Aso stresses Japan's role in fighting global crisis

WASHINGTON (Kyodo) Prime Minister Taro Aso expressed Japan's resolve Saturday to play a key role in addressing the global financial turmoil while asking other leading and emerging economies, including China, to support Tokyo's proposal to boost the capital of the International Monetary Fund.

During a news conference after the two-day summit of the Group of 20 industrialized and developing economies in Washington, Aso said his counterparts hold high expectations for Japan.

"We will lead the building of a framework for a new era," he said.

Aso reiterated that Japan's experience of dealing with the banking crisis in the late 1990s — through massive disposal of bad loans and the injection of public money into distressed financial institutions — provides a good example for addressing the current crisis.

Stressing the importance of helping emerging and small economies to weather the worldwide credit turmoil, Aso underscored the need to boost the IMF's capital.

Japan has proposed that the funding nations of the Washington-based lender double contributions to $640 billion from the current $320 billion.

Aso said Japan is ready to lend up to $100 billion to the fund as a stopgap measure because it will take time to increase the capital base, and he urged other countries, especially those with huge foreign reserves such as China and oil-producing Middle East nations, to cooperate on the additional funding.

He also underlined the necessity of solving global trade imbalances, apparently urging the U.S. to try to erase its chronic deficits and China to stimulate domestic demand instead of depending on exports.

Finance Minister Shoichi Nakagawa separately told reporters that Japan was the only participant announcing contributions to the IMF and the World Bank to give specific figures.

Japan and the World Bank have agreed to jointly set up a $3 billion fund to recapitalize banks in developing economies that have been seriously affected by the financial turbulence.

"Some countries appreciated us for our specific proposal," Nakagawa said. "We believe that Japan has led (discussions at) the G20."