By IPS Correspondents
BANGKOK, Jul 17 2000 (IPS)

Asian countries are hoping their voices will be heard at this week’s Group of 8 summit in Japan, their aspirations boosted by Tokyo’s speaking up to air views different from western powers.

For its part, Japan hopes to raise its political profile in the international arena and go beyond just being the world’s biggest aid donor. Tokyo is an economic giant but politically, much less.

Thus, Japan has been taking pains to say that the summit’s agenda will include the bipolarisation of the world into rich and poor and the issues this raises, like debt relief.

A financial architecture that also works for developing nations is a priority — the G-8 summit is being held just after the third anniversary of the start of the Asian financial shock.

Indeed, it was after the 1997 crisis that Japan began to speak up on global problems. Among others, it proposed an Asian monetary fund and said countries should rely less on the dollar and use the yen in international trade.

At one point, the name of Japan’s former vice finance minister for international affairs Eisuke Sakakibara was floated as a contender for the post of IMF chief though his chances of being chosen were nil. Tokyo’s point was that Japan must be seen as a global player.

To drive home the point that Japan is for dialogue between the G-8 and the developing world, pre-summit talks between the two groups have been organised for the first time.

The talks will be between the Group of 8 — Britain, the United States, Germany, France, Italy, Japan, Canada, and Russia — and developing-country groups like the Non-Aligned Movement (NAM), the Group of 77, Organisation of African Unity (OAU) and the United Nations Conference on Trade and Development (UNCTAD).

The leaders of these groups — South Africa for NAM, Nigeria for the Group of 77, Algeria for the OAU and Thailand for UNCTAD — will meet G-8 leaders on Jul 20, before the main summit on Jul 21- 23 in Okinawa in southern Japan.

“Japan will be the only Asian nation present at the summit. It will also be the host nation, so it is natural that the government will emphasise the Asian perspective. Other Asian countries are expecting this as well,” foreign affairs analyst Yukio Okamoto was quoted as saying in Tokyo.

But not everyone is ready to accept Japan as Asia’s spokesperson.

Tokyo invited China to be an observer in the G-8 summit, but Beijing declined, saying it did not want to be part of a club that thinks it can make political decisions for the world.

A Chinese official was quoted as saying Tokyo’s economic interests are deeply tied with the US and Europe — and no one had chosen Japan as the “representative of Asia”.

Still, Japan is being urged to push harder on reforms in the financial system to counter the ill effects of globalisation — the risk posed by markets that are opened too hastily and capital movements across borders that are partly blamed for the Asian crisis.

Japanese Finance Minister Kiichi Miyazawa, speaking at the meeting of G-7 finance ministers in early July, said: “Looming in the background of these currency and economic crises is the problem of instability brought about by large and volatile movements of international capital.”

The Asian crisis spread after affected economies saw flight of capital equivalent to 11 percent of their GDP. Asian nations are thus keenly seeking a mechanism which some call “a cooperative financial system for Asia”, to prevent a repeat.

Japan’s 1997 proposal for an Asian monetary fund was shot down by the Americans, but it is not dead. It has gone through several versions, the latest being a currency swap arrangement among East Asian nations arranged at the Asian Development Bank (AsDB) annual meeting in May in Chiang Mai, northern Thailand.

Included in the scheme are the ‘ASEAN Plus 3’ group, which means East Asia — the 10 Association of South-east Asian Nations (ASEAN) members plus Japan, China and South Korea. In the first week of July, Japan and Thailand agreed on a currency swap deal.

Miyazawa said it was not a currency union, “but when there is a contigency, we have seen a natural rise (of sentiment) in the sense that should help each other out”.

In whatever name or form, the idea of an Asian way of helping each other quickly remains attractive to many countries.

This is because many in East Asia view it as a way of getting help different from that of the IMF (International Monetary Fund) which imposed terms that early in the crisis worsened the situation for countries like South Korea and Thailand.

Countries like Thailand, where the currency meltdown began on Jul 2, 1997, still remember how the United States, a major player in the Fund, was slow to come to their aid at the time.

When Indonesia was hit by trouble in October 1997, the US came in “reluctantly”, as Singapore’s senior minister Lee Kwan Yew put it. He said Japan and Singapore let out five billion U.S dollars and the U.S. gave less, giving the wrong signal to the market.

The IMF and the United States feared an Asian monetary fund would rival the IMF, and might encourage ill-advised policies that they argued, led to the crisis in the first place. They also wondered how the Japan-led fund would ensure wise use of money, doubting that Asian countries could police their own ranks.

At a forum in Tokyo last month, Singapore’s Lee said that any Asian fund needs IMF support to be sustainable. This is due to the dominance of the US and Western powers in the IMF, he added.

Lee agreed that an Asian group faces the hard task of giving “bitter medicine” to its members. “I’m not against the idea of an Asian Monetary Fund. But if you’re going to have one, we have to be very careful deciding on what terms it will be extended and who is administering the conditionalities,” he said.

Despite the high hopes on Japan, however, it remains to be seen how assertive Tokyo will actually be as G-8 host.

“Japan should speak out and make its views known to other G-8 countries, not simply listen to what other members say,” former Japanese Prime Minister Yasuhiro Nakasone told the Japanese newspaper ‘Yomiuri Shimbun’.

Likewise, sceptics say that while the G-7 finance ministers (without Russia) issued a document called ‘Strengthening the International Financial Architecture’, they have not proposed major steps so far.

One critic said nothing “really substantial or new” emerged, and an Asian fund was not discussed by the finance ministers.

Japan has also been pushing for a reassessment of the IMF’s quota distribution and voting rights to show Asia’s growing economic clout. An outcome of its campaign will be awaited this week as well.

Other observers found the summit’s attention to the North-South ‘digital divide’ a new one, but also a “safe” issue, when others, including concern about China-Taiwan tensions, may well be missed.

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