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Statement by Minister for Foreign Affairs Masahiko Koumura on the Occasion of the ASEAN 10 Plus 10 Meeting

July 27 1999

I. Celebrating the Realization of ASEAN 10

   I would like to express my heartfelt congratulations to the member states of the Association of Southeast Asian Nations for having realized ASEAN 10, a long-held goal which had been sought since ASEAN was established 32 years ago, with the admission of the Kingdom of Cambodia in April of this year. ASEAN has continuously given priority to dialogue in this region of diversity whose members differ considerably in their political regimes and in their economic levels of development. Respecting harmony and striving to foster relations of mutual trust, ASEAN has made continuous efforts for peace and stability. The results of those efforts can now be seen in the realization of ASEAN 10, which brings together the entire Southeast Asian region under one roof. Japan highly commends the ceaseless efforts by the ASEAN states in realizing ASEAN 10 and the great historical significance of this achievement. Japan strongly hopes that ASEAN will continue to develop as a stabilizing power in Asia. Japan believes that its position is shared by the distinguished Foreign Ministers of the dialogue partners.

II. Japan's View of the Current Asian Economic Situation

   Two years have now passed since the outbreak of the currency crisis in 1997. This has been a time during which many of the Asian states have faced unprecedented economic challenges and have responded to those challenges by serious reform efforts. The international community including Japan, perceiving the Asian economic crisis as a global issue, has offered its maximum assistance.

   As a result of the painful reform efforts on the part of Asian states and the assistance from the international community, we have, since the beginning of this year, noted welcome signs of recovery in the Asian economies: declining interest rates thanks to stabilizing currencies, appreciation of stock prices, recovery in output among others.

   At the same time, if there are to be a true and fundamental recovery to the Asian economy and sustainable development, it is important that the Asian states keep up their efforts, and that the international community continue to support those efforts so that structural reform will be achieved, human resource will be developed, and social safety nets will be established.

   Considering the progress so far achieved, I believe that, on the occasion of this year's Post-Ministerial Conferences, unlike last year's PMC, which was clouded by the dark shadow of the economic crisis, it is of utmost importance that we both welcome and appreciate the bright signs that are emerging in the Asian economies. It is also extremely important that we send a positive message to the international community to the effect that we have agreed to promote even further the cooperation among ASEAN states and dialogue partners in order to achieve a full-fledged recovery of the Asian economies and its sustainable development in the 21st century. In this, I ask for the support of all of the distinguished Ministers gathered here today.

III. Japan's Approach

   In view of the serious fact that the Asian countries, which are important partners for Japan, have been mired in economic crisis, Japan, despite its own difficult economic and fiscal situation, has provided its utmost assistance to them. To date, Japan has announced approximately US$80 billion in assistance for Asia, by far the largest amount of assistance provided by any country. Moreover, we are steadily advancing its implementation, and approximately US$68 billion has already been implemented. Japan will endeavor to identify as precisely as possible the needs of each country in an effort to continue to provide appropriate assistance.

   Furthermore, as we see increasing signs of recovery in the Asian economies, Japan will dispatch the Mission for Revitalization of Asian Economy, headed by Mr Okuda, Chairman of the Japan Federation of Employer's Associations, in order to better understand what approaches Japan and the Asian countries should take to ensure a fundamental recovery of the Asian economies and sustainable development. The Mission will visit six East Asian states from late August to early September - the Republic of Korea, the Kingdom of Thailand, Malaysia, the Republic of Indonesia, the Republic of the Philippines, and the Socialist Republic of Vietnam. We will also strive to identify the situation in other countries by dispatching advance missions as well as through consultations between our embassies and the respective governments. The Okuda Mission will bear the important responsibility of preparing recommendations for Asian economic recovery in the 21st century. They will be submitted to Prime Minister Obuchi, so that, in addition to providing financial assistance as a response to the currency crisis, Japan can extend cooperation in human resource development and legal institution-building. Japan will contribute its wisdom and leadership in other areas as well.

   Next, I would like to outline four points which Japan feels are priority issues to be addressed in the medium to long term, in order to ensure sustainable development of the Asian economies. Some of these are areas in which Japan can take a coordinated approach with other dialogue partners. With their consent, Japan wishes to take up cooperation in these areas as an achievement of this PMC, especially the 10 + 10.

