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Source: www.asiaecon.org |

JAPAN PLEDGES $17 BILLION IN ODA


On Saturday, Japan pledged $17 billion in economic aid to Asian countries. This aid package focuses heavily on infrastructure projects and is intended to assist those countries that were suffering the most, due to the global economic crisis.


On Saturday, Japan pledged $17 billion in economic aid to Asian countries. This aid package focuses heavily on infrastructure projects and is intended to assist those countries that were suffering the most, due to the global economic crisis.

Taro Aso, the Japanese prime minister, addressed the issue to the World Economic Forum in Davos, Switzerland, where he stated: “Japan is ready to provide overseas development assistance (ODA) not less than 1.5 trillion yen or about 17 billion dollars in total”. Aso also stated that larger countries should stop pointing fingers at each other for the current crises and end that whole “blame game”, referring to Russia and China’s stance towards the United states.

Moreover, he pointed out that the main reason for the current crisis, is the imbalance in the global economy, where countries like the United States consumes more than they should and similarly countries like Japan rely on exports and overseas income more than they should. “In order to put the world economy back onto a stable growth trajectory, one imperative is correcting the global imbalance that has arisen from overconsumption in the United States and insufficient internal demand in other countries.”

Meanwhile, the World Economic Forum warned governments that lowering imports to save jobs is not the right policy to pursue, indicating that it would only worsen the situation, referring to the great depression in the thirties. According to a draft declaration, a copy of which was obtained by Reuters, the ministers were likely to call for a breakthrough this year in the World Trade Organization’s long-running Doha round to free up global commerce.

Amid these developments, the European Union imposed high tariff fees on specific Chinese products; screws and bolts. The Chinese are expected to retaliate in a similar fashion. Also, the US, Germany, and China announced decreased level of exports in the past few weeks, and international air cargo volumes dropped by nearly one fifth in December.

“The world trading situation is now a part of the general economic problem,” New Zealand’s Trade Minister, Tim Groser, told Reuters.

“The only thing that’s shining is the sun,” Indian Trade Minister Kamal Nath told Reuters during a break in the meeting.

However, without considerable effort and pressure from world economic leaders, the Doha round could disappear in thin air. Indeed, 20 countries from the developed and developing world agreed on pushing the Doha round to completion while preventing further trade obstacles in a summit that was held in Washington, DC in November. 

In reaction to that summit, India and China increased tariffs on imported auto vehicles and the European Union continued governmental support of the dairy product industry.

“It’s of deep concern,” said New Zealand’s Groser. “I hope to see the suspension of these measures as soon as possible to avoid other countries following suit.”

 

Source: Asiaecon.org

 

 

 

 

 

 

 

 

 

Source: www.asiaecon.org |


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