Japan to seek to take lead in creating new financial order: Aso

http://news.yahoo.com/s/afp/20081116/ts_afp/financeeconomyg20japan_081116054719

by Shingo Ito Shingo Ito – Sun Nov 16, 12:47 am ET AFP – US President George W. Bush (right) and Japanese Prime Minister Taro Aso at the G20 Summit on November … WASHINGTON (AFP) – Prime Minister Taro Aso has made an ambitious bid to take the lead in creating a new global financial mechanism, as Japan announced its fresh commitment to tackling the global economic crisis.

Aso wound up his visit here to attend a summit of the world's top leaders, which ended on Saturday by adopting an action plan to boost flagging global growth and prevent future financial upheaval.

"Throughout this summit, I felt high expectations to Japan," Aso told a news conference.

"The world is now entering a new era," Aso said. "I think Japan should take concrete action. We would like to continue taking the initiative in establishing an economic system that can correspond to the new era."


During the summit, Japan announced a plan to lend up to 100 billion dollars to the International Monetary Fund to help provide financial lifelines to crisis-hit emerging countries.

Japan separately agreed to invest two billion dollars in a new World Bank fund to help recapitalize banks in smaller emerging markets.

Aso also stressed that Tokyo has an "outstanding experience" of overcoming its own financial crisis triggered by massive bad debts in the late 1990s, like the current turmoil which began in the United States.

Analysts say Aso has a window of opportunity to boost Japan's presence on the world stage and match its clout as an economic power during a series of upcoming talks with political leaders.

Tokyo is the second-largest donor after Washington to many global institutions, including the International Monetary Fund, but its attempts to raise its voice in the geopolitical arena have often ended in failure.

Shortly after the Washington meeting, Aso will head to a summit with other Asia-Pacific leaders in Peru, where he is expected to hold talks with US President George W. Bush and Russian President Dmitry Medvedev.

"I would like to proceed with our action to help strengthen financial cooperation in Asia and support self-reliant development of the region," Aso said.

On the sidelines of the Washington summit, the finance ministers of Japan, China and South Korea agreed to consider increasing the size of bilateral currency swap arrangements among the three countries.

Aso may also meet US president-elect Barack Obama on his way back from Lima.

"I had an impression that he is interested in Asia," Aso said, referring to his telephone talks with the incoming president following his election. "It is important for us to have a person with interest in Asia."

Aso's close aides held talks here with former secretary of state Madeleine Albright and a former Republican lawmaker who visited the US capital to pursue contacts with top G20 players on Obama's behalf.

For Aso, the flurry of diplomatic events will be a key test of whether he can boost his support at home as the nation prepares for general elections due by September next year at the latest.

Public support for Aso's cabinet was above 50 percent in opinion polls after he took power from his troubled predecessor Yasuo Fukuda two months ago, but has since declined and is now nearing 40 percent.