DAVOS, Switzerland (Reuters) - Japan is ready to offer more than $17 billion of aid over three years to Asian countries to fight the global financial crisis, Prime Minister Taro Aso said on Saturday.
Addressing delegates at the annual meeting of the World Economic Forum, Aso reiterated Japan’s offer to lend up to $100 billion to the International Monetary Fund from its foreign currency reserves and said Tokyo would welcome similar steps from other countries.
“It is imperative to ensure dollar liquidity for small, medium and emerging countries ... We welcome oil exporters and countries that have a lot of foreign exchange reserves would join such efforts,” Aso said.
“We will support Asian countries by mobilizing funds ... I‘m convinced that deepening cooperation within the Asian region would lead to a recovery in the global economy.”
Deputy Cabinet Secretary Osamu Sakashita said $17 billion was the minimum amount of development aid the government would provide to Asian countries. The amount could be extended and the period could well be shorter than three years, Sakashita said.
Aso also promised that Japan, the world’s fifth-largest greenhouse gas emitter, would unveil by June a medium-term target to reduce emissions.
“We have to be concrete. We must present concrete figures which will show how much it’s going to cost people or how to reduce the financial cost,” Aso later told reporters.
“Otherwise it’s not convincing. Also, we can’t have plans which are not agreed by the United States, China or India.”
Japan has said it aims to cut emissions by 60-80 percent below 2005 levels by 2050, but experts tasked by the government to debate Japan’s reductions have been at odds over how ambitious mid-term goals should be.
Industries have resisted binding targets they fear will hurt their competitiveness.
Japan has a target to cut emissions by 6 percent below 1990 levels between 2008 and 2012 under the United Nation’s Kyoto Protocol, but needs to cut emissions by an estimated 13.5 percent to reach its Kyoto goal.
Aso’s hasty half-day visit to this Swiss ski resort was squeezed into a tight schedule in parliament, where the unpopular leader faces attacks from an emboldened opposition scenting possible victory in an election due this year.
Aso, who took office last September after his predecessor abruptly quit, has seen his support sag below 20 percent and with key bills facing delays in the opposition-controlled upper house, he is having a tough time implementing policies.
The Japanese premier also urged the United States to reduce its excessive consumption and said other countries should wean themselves from dependence on external demand to fix the global imbalances behind the current crisis.
“To get the world economy on a stable growth path again, it is necessary to correct excessive consumption in the United States, as well as global imbalance coming from insufficient domestic demand of various countries, especially those with trade surpluses,” he said.
“In the last year and a half, the yen has gained the most value among major currencies. It is necessary for each country, in line with its situation, to expand domestic demand and achieve independent growth.”
Aso’s comments come after China and Russia blamed debt-fueled consumption for the financial crisis.
Aso also vowed that Japan would combat protectionism and called for a swift conclusion to stalled world trade talks.
“Japanese exporters are also facing very harsh conditions. But Japan will firmly fight against protectionism, keeping in mind the lessons from the 1929 Great Depression,” he said.
The deepening crisis, and the failure so far to complete the World Trade Organization’s long-running Doha round to free up global commerce, have raised fears that countries would block imports to protect jobs.
Writing by Yoko Kubota and Natsuko Waki, editing by Mike Peacock