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Japan set to pledge $19b in aid to Asean

Publication Date : 14-12-2013

 

Japan is set to pledge some US$19 billion in aid to Asean at a summit today, underscoring its desire to strengthen its presence in a region it sees as crucial to bolstering its economy and position in East Asia.

Japanese Prime Minister Shinzo Abe is expected to announce 2 trillion yen ($19 billion) in loans and grants over five years when he meets Asean leaders at the summit marking 40 years of ties, Japanese public broadcaster NHK and business daily Nikkei reported, without citing sources.

Yesterday, Japan also signed an agreement with the Philippines for a standby loan of 50 billion yen for disaster recovery and aid of 6.6 billion yen.

The move to extend more aid came as Japan agreed yesterday to boost its currency swap deals with three Asean countries.

Finance Minister Taro Aso announced that Japan is doubling its currency swap agreement with the Philippines and Indonesia to $12 billion and $22.76 billion respectively. It is also renewing its $3 billion deal with Singapore, which lapsed two years ago.

Aso said he hopes the deals, which aim to cushion currencies during financial disruptions, will contribute to stability in regional financial markets, enhance bilateral economic and trade ties, and ease jitters when the United States Federal Reserve starts tapering its monetary stimulus.

Explaining why Japan seeks to strengthen its cooperation with Asean in an op-ed for The Japan News yesterday, Abe said it is "indispensable" for his country to tap into a growing Asean's energy and vitality as "the centre of growth for the revitalisation of the Japanese economy" through his "Abenomics" policies.

The summit, which takes place against rising tensions between Japan and China, is also seen as Tokyo's attempt to win support against China's new air defence identification zone (ADIZ).

Yesterday, Abe took pains to explain Japan's position on the ADIZ to leaders from Brunei, Philippines, Indonesia and Singapore, according to its Foreign Ministry.

Today, he is expected to expand the existing Japan-Asean Integration Fund (JAIF), first started in 2006, with a fresh 10 billion yen, reported NHK and Nikkei.

A Japanese Foreign Ministry official said yesterday that Abe will share new ideas for the fund - dubbed JAIF 2.0 - today and pledge his "new commitment" to further cooperation.

The fund will cover projects in maritime security, connectivity and disaster management, said the official, without giving details of the amounts to be pledged.

US$1 = 103.46 yen

 

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