Clinton calls on Asians to act A strengthened Japan is crucial to stability, he tells Hashimoto

Pacific Rim gathering

Rights issues raised with presidents of China, Indonesia

November 25, 1997|By NEW YORK TIMES NEWS SERVICE

VANCOUVER, British Columbia -- A day after describing the spreading economic turmoil in Asia as a mere glitch, President Clinton met yesterday with leaders of the region's largest countries to deliver a tougher message, telling them that while the United States and international organizations could help, they would have to take painful steps on their own to recover.

Clinton held meetings with the leaders of Indonesia, China, Japan and South Korea, four nations that represent the full range of economic, geopolitical and human-rights issues driving U.S. policy in Asia.

Clinton emphasized to his counterparts that the solution to the region's economic problems had to start with more prudent policies at home, White House officials said. He spoke against a backdrop of escalating trouble in Japan's financial system, continuing jitters in stock and currency markets worldwide and the likelihood that Asia's woes will slow global economic growth.

In particular, Clinton told Prime Minister Ryutaro Hashimoto that Japan needs to deregulate its economy, strengthen its ailing banking system and pursue an economic recovery built on domestic demand and not cheaper exports. Clinton emphasized that strengthening Japan economically is crucial to restoring stability across Asia.

"We just want to be in a position to be supportive when we can," Clinton said. "But I think Japan can lead Asia out of this difficulty with the strength of its economy."

He said all the leaders should work with the United States in pressing developing countries to take part in plans to limit emissions of pollutants and reduce the dangers to the environment from global warming.

To President Jiang Zemin of China and to President Suharto of Indonesia, Clinton again raised long-standing U.S. concerns .

about human rights. He welcomed the release last week by Beijing of Wei Jingsheng, China's most prominent dissident, and pressed for further releases. And he raised with Suharto the U.S. unhappiness about the treatment of ethnic minorities in East Timor and about the repressive nature of the Indonesian government.

Clinton spoke about "the need for countries like Indonesia to deal with how to accommodate order and liberty and to create the correct balance as they develop," said Samuel R. Berger, his national security adviser. "In the new information world, provisions need to be made for people who move to the beat of a different drummer."

Asked how Suharto responded, Berger said he "did not respond to that directly."

The sessions dominated the first of two days of meetings among the leaders of the 18 members of the Asia Pacific Economic Cooperation forum.

While Clinton and his counterparts from other nations continued to stress the region's resilience and underlying strengths, their conversations were tinged by deep concern that the financial turmoil had not yet been brought under control and could still permanently tarnish its standing as a driving force in the global economy.

Administration officials dismissed concerns that Japan could follow South Korea as the next country to need an international financial bailout. But they said the situation warranted acute international attention to prevent a further spread of instability. They said finance ministers from many of the affected nations would meet in Kuala Lumpur, Malaysia, next week and again in Japan in January.

The administration officials said all the Asian leaders with whom Clinton met endorsed the American-backed strategy for dealing with the crisis.

The strategy calls for the International Monetary Fund to take the lead role in dealing with any countries that need international financial assistance. It also allows countries in a region to put together backup pools of financial help if IMF assistance proves insufficient. And it calls on nations to enact more prudent economic policies in return for receiving international assistance.

Hanging heavy over yesterday's proceedings was the failure of Japan's fourth largest securities firm, Yamaichi Securities Co. It was the second failure of a major financial institution in Japan in recent weeks, and it heightened concerns that Asia's spreading woes could lead to further failures among Japan's beleaguered banks and set back Japan's already faltering efforts to spur its economy.

U.S. officials said Hashimoto did not provide Clinton with any details of his plans to deal with the banking crisis, beyond emphasizing protection of depositors rather than financial institutions.

But Deputy Treasury Secretary Lawrence Summers said the United States was satisfied with the Japanese government's statement that it would take the "necessary steps to contain the effects" of the Yamaichi collapse.

Pub Date: 11/25/97

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