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Press Briefing 12 September 1999

1. Issues discussed in the Japan-Russian Federation bilateral meeting
2. Japan's position on Russia's accession to the World Trade Organization (WTO)
3. Determination to conclude the Japan-Russia peace treaty by the year 2000
4. Efforts of the Government of Japan to continue to stimulate domestic and regional economic growth
5. Japan's position on the possible dispatch of troops as part of United Nations peacekeeping operations

Press Briefing 12 September 1999

1. Issues discussed in the Japan-Russian Federation bilateral meeting

   Mr. Sadaaki Numata: Good evening. Sorry to have kept you waiting a bit. I will give you a read-out of the meeting between Prime Minister Keizo Obuchi and the newly-appointed Prime Minister Vladimir Putin of the Russian Federation, attributable to the Japanese spokesperson.

   The meeting lasted for about half and hour from about 6:10pm to 6:40pm. The main subjects discussed were the Russian Federation's reform efforts and Japan-Russia bilateral relations, including the peace treaty negotiations. Those were the main issues and also the idea of Japan and Russia working closely together on regional and global issues was discussed. There was also a brief reference to the hostage incident in the Republic of Kyrgyz, in which four Japanese nationals have been taken hostage, and some reference to the situation in Dagestan in Russia.

   Prime Minister Obuchi started by expressing his pleasure about meeting Prime Minister Putin for the first time and congratulated him on his appointment. He expressed the hope that as Russia approaches its parliamentary election in December, Russia's stability will be ensured and that the reform efforts in Russia will continue. He expressed confidence in Prime Minister Putin's leadership. He said "I am confident about your leadership ability because you are the person whom President Yeltsin trusts so much." He made a reference to the bomb incident in Moscow on 9 September and expressed his condolences to those people who lost their lives. He also referred to the incident in Kyrgyz by saying he was very appreciative of Russia's offer for help in trying to resolve this problem. He referred to the situation in Dagestan, commenting that he understood that the situation has become more tense, and he said that Japan, for its part, firmly takes the position of not tolerating any kind of terrorism, that terrorism should be condemned. He expressed the hope that this unfortunate situation will be resolved and calmed down as quickly as possible through the efforts of Prime Minister Putin and others.

   Prime Minister Putin in response expressed his thanks for Prime Minister Obuchi's congratulations on Prime Minister Putin's appointment. Then they discussed Japan-Russia bilateral relations. Prime Minister Obuchi noted the flurry of positive events taking place in Japan-Russia relations over the past month or so. There was the vice-ministerial level negotiation on the conclusion of the peace treaty. The Japanese Minister for Defense visited Russia and First Deputy Prime Minister Viktor Khristenko of the Russian Federation visited Japan in early September for the Governmental Committee Meeting on Trade and Economic Relations. Prime Minister Obuchi noted with pleasure the fact that there is this seamless, ongoing high-level dialogue in political, security, economic and other diverse fields.

   Prime Minister Obuchi also referred to the fact that Japan did decide to resume the extension of the untied loan to Russia when we made a pledge for US$1.5 billion from the Export-Import Bank of Japan to Russia, out of which US$400 million was dispersed some time ago. There is US$1.1 billion pending, but in light of the consultations between Russia and the International Monetary Fund (IMF) in light of the results of the Paris Club meeting on debt rescheduling, Japan did decide to resume this loan - that is to start providing the remainder of the loan. Prime Minister Obuchi said that the first installment of the remaining US$1.1 billion, in the amount of US$50 million, has already been paid into the Russian account.

   Prime Minister Obuchi also referred to the first "free" visit by the former inhabitants of the Northern Territories and their families which took place yesterday, 11 September and today, 12 September. Some 44 people, comprising former inhabitants, their spouses and their children, visited one of the islands in the Habomai Islands called Shibotsu. They went to see their old homes and I think they safely returned to Hokkaido today. He referred to that as an example of how the agreement between Prime Minister Obuchi and President Boris Yeltsin of the Russian Federation at the time of Prime Minister Obuchi's visit to Moscow in November last year is being steadily implemented and is producing positive results.

