Japan given US pledge of support for reform plan

President Clinton told the Japanese Prime Minister, Mr Keizo Obuchi, yesterday that there was "virtually unanimous support in…

President Clinton told the Japanese Prime Minister, Mr Keizo Obuchi, yesterday that there was "virtually unanimous support in the world" for financial reforms to restore economic growth in Japan, and in Asia as a whole.

The two men met privately for about an hour at New York's Waldorf Astoria Hotel after bad weather forced them to cancel a trip to the Rockefeller family estate north of the city.

Asked if he thought he would succeed in persuading the Japanese parliament to pass economic reforms, Mr Obuchi replied: "I am neither optimistic nor pessimistic on this."

Mr Clinton said the United States wanted to help Tokyo find a way out of its problems, but he avoided any public comments that might press Japan to accept specific policies.

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"I think there is virtually unanimous support in the world for the kind of financial reforms that would restore economic growth in Japan," Mr Clinton said. He had invited the Japanese prime minister to come back for a formal state visit some time next year and Mr Obuchi had accepted.

The visit would make up for one cancelled by Mr Obuchi's predecessor, Mr Ryutaro Hashimoto, whose government collapsed in July.

The United States is looking for speedy bank reform, tax cuts and public spending from Japan to stimulate its economy and help end Asia's lingering financial crisis.

Mr Clinton said the United States wanted to be encouraging and that he realised the Japanese government would have to work out what is "politically possible.

"We want to do what we can to be supportive, to help do whatever we can to create the climate which would permit a quick restoration of economic growth in Japan and therefore in Asia."

Mr Obuchi said the steps Japan ultimately takes will have "very large implications worldwide. I intend to make my very best effort at addressing this issue. I am convinced that we will be able to do something."

US officials said the American team wanted to hear the Japanese plan for fixing its ailing banking system, which was agreed last Friday between opposition and ruling party leaders. The plan failed to work out how the government would deal with bank debts of nearly a trillion dollars and was coming apart in Tokyo.

"We want to see the details," said one US official. "It's still too early to tell" whether the plan will be sufficient, he added.

Some Japanese have complained that they are being made scapegoats for the Asian financial crisis, but the US side said no one was assigning blame.

"This is not a time to blame and certainly the United States has never pointed a finger at anybody. It's time to take strong decisive action and that is what we're looking for the Japanese to do. The time to act has come," said one US official.

The American side hopes to use the summit to underscore that Japan remains the cornerstone of US security policy in the Asia-Pacific region. Mr Clinton's trip to China in late June and early July raised some concerns in Japan.