Press Conference Announcements by Prime Minister Ryutaro Hashimoto
at the Conclusion of ASEM2, London
April 4, 1998
MR. SADAAKI NUMATA (Ministry of Foreign Affairs) [Translation]: I would like to start the press conference given by Prime Minister Ryutaro Hashimoto. First, I would like to ask Prime Minister Hashimoto for his opening remarks.
THE PRIME MINISTER (Mr. Ryutaro Hashimoto) [Translation]: Thank you very much ladies and gentlemen of the press for coming. The ASEM meeting this time was, indeed, a very fruitful one. The first meeting, the year before last in Bangkok, was historic by the very fact that the leaders from Asia and Europe gathered together. The second meeting this time, however, was especially significant in that it took place at a time when several major Asian countries are undergoing economic and financial crisis and Europe is on the verge of launching the single currency euro. This meeting provided the leaders with an opportunity to discuss these topics very candidly.
There are two points I wish to underline. First of all, Indonesia and several other Asian countries are today faced with economic and financial difficulties. As for Indonesia, following the spadework done by the Liberal Democratic Party survey mission and a Government survey mission, I myself visited that country three weeks ago with the policy-making chiefs of the three governing parties and had an in-depth exchange of views with President Suharto. The day before yesterday, just before our meeting started, President Suharto told me on the phone that the negotiations with the International Monetary Fund were in their final stages, and asked me to convey his message to European leaders in particular, calling for co-operation as Indonesia will continue to implement steadily the undertakings it has entered into. I conveyed this message to the ASEM leaders and they were most gratified to hear it. I myself wish, once again, to pay tribute to President Suharto for his determination to carry out domestic reforms. I should also add that Japan intends to continue to take the lead in supporting Indonesia.
Secondly, how are we to achieve Japan's economic recovery? During the meeting, I explained to the leaders that the Government would translate into concrete measures expeditiously the basic guidelines for comprehensive economic measures adopted by the three governing parties on 27th March, and that we shall take drastic measures, as necessary, to implement them.
I renewed the sense through my meetings with President Kim Dae Jung of the Republic of Korea and other leaders during the ASEM meeting that they are very much counting on increased domestic demand in Japan. ASEM is an important forum to strengthen relations between Europe and Asia. President Kim's proposal that Europe sends business commissions to Asia - an idea that I supported very strongly - brought home to us the large role that Japan plays in ASEM, which is a country that belongs to Asia but has had very deep relations with Europe. As time is limited, I will not comment on the bilateral meetings that I had with the various leaders on the summit. However, I shall be happy to respond to questions you may have in that regard.
MR. NUMATA [Translation]: We would like to move on to questions and answers. Please state your name and affiliation before asking your question.
MR. UICHIRO KOSHIBA (Jiji Press) [Translation]: I would like to ask the first question, representing the press corps travelling with you. Needless to say, the main attention of the meeting was on the Asian economic and financial crisis. In the statement, there was reference to Asia-Europe co-operation as well. I should like to ask two questions in that regard. First of all, do you think that, as a result of the agreement of the ASEM meetings this time, groundwork has been laid for a resolution of the Asian crisis? My second question relates to Japan's role. At the meeting, you explained that Japan would take necessary economic measures and would implement measures to support Asian economies. In response to expectations shown by Asian countries, how do you intend to act?
THE PRIME MINISTER [Translation]: In the discussions that we had at the ASEM leaders meeting this time, leaders said that the Asian crisis will have a bearing on the world as a whole. Asia and Europe, therefore, together in co-operation should engage in efforts to overcome this crisis. All of us saw eye to eye on this and, in this, I believe that the course towards the resolution of the situation has been shown. I said that we take the situation in Asia as a problem of our own, as we have developed together with these Asian countries and inclusive of the Cabinet decision, the emergency measures taken on the 20th February, we are providing the largest amount - nearly $40 billion - in assisting these countries. Therefore, we are standing at the forefront. Of course, that does not include the amount that we are contributing to the IMF, but including the basic guidelines for comprehensive measures adopted by the three governing parties on 27th March, we explained that we shall be expanding domestic demand. We have adopted, on 31st March, a new three-year deregulation action plan, and we are also going to proceed with the so-called Japanese Big Bang.
