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At the United Nations Conference on the World Financial and
Economic Crisis and Its Impact on Development

NEW YORK, 25 JUNE 2009

Mr. President,
Distinguished Delegates,

I am honoured to speak on behalf of the Government of Japan, as we gather in New York to deliberate on the world financial and economic crisis and its impact on development. Before I begin, allow me to express my deep appreciation to the President of the General Assembly for his initiative to organize this conference which gives all Member States the opportunity to express their views and deliberate on this important issue. I would also like to express my gratitude to the distinguished Permanent Representatives of the Netherlands and Saint Vincent and the Grenadines for their tireless efforts to facilitate the negotiation of the outcome to be adopted by consensus.

Today, we are facing yet another global challenge - a world financial and economic crisis that is said to occur only once in a century - in addition to issues such as climate change, increasing food prices and violent fluctuations in energy prices. The impacts of this crisis on the vulnerable populations in developing countries are particularly devastating, threatening to wipe out the gains that we have made to date towards the achievement of the Millennium Development Goals.

The region to which Japan belongs, East Asia, experienced a serious economic crisis in the late nineties. One of the most important lessons we learned was that, in the face of a sudden economic downturn, it is always the vulnerable and voiceless people who suffer the most and whose lives, livelihood and dignity are the first to be threatened.

This is how Japan began making efforts to advocate human security. In tackling these threats that creep up on individuals across national borders, each country and the international community as a whole should make efforts to take people-centred measures that are comprehensive and multi-sectoral. Such measures should focus not only on protecting individuals and communities but also on empowering them to take on the crisis themselves. We strongly believe that the human security approach provides us with very relevant guidance in addressing the crisis we currently face.

Mr. President,

Staying focused on people and taking care not to lose sight of the human face behind the crisis, the international community, developed and developing countries alike, should work together and take all possible actions, including fiscal and monetary measures, for the recovery of the world economy. In this endeavour, deliberations at the national, regional and global levels as well as within fora such as the G8 and the G20 should not be considered to be mutually exclusive but rather as mutually reinforcing. At the end of the day, they should all contribute to overcoming the crisis and paving the way to sound development.

Drawing lessons from the crisis that we endured during the nineties, Japan stresses the crucial importance of taking the following measures, which can be divided roughly into three categories:

  • First, to get the financial market back on its feet by providing liquidity to maintain the integrity of the banking system, carrying out capital injections into financial institutions and disposing of non-performing loans;
  • Secondly, to stimulate the economy by mobilizing large-scale fiscal outlays;
  • And thirdly, to learn from the history following the Great Depression of 1929 and oppose protectionism, and to strengthen the free trade system by an early conclusion of the WTO Doha Development Agenda.

The necessity of these measures was confirmed at the London Summit held in April this year.

In response to the crisis, Japan thus far has undertaken fiscal stimulus totalling approximately 270 billion US dollars, while acutely recognizing the equal importance of fiscal sustainability. I call on other Governments to acknowledge the importance of strengthening growth and stimulating domestic demand, and to resolve to implement further actions as they become necessary.

Asia has the largest growth potential in the world, and is expected to contribute to the global economy as a "center of growth open to the world." It is therefore important that Asian countries take swift and concerted action to alleviate the impact of the current crisis, strengthen growth potential and stimulate domestic demand.

Japan has pledged to provide its ODA of up to 20 billion US dollars for the Asian region, and has also pledged 22 billion dollars to support trade finance, mainly in Asia. Part of the Japanese assistance will be provided in the form of "Emergency Budget Support ODA Loans" totalling 3 billion US dollars, to be extended flexibly in cooperation with the World Bank and the ADB, in order to help boost domestic demand in Asian countries.

International Financial Institutions have a pivotal role to play in the efforts to overcome the current crisis. Japan values the swift response of the IMF and the World Bank to the crisis, as well as their reform process to enhance voice and participation of developing countries. Japan also welcomes the successful conclusion of the agreement on the Fifth General Capital Increase of ADB. In this context, the amendments to the Agreement of the International Monetary Fund and to the Agreement of the International Bank for Reconstruction and Development have been presented to the Japanese Diet for consideration. We hope to conclude the process for the formal acceptance of these amendments at the earliest opportunity.

Mr. President,

It is the view of the Government of Japan that, even in the face of economic crisis, donor countries should deliver on their existing commitments on development in a timely and steadfast manner, so that the progress towards the MDGs will not be reversed.

At the same time, each country should take on the primary responsibility for its own development with a strong sense of ownership, a task that is all the more critical in times of difficulty. Japan recognizes that a wide range of financial resources not only from ODA but also from domestic resources and foreign direct investment need to be mobilized in order to meet global development needs.

The fact, however, is that financial resources are not unlimited. We therefore need to work to enhance further the coordination among donor countries, and put the available resources to their most effective and efficient use. At the same time, we should utilize a "participatory approach," drawing strength from a wide range of stakeholders, from developing countries, donors and emerging economies to international organizations, private foundations, corporations and academia.

From this perspective, it will be important for all of us to engage in active discussions at the Second Global Review of Aid for Trade in Geneva next month, which will be attended by diverse stakeholders. Japan is fully committed to contribute actively to the review process.

In conclusion, let me reiterate that Japan will robustly implement its commitments, including the aid package for Asia that I mentioned earlier and the doubling of ODA to Africa through follow-up on TICAD, the Tokyo International Conference on African Development. I call on other donor countries and organizations to work with us, and carry out their existing commitments in a steady and timely fashion.

Thank you for your kind attention.

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