, there was a conflict between Australia and Indonesia. We are confident, that by signing the treaty, the friendly relationship between the two countries has become solid. The signing of this treaty will enhance the security and peace in the Asia- Pacific region.

3. Potential Japanese contribution to the light-water reactor project of the Korean Peninsula Energy Development Organization (KEDO)

   Q: The Korean Peninsula Energy Development Organization has reached a basic agreement with North Korea, but the entire cost is expected to be much more than US$4 billion as initially estimated. Could you tell us what percentage of the cost Japan is ready to shoulder?

   A: I understand that there have been speculations on the figure; though at this time, the countries of the Korean Peninsula Energy Development Organization (KEDO) are basically agreed on how this light-water reactor project will be implemented, as far as the cost shared by the countries concerned, that will depend on the survey which KEDO is going to conduct. Until KEDO works out a concrete program, the Japanese side is not in a position to determine how much the Government of Japan should bear. But we understand that a central part of the financial contribution will be born by the Government of the Republic of Korea, and the Government of Japan will play a substantial role. But as far as the concrete figures are concerned, still, we have got to wait for some time to come.

   Q: It is generally believed that the Republic of Korea will pay 50% or more of that, and Japan, maybe 10%?

   A: There are speculations about this. What we understand is that the Government of the Republic of Korea is determined to play a central part in this. But we do not know whether that means that the Government of the Republic of Korea is really ready to bear more than 50% of the cost of the project. We have not yet reached any sort of agreement on the sharing of the cost. First of all, the countries of KEDO decided to ask experts to work out concrete cost estimates, and only after those are presented to us will the countries concerned decide how much each member will contribute.

   Q: Another related question -- could you tell me whether there are officially decided countries that can join these three countries in KEDO?

   A: The United States of America, the Republic of Korea and Japan have been endeavoring to ask other friendly countries to join KEDO. Especially, the United States has been doing its best in Europe, and Japan has been concentrating on Southeast Asia. The European Union is now in the process of deciding how much they will contribute as the European Union; but still we have not been informed how much they will contribute. When Minister for Foreign Affairs Yohei Kono attended the London Peace Implementation Conference on Bosnia-Herzegovina, while he said that Japan is ready to positively participate in the Bosnia-Herzegovina reconstruction program, at the same time, he reminded our colleagues in Europe that KEDO is also important in a global context. Our efforts to invite the positive involvement of other countries will continue.

4. Situation on the Korean Peninsula

   Q: Has the threat of a military confrontation between North and South Korea increased because of recent developments -- one, the floods in North Korea, and two, the political turmoil in South Korea?

   A: First of all, when you talk about the North Korean military concentration near the demilitarized zone (DMZ), the Japanese Government has been independently collecting information, and also communicating with our friends in other countries on this, and in the information which the Government of Japan has obtained so far, there are some views that we should pay very careful attention to the movement of North Korean forces over there. But, apart from that, the Government of Japan does not want to further elaborate on this. What I would like to say is that, basically, the Foreign Ministry and the Defense Agency share the basic evaluation of the North Korean forces along the DMZ. You talked about the possible influence of the domestic situation in the Republic of Korea on the North- South dialogue. Is that what you mean?

   Q: We can do dialogue, but if we go back to military confrontation, could you address the possibility of an accidental confrontation resulting because of this build up of North Korean forces on the border?

   A: All of us know that about 2/3 of all of North Korea's forces have been deployed along the DMZ, and that they have been endeavoring to be ready to react promptly if any crisis happens. We have been aware of this. What I can say is that, together with our friends in other countries, we have been carefully watching the situation of the North Korean forces over there.

   Q: Now we can do the impact on North-South dialogue.

   A: As far as that is concerned, unfortunately, there has not been any progress at all, so I don't know whether what you mentioned has given further negative impact upon the South- North dialogue. In any case, we hope that they will reopen the dialogue.

5. Lessons learned by the Government of Japan one year after the Great Hanshin/Awaji Earthquake

   Q: I am working on a story on a year after the Kobe earthquake, what lessons has Japan learned from that, and what can southern California learn from that. I am with The Los Angeles Times. One of the areas I am looking at is not only building standards and crisis management, but also international cooperation. One of the areas of concern, as you recall, back in January, was a perception by foreigners that the Japanese Government was not efficiently accepting all these offers of international aid and volunteers. So, I am wondering if, now that a year has passed, what the Foreign Ministry or what the Government has done, if anything, to facilitate that process.

   A: What I can say is as follows. Crisis management is very important for us. Although it may not be very appropriate for us to compare, we had learned a lot from the Great Hanshin/Awaji Earthquake, and when the Aum sarin incident took place, the Government of Japan reacted more rapidly than at the time of the Kobe earthquake. Very recently, the Government of Japan hosted a conference on how to deal with earthquakes, inviting friendly countries in the Asia-Pacific region, so our aim is to improve our scheme to cope with crises. This is one thing. The other thing is that many people are pointing out that, in Japan, volunteer activities were not widely popular. But the Japanese people have learned a lot about the importance of volunteer activities, and since that time, many more Japanese people are interested in this subject. I understand that new private organizations have been born since that time and so on. As far as the offers of other countries' assistance, which you mentioned, are concerned, during the crisis, I am sure that the Government did its best to accept the kind offers from various countries. However, for example, right after the earthquake hit, the local police and people concerned had to concentrate on the immediate rescue and so on, and it took rather a long time for us to start receiving aid from the other countries and so on. So, I hope we also have learned many things from this. Although we do not want to see any big earthquakes of this scale happen in the future, we should keep in mind that there are lots of countries and people who were very kind to offer aid to Japan. I think the Japanese Government and Japanese people should very much appreciate that.

   Q: Have you made any concrete proposals to improve the facilitation of international volunteers or aid if there is another earthquake?

   A: Personally, I am not aware of this -- what sort of concrete projects there may be. I don't know whether any regulations matter; probably our preparedness or our understanding about voluntarism is what matters here. I hope that we have learned a lot from that sad experience.

6. Aid mechanisms for the Far Eastern region and Eastern Siberia of the Russian Federation

   Q: Just out of curiosity, why is the European Bank for Reconstruction and Development involved in Asia?

   A: In fact, the EBRD has similar facilities with other G-7 countries, and as far as Japan is concerned, Siberia and the Far Eastern region of Russia is near to us -- and while we have been extending other sorts of technical assistance, such as the Japan Centers, which have been set up in Moscow, Khabarovsk, or the Republic of Kyrgyzstan, but as far as this particular Regional Venture Fund is concerned, we have decided to extend this kind of aid to the side nearest Japan.

   Q: There are restrictions to Japanese economic aid to Russia.

   A: It is probably not appropriate to call these restrictions. On the basis of the consultations among the G-7 and the EBRD, we have been trying to allocate our assistance in an appropriate way, so that, for example, one particular part of Russia will not be neglected.

   Q: This strikes me as a novel way to get around the restrictions on bilateral aid to Russia left over from World War II, by going to a multilateral development bank. Is this an accurate way to look at this from a foreign policy perspective?

   A: As far as the bilateral aid is concerned, we would like to expand our bilateral relations in a balanced way. When I say in a balanced way, we cannot forget about the existence of the territorial issue, but at the same time, we are determined to encourage the democratization process in Russia. In view of this, if we think it appropriate, we are ready to extend economic aid to Russia.