MINISTRY OF FOREIGN AFFAIRS PRESS BRIEFING ON: Summary of meetings held by Prime Minister Keizo Obuchi at the Association of Southeast Asian Nations Summit;

Invitation from Prime Minister Keizo Obuchi to Prime Minister Phan Van Khai of the Socialist Republic of Vietnam to visit Japan; etc.

Press Briefing

17 December 1998

1. Summary of meetings held by Prime Minister Keizo Obuchi at the Association of Southeast Asian Nations Summit
2. Invitation from Prime Minister Keizo Obuchi to Prime Minister Phan Van Khai of the Socialist Republic of Vietnam to visit Japan
3. Reaction of the Government of Japan to the air strikes in the Republic of Iraq
4. Assistance from the Government of Japan to the Socialist Republic of Vietnam
5. Participation in the Japan-US Joint Initiative
6. Ishikawa project in the Socialist Republic of Vietnam
7. Possible visit of Prime Minister Keizo Obuchi to the Republic of Korea
8. Special yen loan program offered by the Government of Japan

I. Summary of meetings held by Prime Minister Keizo Obuchi at the Association of Southeast Asian Nations Summit

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: Good afternoon ladies and gentlemen. Thank you very much for coming, although the Association of Southeast Asian Nations (ASEAN) Meeting is already over. Prime Minister Keizo Obuchi is leaving for Ho Chi Minh City after completing all his work in Hanoi. His official visit to the Socialist Republic of Vietnam started from today. The day before yesterday and yesterday, he participated in the ASEAN+1 and ASEAN+3 Meeting. As Prime Minister Obuchi said yesterday at his press conference, he is very happy after attending these ASEAN meetings, having had various fruitful discussions with other ASEAN leaders and Vice President Hu Jintao of the People's Republic of China and President Kim Dae Jung of the Republic of Korea. He recognized lots of expectation from ASEAN leaders for Japan's economic recovery as an important driving force for these countries in the region to pull themselves out of the economic and financial crisis.

As to Prime Minister Obuchi's bilateral talks with Vietnamese leaders, he met with Prime Minister Phan Van Khai this morning, then followed by other meetings with Secretary General Le Kha Phieu of the Communist Party and President Tran Duc Luong. Let me briefly touch upon the discussions between Prime Minister Khai and Prime Minister Obuchi. They had very substantial talks, mainly on economic affairs. As you know, Prime Minister Obuchi is the President of the Japan-Vietnam Parliamentaians' Friendship League and Chairman of the Japan-Vietnam Cultural Exchange Association. These activities indicate he is very much attached to promoting better relations between Japan and Vietnam. He is very happy to be here on the 25th anniversary of Japan-Vietnam relations. Prime Minister Khai explained the economic situation of Vietnam, in particular the natural calamities last year, and he explained the reform efforts which the Government of Vietnam is making, despite all these difficulties and announced that next year's economic growth rate would be between 5.5% to 5.6%. Of course this figure is much lower than their previous expectation. Also, Prime Minister Khai appreciated Japanese support to the Vietnamese doi moi policies and he expressed his gratitude to the contribution pledged by Japan at the Donor Countries Meeting for Vietnam in Paris.

In reply to the explanation of the Vietnamese Prime Minister, Prime Minister Obuchi expressed his appreciation for Prime Minister Khai's excellent chairmanship at the ASEAN Meeting and also expressed his respect for the reform efforts underway by the Government of Vietnam. As far as Japan is concerned, Prime Minister Obuchi continued that as a concrete sign of Japanese support to doi moi policies, he reiterated Japan's pledge of 102.3 billion yen cooperation, which as a rough figure, just to give you an idea, is approximately US$ 1 billion. Japan will continue to cooperate with the Vietnamese in the areas of capacity building, national construction, development of infrastructure, etc. Japan especially attaches importance to the development of the East-West Corridor project. He reiterated our intention to cooperate with Vietnam.

As to the new Miyazawa Initiative, Prime Minister Obuchi explained that the original idea was mainly for five countries seriously affected by the financial crisis, namely Malaysia, the Republic of Indonesia, the Republic of the Philippines, the Kingdom of Thailand and the Republic of Korea. The total amount planned for these five countries amounts to US$ 30 billion, as you are very much aware, but taking into account the Vietnamese reform efforts and the Vietnamese strong desire to be a beneficiary of this Initiative, Japan is examining Vietnam being included in an extension of the Miyazawa Initiative. The same idea as the Miyazawa Initiative is also applicable to Vietnam. This means that on top of the Miyazawa Initiative amounting to US$ 30 billion for five countries, Japan is open to helping out Vietnam under this Initiative. To materialize that idea, Japan is going to have policy consultations with Vietnam, together with the World Bank, which is expected in January next year. As a possibility of the implementation of the Miyazawa Initiative in Vietnam, Prime Minister Obuchi said that perhaps initially Japan would like to have co-financing with the World Bank. As you know, Vietnam would like to export their products overseas, including to Japan, and Japan is ready to help that desire and to materialize our cooperation, we first of all do need the specific request from the Vietnamese side. There is the so-called Ishikawa project, named for Professor Ishikawa of Japan. This project is designed for human resource development and more intellectual and technical assistance. Prime Minister Obuchi said that he considers this Ishikawa project as the core project among the whole Japanese assistance to Vietnam. All cooperation that has been extended and will be extended by Japan to Vietnam is mainly for assisting Vietnam in transforming their economy from a planned economy to a more market-oriented economy and also to facilitate the integration of the Vietnamese economy into the international community. For that purpose, Japan is very much interested in the modernization of the financial system of Vietnam, strengthening of industrial competitiveness and improvement of the legal system, etc. The main Japanese concept to its assistance to Vietnam is mainly for intellectual assistance to facilitate the smooth transition of their economy.