   I will also talk about the dialogue at the level of the leaders and the peace treaty negotiation and then I will give you Prime Minister Putin's response to that. Prime Minister Obuchi said that it is important to keep up this momentum of positive developments in Japan-Russia relations in anticipation of the visit to Japan by President Yeltsin. We would like to continue to work closely with the Russian side to prepare for this visit so that the visit will be highly significant. Prime Minister Obuchi said that with respect to the peace treaty negotiation, it was his intention to do his utmost in cooperation with President Yeltsin to realize the agreement between President Yeltsin and then Prime Minister Ryutaro Hashimoto at Krasnoyarsk, which is for both sides to exert the utmost efforts to conclude the peace treaty on the basis of the Tokyo Declaration by the year 2000. There has been this standing invitation from Prime Minister Obuchi to President Yeltsin to visit Japan sometime this autumn, and in reference to this, Prime Minister Obuchi said that we are now already in September, so we are coming to a time where we should decide on the actual timing of the visit. He asked Prime Minister Putin to convey to President Yeltsin this desire on the part of Prime

   Minister Obuchi himself to pin down the date of the visit.

   In that connection, Prime Minister Obuchi said that he felt that President Yeltsin and himself should meet as frequently as possible - either officially or unofficially -- to talk about the prospects for developing Japan-Russia relations further. He felt that it is important for the two leaders to meet each other directly to talk about the possibility of developing Japan-Russia relations in all their aspects. He said that through the continuation of such frequent and close dialogue between the two leaders, we should be able to strengthen the multi-faceted and multi-layered dialogue and cooperation between our two countries, thereby working toward fundamental and dramatic progress in our bilateral relations. Then he handed to Prime Minister Putin his personal letter to President Yeltsin, saying that this letter spells out the very deep sentiment on the part of Prime Minister Obuchi, based on the sort of points that I have just outlined, and he asked Prime Minister Putin to transmit this letter to President Yeltsin.

   Prime Minister Putin responded to all this by saying first that Russia has abided by all the agreements reached between President Yeltsin and the previous Russian prime ministers on the one hand, and Prime Minister Obuchi on the other, and Russia had consistently abided by the agreement reached between President Yeltsin and Prime Minister Hashimoto in the Krasnoyarsk meeting in November in 1997. Now Prime Minister Obuchi is a party to the Yeltsin-Hashimoto agreement, and with Prime Minister Obuchi's participation in this, the content of the agreement has expanded and is being expanded. In fact, what was originally the Yeltsin-Hashimoto agreement has become a Yeltsin-Hashimoto-Obuchi agreement, with the content being expanded under Prime Minister Obuchi.

   With respect to the peace treaty negotiations -- as you know there was a proposal put forward by the Japanese side at the time of President Yeltsin's visit to Japan in April last year, as well as a Russian proposal which was put forward at the time of Prime Minister Obuchi's visit to Moscow in November -- since this is under negotiation, I am sure you would like to ask me what the proposals are. I am not at liberty at all to comment about that. Most recently, when Prime Minister Obuchi and President Yeltsin met at the time of the G8 Summit in Cologne, President Yeltsin said that it was really his strong intention to conclude the peace treaty through the demarcation of the national boundaries. Now that is in the background. Prime Minister Putin said today that with these two proposals on the table the two sides should seriously consider these proposals with a view to concluding the peace treaty negotiations. About President Yeltsin's visit to Japan, Prime Minister Putin said that the Russian side will go forward with the preparation with a view to realizing the visit as soon as possible.

   With respect to the visit to the islands by the former inhabitants and their families, Prime Minister Putin said that this is a very good example of how the Russian side, for its part, is faithfully implementing the agreements reached at the leaders' level. Prime Minister Putin expressed his high appreciation of Japan's decision to go forward with the remainder of the US$1.5 billion Export-Import Bank loan, and he said that this was very important for Russia economically, psychologically or spiritually and politically, because this decision was made at a time when the Russian economy is about to regain its vigor. He also said that it is Russia's firm intention to repay all the debt obligations that Russia has incurred.