So, obviously, I explained that all these major efforts that Japan is making will, of necessity, contribute to the Asian economies. They expressed their welcome and also expressed expectations vis a vis the important role that Japan will continue to play. I might also add that, in terms of financial support, we have already committed $19 billion, including some amounts that have already been disbursed. As for trade insurance, the total amount is approximately $13 billion. Again, some have already been committed, some have been disbursed, others are to be utilised, but we are already acting. In addition, under the EXIM Bank programme, there will be $2.5 billion and also an allowance for structural adjustment support of $580 million. That would come to a total of a little more than $37 billion. There is no other country providing this much assistance and I must say that, apart from this, we are also contributing to IMF efforts. So, while the situation is extremely tough for Japan itself, we are already playing this much of a role. I conveyed this fact to other leaders during the meeting. Some were actually very surprised. So I believe that Japan's efforts are appreciated.
JOHN SIMPSON (BBC): You came here hoping that the Europeans would play a greater part in trying to find a solution to the crisis in Asia. They don't seem to have come up with anything very specific or very concrete. The first part of my question to you is do you agree with that? Secondly, President Clinton yesterday said that he would like, respectfully but firmly, to ask you to use more methods of different kinds to stimulate the Japanese economy. Do you think that, by saying that kind of thing and by referring, for instance, to battles going on behind the scenes between Japanese officials and Japanese businessmen, that this was helpful in finding a solution to the problem?
THE PRIME MINISTER [Translation]: I wonder what sort of answer would be best. I mentioned in my earlier opening that the conference this time was a greater success than I had anticipated. Among Asian countries, as the EU will be enlarged and as the euro becomes reality, many leaders were worried that Europe might become inward looking-that it might close in. We were also very much hoping that Europe would not in this process become protectionistic.
Yesterday, we had a very fruitful and useful exchange of views. The Asian leaders said that fundamentally we support EU enlargement but hope that it will be a process of open integration of the market. We hope that the European markets will remain open and that Europe will remain committed to Asia. We expressed also our hope that Europeans will enlighten us in a clear-cut manner as to how authority is divided between the European Union and the member countries. At times, we can negotiate with the European Union. At other times, we have to negotiate with different parties-the EU and the individual countries. Those are the sort of requests that we put to our European friends.
With regard to the euro, we said that we fundamentally welcome the emergence of this new key currency. We also expressed our hope that the euro will become a stable currency-a currency that is easy for us Asians to use. So we expressed our hope that the euro will be a currency that comes to play a very stable function. As to details of the currency's substances and so on, we express our hope that our European friends will provide us-not just the Government but the private sector in Asia-with detailed information. So with that proviso, we expressed our support for the launching of the euro.
What was very symbolic was that the European leaders very positively and very seriously responded to our questions. They are striving very hard to dispel our worries and doubts. I would not say exactly who said this but a certain leader said, "Please look at where we are." Fifty years ago, would it have been possible to imagine the French and German leaders standing side by side and saying, "We shall get along with each other"? Would it have been possible for people to imagine that we were in fact sitting side by side working together? That was the scene that we saw right in front of us. The discussions in this respect were very useful to us from Asia.
This Europe, as I described it, responded to the idea that was presented by President Kim Dae Jung-an idea on which he previously consulted with me and which I presented to the gathering yesterday, concerning the dispatch of business missions from Europe to Asia. We arrived at an understanding or agreement that the Europeans will be the first to send such business missions in the days ahead, in the interests of the future. That is a result that we had not anticipated. The Korean President will be sending a business mission to Japan. We shall welcome that mission and shall have discussions with Japanese business leaders. We shall also send an investment adjustment co-ordination mission to Korea.
Now we have the Europeans on board as well. This is a great achievement. I believe that we can say the same about the trust fund and the World Bank. We have seen some concrete achievements.
As for your question regarding President Clinton's remarks, I have not seen or heard that news. Having said that, I would like to say that I feel sometimes that messages sent through our mass media friends are not communicated very accurately. Only part of the message might be conveyed, leading to misunderstanding. Having said all that, I would certainly like to hear candidly his views. I have always expressed myself very candidly to him. Through a letter, telephone call or some other means that would not cause misunderstanding, I should like further to engage in communication with him.
MR NAOYA OHSUMI (Yomiuri) [Translation]: A question about Japanese economic measures. You said that very boldly you will implement effective and necessary measures. Do you consider income tax cuts effective? Also, in implementing effective measures, what do you think of the balance between public works investment and tax cuts?
THE PRIME MINISTER [Translation]: As stated in my earlier remarks, within Japan and also among Asian countries, and in the international community more broadly, I am sure that much attention is being paid to the 16 trillion yen package that was announced by the governing parties and to how that will be utilised in terms of economic stimulus measures.
I have always said that I shall remain very flexible in adopting timely measures vis a vis domestic and overseas economic financial situations. In view of the current economic situation, I am thinking very hard while respecting the recommendations from the ruling parties what will be the appropriate measures, including public works investment and tax cuts. We must implement whatever is necessary very boldly in view of the current critical economic situation at home and overseas. But I would simply like to say that we shall implement effective and substantive measures, building on fiscal and monetary measures.