After the explanation of Prime Minister Obuchi to Prime Minister Khai, Prime Minister Khai said that members of the Japanese Imperial Family, including His Majesty the Emperor of Japan, are invited to come to Vietnam. Prime Minister Obuchi replied that the Government of Japan appreciates the invitation and is going to transmit the Vietnamese invitation to the Imperial Family to consider the possibility. Prime Minister Obuchi, on his part, extended an invitation to Prime Minister Khai to Japan to have a high-level exchange of personnel for the 21st century between Vietnam and Japan. To materialize this invitation, this visit will be discussed through diplomatic channels. These are mainly bilateral economic relations.

As one issue relating to international affairs, Prime Minister Khai referred to the situation of the Kingdom of Cambodia. He said that membership of Cambodia in ASEAN will contribute to peace and stability of Cambodia and it would be a good thing for the region itself. As far as Vietnam is concerned, it will continue to support Cambodia's membership and appreciates Japan's assistance and support to Cambodia. Japan is going to host a donor countries meeting next year. Prime Minister Khai appreciated this initiative to be taken by Japan. Prime Minister Obuchi replied to Prime Minister Khai with respect to Cambodian affairs, that Japan has been extending various cooperative assistance to Cambodia, including support in the implementation of the general election in Cambodia. Japan welcomes the decision made by ASEAN to reconfirm Cambodia's membership in ASEAN. Japan would like to cooperate with Vietnam so that Cambodia's international status would be strengthened, especially as Vietnam is a neighboring country of Cambodia. He reconfirmed that Japan has the intention of hosting a donors meeting for the economic restoration of Cambodia. That meeting will be held in Tokyo in February next year. He also said that Prime Minister Hun Sen of the Kingdom of Cambodia is also invited to this meeting. Prime Minister Khai also said that Vietnam supports the United Nations reform and Japan's membership as a permanent member of the United Nations Security Council. As a final point, Prime Minister Minister Obuchi said regarding the investment climate in Vietnam that due to the Asian financial crisis, many Japanese private companies are becoming more and more selective when they decide where to invest. Chairman Imai of Keidanren visited Cambodia quite recently and as a top businessman requested the same thing. Prime Minister Obuchi had dinner with representatives of Japanese companies in Vietnam on the previous night, and Prime Minister Obuchi received lots of requests from Japanese businessmen regarding the improvement of the legal system and the investment climate in Vietnam. Based on that dinner discussion, Prime Minister Obuchi transmitted these requests from Japanese businessmen to the Prime Minister of Vietnam. These are the main points. Perhaps you are interested in whether these two leaders talked about the Republic of Iraq. The answer is no. Prime Minister Obuchi also met General Secretary Phieu of the Communist Party and President Luong, but I think the main points of the discussions are not so different from what I have already explained. As to the Japan Vietnam Summit Meeting, I would like to stop here, and I would be happy to answer your questions.

II. Invitation from Prime Minister Keizo Obuchi to Prime Minister Phan Van Khai of the Socialist Republic of Vietnam to visit Japan

Mr. Frederic Balfour, Agence France Presse: You mentioned regarding Prime Minister Khai that there would be an exchange of high-level personnel. Does that mean that Prime Minister Khai is invited to Japan?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: Prime Minister Khai is invited to Japan.

III. Reaction of the Government of Japan to the air strikes in the Republic of Iraq

Ms. Joanna Ross, BBC: Could you make a statement on Japan's reaction to the air strikes in Iraq?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: Japan immediately announced its support to the action taken by the United States of America and the United Kingdom because Iraq has not complied with the Resolutions of the United Nations. They did not cooperate with the United Nations Special Commission (UNSCOM) and International Atomic Energy Agency (IAEA) teams. These reasons are good enough for Japan to support the action taken by these two countries.

Mr. P.S. Suryanarayana, The Hindu: Is it unreserved support or total support or is there any condition?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: I do not find any adjective in the Japanese original text of Japan's support.