   Prime Minister Putin also said with respect to the peace treaty negotiation that he felt that the negotiation is evolving in a smooth manner.

   Prime Minister Obuchi concluded the meeting by saying that Japan and Russia share common positions with respect not only to regional issues but also to global issues. He expressed the confidence that the two countries can continue to work closely together as constructive partners for the peace, stability and prosperity of the region in accordance with the spirit of the creative partnership which was the theme of the Moscow Declaration issued on the occasion of Prime Minister Obuchi's visit to Russia in November last year. That is my announcement and I would be delighted to respond to any questions you may have.

2. Japan's position on Russia's accession to the World Trade Organization (WTO)

   Q: Has Prime Minister Obuchi made any strong statements of support for Russia's entry to the WTO within 1999?

   Mr. Numata: The topic of the World Trade Organization (WTO) did not come up today, but as a part of the Hashimoto-Yeltsin plan, we have been encouraging Russia to engage itself more actively in the international community. That reminds me, let me mention one point which I forgot to mention in that context and then come back to your question. Prime Minister Obuchi did say that he did welcome Russia's participation in this Asia-Pacific Economic Cooperation (APEC) process. Japan has in fact played a leading role in encouraging Russia's participation in APEC, and Japan is prepared to talk frankly about any issues relating to APEC with Russia. So in a similar spirit, we have been encouraging Russia to engage itself in the international community and we have been sharing our expertise with Russia on WTO-related subjects. That is the general background, but the question of the WTO itself did not come up today.

3. Determination to conclude the Japan-Russia peace treaty by the year 2000

   Q: You were talking about the peace treaty signing in 2000. It looks like that goal may not be reached. If it is not reached, can you explain what might happen and why it not be might reached?

   Mr. Numata: There is this shared objective of concluding the peace treaty by the year 2000 shared between Japan and Russia, shared between the two leaders, which has been reaffirmed time and again. That is the framework in which all these discussions are taking place. It continues to be our shared objective and it certainly continues to be our firm intention to do everything possible to reach that goal. The negotiators are working very hard to achieve that goal. They do not normally engage in the exercise of indulging in pessimistic forecasts.

4. Efforts of the Government of Japan to continue to stimulate domestic and regional economic growth

   Q: This last week, after the announcement of seasonally-adjusted real GDP growth at 0.2% in the April-June quarter, Prime Minister Obuchi made a very encouraging statement in Tokyo that he intends Japan to be an engine of growth for Asia's recovery. Can you elaborate on how Prime Minister Obuchi intends to pursue that policy?

   Mr. Numata: Firstly, we are very keenly conscious that Japan plays a very important role in the whole Asian economy. Japan's GDP accounts for about two-thirds of the whole GDP of the Asian countries combined. We are keenly aware of our responsibilities as well as expectations on the part of our Asian friends. It is out of this recognition that despite our own economic difficulties over the past two years or so, we have been providing very substantial support to our Asian neighbors, which have been afflicted with the economic and financial turmoil. Our total support that we have committed to date amounts to US$80 billion, out of which US$68 billion has been materialized, partly by Prime Minister Obuchi. It is our intention to continue to support our Asian neighbors. At the same time, we are also keenly aware that Japan's economic performance does have a great deal of impact on the Asian economies. We have been engaged in very serious efforts to put the Japanese economy back on the track to sustained growth. That is of course in our own interests, but we also realize that it is also in the interest of our Asian neighbors, because to the extent that we can achieve domestic demand-led growth, that will benefit our Asian neighbors in terms of helping their exports and so forth. Those are the two important factors in the background.