MR. STEVE BALL (Bridge News): Yesterday, Sir Leon Brittan, one of the EU Commissioners, said that he wanted Japan to adopt permanent and substantial income tax cuts. Do you think that you can do that, given the fiscal reform law that you have? Do you have any plans to change that law?
THE PRIME MINISTER [Translation]: I believe that your question has already been answered fully, by my answer to the earlier question-in terms of what I can answer at this stage.
MR. TADANOBU SAKAMOTO (NHK) [Translation]: I have a question with regard to Russia. I understand that you spoke with President Yeltsin on the telephone and that his visit to Japan will be postponed by one week. I understand that President Yeltsin is saying that he needs more time to see the ratification or approval of the new Russian Prime Minister in the Duma or Parliament. He said that his visit on the 18th or 19th April is tentative. I wonder if there is a possibility that his plans will once again change.
THE PRIME MINISTER [Translation]: First, I would like to state clearly that President Yeltsin stated in that telephone call that due to internal affairs in Russia he would like, albeit very regrettably, to change his scheduled visit to Japan on 11th April. He asked whether that would be possible. I said, "The cherry blossoms that I promised to show you may well have gone by then but I would gladly welcome you on the 18th and 19th." At that time, in his response, he did not add any tentative conditions. So I do believe that it was due to internal affairs, internal political circumstances in Russia, that he had inevitably to change his scheduled visit to Japan. But as soon as those circumstances are cleared, President Yeltsin wishes to visit Japan as early as possible. I think that was a very candid expression of his wishes. In order to build a true friendship, Japan and Russia have already started to move ahead. I do not think that this moment will be undermined because of the change in his scheduled visit. What is already moving forward cannot be turned back and should not be turned back
MS JULIA HANCOCK (Reuters Financial TV): You have made clear your keenness to see the fiscal budget and the stimulus package enacted. Looking past that, what would you like to see? Obviously there is pressure for further measures and further action. Can you tell us what you would like to see?
THE PRIME MINISTER [Translation]: When you say ahead or future, how far down the road are you thinking? Tomorrow? Tomorrow is the future and one month down the road is also the future. Around the time that we get to the 22nd century will also be the future. But I suppose that you are not talking that far ahead.
Today in the Japanese Parliament, we are engaged in debate on the Budget for the fiscal year 1998 that started on 1st April. Tax reform Bills have already passed through Parliament, which included a reduction in corporate tax rates and securities transaction tax and also a review of taxes on land-for example, the removal of land price tax. That would come to a total of 840 billion yen in tax cuts. And with regard to income tax, we implemented a 2 trillion yen income tax cut in the last fiscal year. Of that 2 trillion yen, 1 trillion yen will be implemented from now on. So in the fiscal year 1998 Budget, I hope you will understand that these elements have already been included.
In addition, as a member of the Asian community, as I said earlier, while our situation is also tough, we shall actively provide support to other Asian countries. We also understand that it is very important that the Japanese economy recovers because that will have a positive influence on other Asian economies. That is something that we must try to achieve in the interests of the Japanese people. As I mentioned earlier, the three ruling parties have presented their recommendations and basic guidelines for comprehensive economic measures. I should like to take them into consideration and to consider what really needs to be done.
Having said all that, let me make one point. Some tend to believe that Japan has greater influence on the Asian economy than it really deserves. Of course better economic growth in Japan would have a positive effect on Asian economies. But when the Japanese GDP grows by one percentage point it will only contribute 0.1 to 0.2 percentage point growth in the five major Asian countries on average. There would be a lot of disparities among the Asian countries. So Japan alone would not have sufficient ability to support the Asian economies as a whole. I hope that you will all understand that fact.
In the two years 1997 to 1998, approximately 92.5 billion or 93 billion yen is set to be taken away from Asian economies. By contrast, Japan is already providing approximately 40 billion yen support. So I hope that in spite of the tough circumstances in the Japanese economy to which we referred, we are doing much and we shall continue to implement these measures.
Europeans will be sending investment missions to Asia. When that statement was made, some of our Asian colleagues said, excluding Japan. In my bilateral meeting with President Chirac of France, I told him that this is actually the best time to send an investment mission to Japan as well. I hope that the mass media-you and those people who are watching television right now-will publicise that this is the best time to invest in Japan.
MR. NUMATA [Translation]: In view of the Prime Minister's next appointment, we shall have to close the press conference at this time. Thank you very much.
The proceedings were then concluded.
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