Press Conference by Prime Minister Hashimoto
at the Japan-ASEAN Summit Meeting in Malaysia

(This is a provisional and unofficial transcript. It in no way constitutes an official record.)

1. Statement by the Prime Minister
2. Economic situation in Asia
3. Promoting economic stability in Asia
4. Japanese domestic economic policy
5. Peace and stability in the Asia-Pacific region

Ⅰ. Statement by the Prime Minister

Prime Minister Ryutaro Hashimoto: We have just concluded the Japan- ASEAN Summit Leaders' Meeting. Attention is focused on the current economic situation in ASEAN and I think it was very useful that we have been able to engage in a very candid exchange of views. Some ASEAN countries are experiencing very extreme economic and currency turbulence. However, I believe that economies of East Asian countries basically remain strong and that growth potential still remains high. So, if the countries maintain open and sound macroeconomic management and structural adjustment, as well as intra-regional cooperation, which characterizes ASEAN, I am sure that the ASEAN countries will revert to stable and robust growth sooner or later. We are prepared to provide our best effort. Also, I explained to the ASEAN leaders Japan's efforts to stabilize its financial system. Under the current circumstances in the region, I believe that it is most important that Japan steady itself. This is not just my own view, but a view that I believe was expressed by all the other leaders. As incorporated in the joint statement, we have confirmed to cooperate further in a whole gamut of areas from political and security to cultural. Perhaps this is somewhat different from your anticipation, but very strong attention was paid by the leaders to the proposal we offered on a Japan-ASEAN human resources development program. That is a sort of program for nurturing human resources, which requires a very long perspective. I feel most gratified that I was able to receive very active support for this sort of idea. So, I believe that we have been able to lay the foundation for new Japan-ASEAN relations for the 21st century. Last, but not least, I pay my wholehearted respect to Prime Minister Mahathir bin Mohamad for his outstanding Chairmanship and also wish to express my gratitude to the people and Government of Malaysia for their gracious hospitality. I am grateful that I have been able to enjoy a very substantive and fulfilling stay, although the time was short. Thank you.

Ⅱ. Economic situation in Asia

Q: Regarding the currency crisis that the ASEAN countries face today, I think that that was the greatest theme of the meetings this time. To tackle the problem, Prime Minister Hashimoto announced financial system stabilization measures of the Liberal Democratic Party (LDP), assistance for small- and medium-sized enterprises as well as human resource development programs. With these efforts, do you think that the currency and financial crisis of Asia will move toward stabilization? And secondly, do you think that Asia will recover its trustworthiness?

Prime Minister Ryutaro Hashimoto: As far as the Japanese financial system is concerned, we will employ very drastic measures, including the issuance of 10 trillion yen in Government bonds -- the proceeds of which will be used to replenish the Deposit Insurance Corporation. We shall never, at any cost, allow Japan to be the source of worldwide depression. The ideas for supporting human resource development and small- and medium-sized enterprises, which I conveyed to the leaders during the meeting today, is built on the idea of making use of the excellent fundamentals of East Asia, in order to further sophisticate the economic and social structure of Asia over the longer term. I believe that this will lead to a recovery of confidence in Asian economies. As the problem is that the weakest point of the ASEAN industrial structure is that parts industries are not able to enjoy economies of scale, I announced a major support package in this area. I am sure that we will be able to help recover confidence in the Asian economies.

Ⅲ. Promoting economic stability in Asia

Q: Do you have any proposals or ideas about how Japan can help the Asian countries which are effected by the turmoil in the financial markets to recover more rapidly?

Prime Minister Ryutaro Hashimoto: First of all, I think it is important that support be provided under the framework of international support built on the core of the IMF, and also that the Manila framework be steadily implemented. Further, we are prepared to provide utmost support through such international frameworks. Why do I stress the International Monetary Fund (IMF)? This is something that I really have to have you understand. The IMF, by having itself engaged in the various situations in individual countries, will have to induce capital -- European, American and otherwise -- back to this region. Therefore, to that end, the framework under the IMF is extremely important.

