TOKYO: Japanese Prime Minister Shinzo Abe announced on Saturday that his country will relax the conditions in carrying out its yen-loan scheme for emerging countries in Asia, as Japan seeks to boost its economy through infrastructure exports to the fast-growing region.
“The pace of growth in Asia is gaining steam with each passing year. (Implementation of) yen loans should not be left behind by this speed,” Mr Abe said in a speech at a business and investment summit of the Asean, as leaders of Asean and their dialogue partners including Japan gathered in Kuala Lumpur for a series of summits.
Tokyo’s move to review its yen-loan scheme to make it more acceptable to potential partner countries is seen as a countermeasure to Beijing, which has tapped into the huge infrastructure development needs of Asia, especially after Japan lost a key Indonesian high-speed railway contract to China.
The Chinese-led Asian Infrastructure Investment Bank — which Japan has not joined — is seen as rivalling other existing financial institutions such as the Asian Development Bank, the heads of which traditionally hail from Japan.
Mr Abe said in the speech it will not be necessary to ensure state guarantees from the partner countries if the yen loans are granted to public organisations, with sufficient involvement of the governments of these countries. The process of lending will also be shortened by as much as one year and a half, he said.
To make it easier to provide development funds for emerging countries, the Japanese government will compress the period for processing the implementation of yen loans, which usually takes about three years, one of the Japanese officials said.
Indonesia initially dropped both Japanese and Chinese proposals due to high costs but later decided on China after Beijing made a new proposal to build the high-speed rail link between Jakarta and the West Java provincial capital of Bandung without Indonesian fiscal spending or debt guarantees.
“Let us together expand high-quality infrastructure in Asia,” said Mr Abe, who also cited an investment initiative he announced in May to provide $110 billion to promote “quality infrastructure” in Asia over the next five years.
In line with this goal, the Japan International Cooperation Agency and ADB will together provide $10 billion to Asia in the next five years for Asia’s infrastructure development.
Mr Abe also announced Japan’s plan to assist in training as much as 40,000 people in Asia, including Asean countries and India, over the next three years, as well as set up a fund known as the Japan Asean Women Empowerment Fund to encourage women’s entrepreneurship in Asia.