   As far as the Japanese economy itself is concerned, there was positive growth in the first quarter. As you know, the January-March figure was 2.0% over the previous quarter. We did register another positive growth in the second quarter contrary to some expectations, because there was some concern that we might register negative growth in the second quarter. But this time the quarterly growth figure is 2.0%, which does mean it should be entirely possible for us to achieve the target of 0.5% for FY1999. Those are encouraging signs. If you look into the components of this growth, you will know for example that private consumption is picking up. There is a very substantial increase in housing investment. Those are on the positive side. There are some elements of uncertainty with respect to non-housing investment by the private sector and public investment by the government sector has decreased a bit, but then again public investment had been increasing at a very rapid rate because of government budget policy to reflate the economy. We do feel that we have encouraging signs for recovery, that we are on the run-up to recovery. It is certainly Prime Minister Obuchi's firm intention to do all that is possible to make sure that this trend will continue. If I may use a figurative expression -- to make sure that the knees do not buckle.

   The thinking on this question consists of two things. One is that we have been doing very much, despite our own difficulties, to help our Asian neighbors through the New Miyazawa Initiative and other forms of support -- Official Development Assistance (ODA), special yen loans and so forth. It is our intention to continue that, but at the same time, it is vitally important for Japan's own economy to pick up for the benefit of Asian countries.

   Q: Among the methods to help ensure the Asian recovery, Prime Minister Obuchi has not yet announced a second supplementary budget to my knowledge. When will he announce this?

   Mr. Numata: He will first have to be re-elected as President of the Liberal Democratic Party (LDP). He has instructed his Cabinet colleagues on further public investment expenditure in terms of what we call "discretionary reserve." The question of the second supplementary budget is very actively discussed and it would be an educated guess to say that if Prime Minister Obuchi is re-elected as President of the LDP, people will be focusing very actively on the formation of the second supplementary budget.

   Q: What about the size?

   Mr. Numata: The size? I think it is a bit premature to talk about the size, but if you are following the Japanese media reports, there are all sorts of figures being floated.

5. Japan's position on the possible dispatch of troops as part of United Nations peacekeeping operations

   Q: I am also interested in East Timor. Today, Prime Minister Obuchi said in his meeting with President Kim Dae Jung, there might be possible opposition from Asian countries to Japanese troops being sent to Indonesia because of the World War II history, when Japan invaded and occupied may Asian countries. Does this preclude any type of Japanese participation in any possible United Nations personnel dispatch to East Timor?

   Mr. Numata: Let me be precise about what Prime Minister Obuchi said in the trilateral meeting on this issue. Prime Minister Obuchi said that the primary responsibility for restoring security, or law and order, rests with the Government of the Republic of Indonesia. If it proves to be the case that the Government of Indonesia cannot fulfill its responsibility, we should urge Indonesia to accept the support of the international community and restore law and order. That point, echoed by President William Jefferson Clinton of the United States of America and by President Kim Dae Jung of the Republic of Korea, is included in the Joint Press Statement issued after the trilateral meeting. When we talk about the support of the international community, there is very active deliberation going on about a possible international security presence. The team from the Security Council is in Indonesia discussing this and other ideas with the Government of Indonesia, so we need to see how these deliberations will evolve. At this point, it is a bit early to prejudge exactly what form and shape that it might take.

   Another thing is that we have our own domestic arrangements for our contribution to United Nations peacekeeping activities. We have the legislation for that, and the legislation was formulated as a result of very intense public debate. One of the factors in the debate was -- and to some extent continues to be -- the sensitivity on the part of our Asian neighbors because of the memories of the past. That is a factor that we do need to take into account. The way the legislation stands now, there are certain aspects of United Nations peacekeeping operations in which our Self Defense Forces cannot take part. In the Kingdom of Cambodia, we dispatched Self Defense Forces to participate in the United Nations peacekeeping activities but they took part in logistic support operations. That is the framework that now exists. But again I would point out that this idea of an international security presence is being explored very actively but still remains to be thrashed out. There are ongoing deliberations on the subject, and as far as I understand, even the Commonwealth of Australia, which is very actively putting forward this idea of United Nations forces or international security presence, is also saying that it needs to be accepted by Indonesia. Thank you very much.