In order to allow this region to enjoy dynamic and sustained economic growth in the 21st century by taking advantage of the favorable economic fundamentals in East Asia, I believe that it is necessary to further upgrade the economic and social structure in this region over the longer term. To that end, human resource and development is of great importance. In my meeting with the ASEAN leaders this morning, I expressed Japan's policy to provide human resource development assistance by accepting 20,000 people over a five-year period, and that we would like to assist the ASEAN countries in developing economic infrastructure, small- and medium-sized enterprises and supporting industries. Naturally, we will support the strengthening of ASEAN intra-regional cooperation, as well.

Ⅳ. Japanese domestic economic policy

Q: When you return to Japan, budget preparation work will start immediately. However, under the present circumstance where economic recovery and expansion of domestic demand is still slow, I believe you would be called forward to open the road to this policy. What kind of policy are you contemplating?

Prime Minister Ryutaro Hashimoto: In connection to budget drafting, there will be the question of tax system reform next year. There are numerous areas we have to work on from now on, so I cannot really go into details. As I said, we will never allow Japan to be the origination of a world depression. In my meeting this morning with the ASEAN leaders, Prime Minister Mahathir and several other leaders of the ASEAN countries expressed their hope that the Japanese economy will become more robust, so that Japan will lead ASEAN countries. Recently, we announced economic measures, which will include drastic economic and structural reforms, stimulation of land transactions and efficient utilization to resolve bad debt problems, provision of an attractive business environment and also nurturing of small- and medium-sized enterprises. Built on these measures, in the tax system reform next year, we should like to remove these uncertainties over the future outlook for business, so that confidence in the future can be strengthened and so that the Japanese economy will move on to self- sustained economic recovery built on domestic demand. In the area of banking management, we should see to it that the effects of Japan's financial troubles on domestic and overseas financial markets be minimized. So, we shall have to do our utmost to stabilize the Japanese financial system. I only doubled my determination to work on these fronts as a result of the meeting that we had today.

Ⅴ. Peace and stability in the Asia-Pacific region

Q: In regard to Japan's security dialogue with ASEAN countries, I would like to ask you what measures or concrete steps Japan is proposing to enhance peace and stability in the Asian region?

Prime Minister Ryutaro Hashimoto: Today we had a very candid exchange of views on matters related to security. I said that it is necessary to secure U.S. presence in the Asia-Pacific region, and that securing the presence of the U.S. forces, which is based on the U.S.- Japan Security Treaty, is a must. In that respect, we are contributing to the security situation in the Asia-Pacific region. And, we shall continue to maintain that contribution. This is the 25th year since the normalization of our relations with the People's Republic of China. This year as well as next year, we shall seek rapid progress in security dialogue between Japan and China. By having experts, and others as well, participating in such dialogue, we shall minimize any misunderstandings that may exist between Japan and China. These efforts are already on track.

Building on these, we shall have to see how effective the ASEAN Regional Forum (ARF) process is. The ASEAN leaders told me that they are happy, and highly commend Japan's appreciation of the dialogue in the ARF process. The Joint Statement of the Japan-ASEAN Leaders' Meeting will, I believe, be somewhat revised before it is officially announced. But, it does not imply that the document prepared by the officials was wrong, but that we have indeed correctly addressed the question of human resource development. As a result of the wish of the leaders, we have decided to further augment the paragraph related to the human resource development proposal in addition to the security portion. It is 20 years since we shared such documents last time and, 20 years ago, I am given to understand that our relations with ASEAN mainly were in the economic sphere. Over these 20 years, our exchanges have further deepened and broadened. Of course, everyone else will follow this trend in expansion and deepening of our relations. So, our relations between Japan and ASEAN are far different from what they were 20 years ago.

Asia, culturally and otherwise, is very diverse. All these countries enjoy a long tradition and history. And, we have to respectfully think how to hand down such tradition to our posterity. In this respect, our challenge has already started. Together we will address this question, as well. Again, our relations will indeed be very broad and not simply limited to political, security and economic relations. I would like to emphasize that we had very good discussions, not only on security issues, but also in other areas. Thank you very much.