Mr. P.S. Suryanarayana, The Hindu: No if's or but's?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: No. I do not have any official English translation, but if you allow me to translate the Japanese original text into English in a very literal manner, there is no word, as you mentioned.

IV. Assistance from the Government of Japan to the Socialist Republic of Vietnam

Mr. Frederic Balfour, Agence France Presse: Does extension of the Miyazawa Initiative mean that Vietnam could be included under the umbrella of the US$ 30 billion?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: I think it is better for me to clarify more precisely. The US$ 30 billion is for five countries, maybe. So on top of that, given the Vietnamese strong request and needs for its economic reform, the Government of Japan is ready to extend further assistance in line with the same ideas of the Miyazawa Initiative.

Mr. Frederic Balfour, Agence France Presse: I was told that Vietnam is requesting between US$ 300 million and US$ 400 million. Were any numbers discussed during the meeting?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: I do not know. I attended the meeting but I do not think there was any specific number. We have to know the concrete, specific request.

V. Participation in the Japan-US Joint Initiative

Mr. P.S. Suryanarayana, The Hindu: Japan and the US have launched the Japan-US Joint Initiative at the APEC Summit. Has there been any follow-up? Have any other countries joined the scheme because the request was made to other countries to join and also multilateral institutions to join. Has any progress taken place on that?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: To my knowledge, as of today, I have not heard of any other country but Japan and the US to participate in that Initiative. Vice-President Albert Gore of the United States of America, on behalf of President William Jefferson Clinton of the United States of America, and Prime Minister Obuchi announced the Initiative in Kuala Lumpur almost one month ago. That Initiative is open to other countries too. As of today, to my knowledge, I do not know of other countries that will participate.

Mr. P.S. Suryanarayana, The Hindu: Does the amount stay at US$ 10 billion?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: Yes.

VI. Ishikawa project in the Socialist Republic of Vietnam

Ms. Joanna Ross, BBC: Are there any more details on the Ishikawa project?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: The main theme of the Ishikawa project is to help Vietnam smooth the transition from a planned to market economy, integrate Vietnam into the international community, modernize the financial system, strengthen industrial competitiveness and also develop the rural area. These are areas which are considered as urgent in this project. In relation to that, the request of Japanese businessmen for legal system improvement is also encompassed under this project. I cannot give more details of this project but this is the general philosophy of this project.

VII. Possible visit of Prime Minister Keizo Obuchi to the Republic of Korea

Mr. Frederic Balfour, Agence France Presse: It was reported in the Korean press that Prime Minister Obuchi will visit Korea in spring of next year. Is that the case?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: There is a general invitation from the Republic of Korea to Prime Minister Obuchi but the date and timing should be discussed by both parties. I cannot say. I do not think a specific date has been expressed. But as you know, Seoul and Tokyo are quite close. Often, the senior leaders of countries have their meeting during the weekend, like European leaders who meet sometime during the weekend. Of course this is a more official and formal invitation and therefore Prime Minister Obuchi would try to stay longer than just a short weekend, but still the timing is under discussion.

VIII. Special yen loan program offered by the Government of Japan

Ms. Joanna Ross, BBC: Is there any further information or details of the US$ 5 billion that was announced this week at ASEAN?

Spokesperson for the Ministry of Foreign Affairs Mikie Kiyoi: Once it is announced, we have to wait for the specific request from prospective recipient countries. Let me stress this part. This special yen loan project amounting to 600 billion yen will be implemented during the coming three years. Some report stressed that the contract will only be provided to Japanese companies, but this project strictly complies with Organization for Economic Co-operation and Development (OECD) export credit arrangements. The loan financing is very, very concessional. As far as this project is concerned, it is only a 1% interest rate, with a 40-year repayment period, including a ten-year grace period, which is quite concessional if you are taking into consideration the inflation rate and other factors. Nobody can predict something 40 years later. It is an extremely concessional loan. Therefore, in light of the OECD guidelines, this kind of concessional loan is allowed to be tied.

Japan is expected to revitalize its economy to be a leader of Asian economies which means vigorous Japanese-owned companies would play the leading role to pull up Asian economies out of the crisis. As background information, these projects are designed to help both recipient countries and Japanese companies already invested in these prospective recipient countries in Asia. Unless there is some injection of help which persuades the private Japanese companies to stay in Asian countries, some private Japanese companies may be obliged to leave because of the economic reasons. If there is no work to do for these companies, there is no reason to stay. Once they leave, it is quite difficult, it will take a much longer time for them to come back, which is detrimental for both recipient countries and private Japanese companies as well. So I think it is mainly to keep the activities of the private Japanese companies in the Asian region. I think it is a good project because private companies have been contributing to this so-called Asian miracle, which nobody talks about these days. I think they are the driving force of the Asian economic miracle. Even during the Asian economic crisis, they should stay and they should contribute and work together with the local community. That is the main idea of the project. However, to implement that special yen loan, we do need more concrete requests from prospective recipient countries. Thank you very much for coming.