West is cool to Japan's aid initiatives Tokyo can do more, say G-7 partners

April 15, 1993|By John E. Woodruff | John E. Woodruff,Tokyo Bureau The Los Angeles Times contributed to this article.

TOKYO -- Japan's long-awaited turn in the host's limelight of G-7 meetings turned sour yesterday as other industrialized countries reacted coolly to both its $1.8 billion Russian aid pledge and its $116.8 billion economic stimulus package.

Prime Minister Kiichi Miyazawa and other senior Japanese officials have long counted on chairmanship of the next summit of the world's seven wealthiest industrial nations to boost Tokyo's drive for a leadership role in world affairs, including eventual permanent membership on the United Nations Security Council. The summit is scheduled for July.

But Mr. Miyazawa had scarcely delivered his opening speech at a two-day emergency Russian-aid meeting before officials of some of the other six nations dismissed both the host country's key initiatives as too little, too late and too grudging to count as acts of leadership.

At an afternoon news conference, neither Secretary of State Warren M. Christopher nor Treasury Secretary Lloyd Bentsen would go beyond calling the economic package "a step forward" toward controlling Japan's record-breaking $100-billion-a-year worldwide trade surpluses.

Mr. Bentsen said he was not yet sure how much of the money really would qualify as economic stimulus. He warned that Japan will have to boost its economy more and for a very long time if its trade surpluses are not to stifle world economic growth.

"I don't want to see us revert back in our country to protectionism to restore . . . balance, or to have to go into recession to restore . . . balance," he added.

As described by German Finance Minister Theo Waigel, who said he was offering only approximate figures, the plan being worked out for Russia would include:

* $3 billion in credits that the International Monetary Fund would make available to Russia almost immediately, primarily to cover the cost of importing necessary goods and equipment from the West and Japan.

* $4 billion in additional IMF credits that would be made available to Russia in a piecemeal fashion as Moscow institutes real

economic reform. This step-by-step program represents a relaxation of the fund's usual insistence that full reform be established before any money is transferred.

* $6 billion in a fund to help stabilize the ruble.

* $1 billion from the World Bank for economic development projects.

* Up to $10 billion in bilateral aid from individual countries, most of it in the form of export credits -- loans to finance Russian purchases of goods from the countries that extend the aid.

* $15 billion in already announced debt rescheduling, to help Moscow get out from under the crushing burden of paying back the $80 billion foreign debt it inherited from the now-defunct Soviet Union.

That adds up to $39 billion, but Mr. Waigel and other top officials said it would be deceptive to rely on that total because it mixes different types of aid -- grants, loans and debt relief -- that do not have comparable dollar values.

Delegations gave a mixed reaction to President Clinton's 11th-hour proposal for a $4 billion fund to finance privatization of Russian oil and gas facilities.

"Very bold, but very complex," one European delegate said. "Meanwhile, we have an already planned $500 million fund for small and medium-sized private enterprises -- why don't we concentrate on that this time around?"

Mr. Clinton offered to put up $500 million for his plan if the other six nations would put up $1.5 billion and the World Bank and European Bank for Reconstruction and Development would put up a total of $2 billion between them.

European and U.S. officials were politely positive but distinctly unenthusiastic in their public comments on the host country's proposed $1.8 billion contribution to the Russian emergency package.

The tone was set at a news conference in which Klaus Kinkel, the foreign minister of Germany, which has poured nearly $40 billion into helping Russia's troubled reforms, limited himself to calling the Japanese package "a favorable development."

By the time Japanese delegation members briefed reporters last night, they came into the room already on the defensive.

"When you compare ours with some of the other proposals, it is not so miserable as has been suggested," a Japanese official said. The briefing was given on condition that speakers not be named.

Away from the podium and on condition of not being named, European and U.S. officials dropped the polite praise of their hosts.

"They can do more, and they will be asked to do more," one European delegation member said of the Japanese package.

In side sessions at the G-7 meeting, ministers agreed it's time for sanctions that will add up to "the final isolation of Serbia," in a new attempt to halt the outrages in Bosnia, British Foreign Secretary Douglas Hurd said.

He said sanctions can be in place "by the end of the month" based on plans that have been on the drawing boards for 2 1/2 months, pending the outcome of the now-failed peace missions headed by former Secretary of State Cyrus R. Vance.

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