   First of all, we must cooperate to narrow the disparities within the region among ASEAN 10. I underlined at the outset the significance of the realization of ASEAN 10. I am fully aware, however, of the challenges which ASEAN 10 faces, in particular the difficulties which arise from economic disparities within the region. Japan intends to provide assistance for projects such as the Hanoi Plan of Action, through which efforts are being made to strengthen regional cooperation within ASEAN, and intends to actively step up assistance for sub-regional projects such as the Mekong River Basin as part of its efforts to support the development of ASEAN 10.

   Secondly, we must focus our attention on assisting the socially vulnerable. The Asian economic crisis has dealt a serious blow to these people in all countries of Asia; the poor, the elderly, women and children. Japan has focused its efforts on helping to relieve the burdens of the socially vulnerable. In fact, as Prime Minister Obuchi proposed at last year's meeting in Hanoi, Japan will attach much importance to cooperation in this area, in view of the importance of human security. Furthermore, on his recent visit to the United States, Prime Minister Obuchi reaffirmed that Japan would continue to focus on assistance for the socially vulnerable people in its joint efforts with the United States to ensure a recovery of the Asian economies. As part of this, Japan and the United States are preparing to promote joint projects to assist young children in the Philippines and Indonesia.

   The third focus is on response to globalization. In light of the fact that the enormous and sudden flows of capital on a global scale were a significant element in setting of the Asian currency crisis, Japan views as an urgent issue the need to strengthen the international financial system. From this perspective, Japan has used the G-8 Summit and other fora to actively advance debate on this matter. Japan has stated its view that it is important to develop these discussions at a global level, with emerging -market economies participating. Moreover, given that one of the causes of the currency crisis was excessive dependence on the dollar, Japan is focusing its efforts on the further internationalization of the yen. Greater trade and investment activity will also play an important role in achieving stable development of the Asian economies as the process of globalization continues. In this regard, Japan believes that the next round of World Trade Organization (WTO) negotiations must be comprehensive and concluded as a single undertaking, and that results need to be achieved quickly, within approximately three years. With that in mind, Japan intends to actively participate in the next round of negotiations with a view to strengthening the multilateral trading system. We need to bear is mind, however, their globalization, while improving economic efficiency, will also bring about greater standardization of societies which will make them only increasingly vulnerable. Without diversity, societies may not be able to withstand unexpected changes in the environment. I, therefore, would like to call on the dialogue partners to pay due attention to the potential social impact of globalization. Only by so doing can we ensure "Globalization that is kind and gentle to the humankind" and "a market economy with human face" built on cultural diversity.

   Fourthly, let me state clearly that Japan fully understands the extreme importance Japan's economic recovery has for the recovery of the Asian economies, and let me tell you that we are doing our utmost to achieve that. First of all, since the Obuchi Cabinet was inaugurated, Japan has quickly and boldly taken all possible measures toward recovering its economy, including measures to stabilize financial system and measures to stimulate demand. As a result, we now see positive developments in the Japanese economy as well. Specifically, during the first quarter of this year the Japanese economy achieved a 1.9 % growth on a year-on-year basis, marking the first positive growth in 18 months. Furthermore, recognizing that we must strengthen our supply-side structure and that it is imperative to respond to the severe employment situation currently prevailing in order to achieve a fundamental recovery of the Japanese economy. The Government of Japan recently announced Emergency Employment Measures and Industrial Competitiveness Enhancement Measures. Indeed, Japan is firm in its determination to sustain its efforts in order to ensure that Japan will register a positive growth in FY1999.

IV. Conclusion

   The economic crisis has not deprived the Asian states of the fundamental elements that have underpinned the high economic growth of Asia: our high rates of saving, the hard-working spirit of our peoples, and our ability to manufacture excellent products. The currency and economic crises which struck Asia can be seen as distortions which occurred in the process of rapid economic development, or otherwise as an adjustment necessary as a result of the delay in effecting structural reforms in the financial sector among others. As long as the nations of Asia build on the lessons of this crisis to keep up their reform efforts the international community maintains its assistance for such efforts, I am convinced that the Asian economies will definitely achieve recovery and will once again enjoy robust growth.

   I would like to conclude by strongly stressing the need for 10 ASEAN states and all dialogue partners to work in unity as we continue to cooperate to ensure economic recovery in Asia, and thereby realize the vision for Asia in the 21st century, proposed by Prime Minister Obuchi at the end of last year in Hanoi, a vision in which the 21st century will be a century of peace and prosperity built on human dignity.