Miyazawa, Jin worried over U.S. economic woes

by Yosuke Naito and Eric Johnston

KOBE — Finance Minister Kiichi Miyazawa and his counterparts from South Korea and Europe expressed concern Saturday that the slowing U.S. economy could deal a major blow to the economies of their respective regions, Japanese government officials said.

Miyazawa and Jin Nyum, South Korean finance and economy minister, agreed on the need to closely monitor further developments in the U.S. economy, which they said could have a great impact on Japan, South Korea and the entire Asian region.

Miyazawa expressed a similar view at a separate meeting with the representatives of the European Union, attended by Swedish Finance Minister Bosse Ringholm, Belgian Finance Minister Didier Reynders and European Commissioner Pedro Solbes Mira, according to the officials.

Sweden currently holds the presidency of the 15-country EU, an allocation which changes every six months, while Belgium currently chairs the 12-member euro zone.

Although the European economy is moving in a positive direction, Reynders acknowledged that the slowdown in the U.S. economy could have a negative impact on European economic growth.

Miyazawa told his EU counterparts that the U.S. economy is highly likely to achieve a soft landing because of a series of surprise interest rate cuts earlier this month. , the officials said. Miyazawa met with his South Korean and European counterparts before a two-day Asia-Europe Meeting (ASEM) of finance ministers here.

During his talks with Jin, Miyazawa said that Japan’s recent sluggish stock market conditions have largely been caused by U.S. markets and noted that the corporate sector is leading a gradual economic recovery, the official said.

Miyazawa, however, added that private consumption still

remains stagnant and that the ongoing information-technology revolution in Japan could considerably change the employment landscape. , the official said. Explaining the state of the South Korean economy, Jin said that Seoul has achieved 9 percent growth in 2000 but that many projections for 2001 point toward a slower growth rate, the official said.

Miyazawa lauded South Korean efforts to implement economic structural reform by dissolving the nation’s plutocracies, the official said.

Speaking on the development of EU economies over the past year, the EU representatives said that the overall trend remains positive although there have been some negative effects from EU integration.

On a positive note, they said that inflationary pressure is now calming down thanks to the easing in crude oil prices and that various reform measures are producing favorable results in the European economy.

Miyazawa also met with his Indonesian counterpart Prijadi Praptosuhardjo, who thanked Japan for its support.

Praptosuhardjo said that the year 2000 had seen a positive turnaround for the Indonesian economy and that the growth rate had increased while government debt had decreased.

But he added that the economy has still not recovered to pre-1997 levels. He ended his meeting by thanking Japan for its assistance over the past four years in helping Indonesia recover from the crisis.