# Section 1 Enhancing Assistance for the Growth of Asia

The continuation of Asia’s stable and robust growth is critical to the future growth of Japan. It is also essential to the realization of the East Asian Community proposed by Prime Minister Hatoyama. To this end, it is imperative that Japan make contribution in finance, human resources, technical assistance, and knowledge fronts to improve the intraregional flow of people, goods, and capital, and mitigate and eliminate bottlenecks to growth.

Japan has eagerly taken steps to assist Asia in addressing the impact of the financial and economic crisis. At the Annual Meeting of the World Economic Forum in Davos in January 2009, then Prime Minister Taro Aso expressed that it was important for Asia, which holds the greatest growth potential in the world, to contribute to the world economy as a center of growth open to the world. In this context, with a view to enabling Asian countries to take a coordinated and prompt response to the impact of the crisis, as well as to promote strengthening of Asia’s growth potential and expansion of domestic demand, then Prime Minister Aso announced its readiness to provide ODA no less than 1.5 trillion yen in total (equivalent to US$17 billion).

However, the financial crisis continued and the world economy further declined. In order to play an active role in assisting Asia, Japan announced at the G20 London Summit in April 2009 that it would expand its commitment to Asia that was announced at the World Economic Forum, and declared that it was ready to extend ODA of up to 2 trillion yen (equivalent to US$20 billion). With regard to other public funding, Japan announced that it would facilitate trade financing by providing a total of US$22 billion of additional assistance for the next two years through the Nippon Export and Investment Insurance (NEXI) and the Japan Bank for International Cooperation (JBIC), other than the US$90 billion on average of annual support to trade finance. Japan also announced that it would support investments in developing countries to environmental areas, mainly in Asia, which was to be US$5 billion for the next two years through JBIC.

In April 2009, Japan announced “the Growth Initiative towards Doubling the Size of Asia’s Economy,” which gives a more concrete idea of the commitment announced at the G20 London Summit. Specifically, as a part of ODA of up to 2 trillion yen (equivalent to US$20 billion) Japan mentioned Emergency Budget Support ODA Loans totaling up to 300 billion yen to be extended flexibly in order to help boost domestic demand in Asian countries. Japan also mentioned to the support to the development of safety nets in the sectors and people vulnerable to crisis, as well as to the support to infrastructure development, development of a low-carbon emission society, and the promotion of human resources development and people-to-people exchanges.

Based on the above commitment, in June 2009, Japan extended to the Philippines an ODA loan of around 45 billion yen to support the country’s agriculture and logistics infrastructure, and an ODA loan of around 2.9 billion yen to Mongolia to support the country’s social sector.

In November 2009, the first Summit Meeting was held between Japan and five Mekong region countries. Prime Minister Hatoyama addressed that the Mekong region was a significant region that held the key in the open and transparent East Asian Community initiative in terms of redressing intraregional gaps. At the Summit Meeting, the leaders shared the view that the countries will establish a partnership for a future of common prosperity based on the three pillars of: comprehensive development of the Mekong region; the environment and climate change (addressing “A Decade toward the Green Mekong” initiative) and issues of overcoming vulnerability, and expansion of cooperation and exchange. In order to further advance these endeavours, Japan regards the Mekong region as a priority area and continues the policy to expand ODA to the Mekong region as a whole as well as to Cambodia, Laos, and Viet Nam (the CLV countries) respectively. Japan committed to extend ODA of more than 500 billion yen in the next three

Mekong-Japan Summit Meeting (Photo: Jiji Press)