Prime Minister Keizo Obuchi told his Thai counterpart Wednesday that Japan — as it continues on its recovery track — may be able to act as a stronger engine of growth and soak up more exports from Thailand.

The topic came up as Obuchi and Chuan Leekpai met at the Prime Minister’s Official Residence to discuss the ongoing Asian crisis.

The two prime ministers both said they believe the worst is over for Thailand, where the Asian Contagion began in July 1997 when former Prime Minister Chavalit Yongchaiyudh squandered the nation’s foreign reserves in a vain attempt to maintain the Thai baht’s dollar peg, only to lift the peg days later.

The two leaders also stressed that a full recovery in Thailand is dependent on an Asiawide recovery.

In that regard, Chuan asked that Japan import more Thai products, which would help revitalize his country’s small firms.

Japan has been under international pressure since the crisis began to aid Asia’s recovery through imports.

Obuchi told Chuan that Japan may be able to increase imports from Thailand as the Japanese economy itself is finally moving toward self-sustained growth.

In fact, Japan’s imports from the rest of Asia are rising. On Monday the Finance Ministry reported that imports from Asia during the April-September half year increased 2.5 percent from the same period 12 months earlier. Meanwhile, imports from other regions slipped.

Obuchi also said Tokyo is ready to send financial advisers to help Bangkok reform its badly managed financial institutions.

Chuan’s government has pushed almost a dozen wildly unpopular economic reforms through Parliament, but the financial sector’s hesitancy and inability to deal with mountains of bad debt is keeping Thailand’s nascent recovery in its infancy.

Obuchi also said Japan will consider sending an economic research mission to Thailand to look for investment opportunities for Japanese firms.

Earlier during his four-day tour of Japan, Chuan had called for increased Japanese investment.

Yongchaiyudh’s disastrous attempt to maintain the artificial peg was repeated that summer in Indonesia and later that year in South Korea. Those moves — together with bailout packages designed by the International Monetary Fund — had much more than painful economic repercussions; they also reshaped corrupt political landscapes in the three countries.

The crisis eventually brought down the Yongchaiyudh government and brought Chuan’s coalition to power. In South Korea, longtime opposition leader Kim Dae Jung suddenly rose to power, and in Indonesia the 32-year, iron-fisted rule of President Suharto crumbled.

Chuan pushed the economic reform bills into law while acknowledging they would bring about some pain.

The pain may be lifting. His government recently notified the IMF that it would not draw he final tranche of its $17.2 billion bailout package, the baht has stabilized just under 40 to the dollar and interest rates and inflation are on the wane.

But he still has plenty to do. The financial institutions continue to dawdle under the weight of their nonperforming loans — said to be 50 percent of total lending. The government’s privatization program has been grounded by a swell of labor opposition, and as of yet no social safety net exists for those hurt by the economic crisis.

Chuan arrived in Japan on Sunday; he was scheduled to leave Tokyo later Wednesday.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.