Prime Minister Yoshiro Mori promised Wednesday to call on oil producers to make efforts to stabilize crude prices, saying the recent surge in the prices could have a negative impact on the global economy.
“There is a possibility that the surge in crude oil prices will adversely affect the world economy,” Mori said in a House of Councilors plenary session.
“We will make use of opportunities of international gatherings such as those of the International Energy Agency and the Asia-Pacific Economic Cooperation forum to share the notion that stability in oil prices is important . . . and call on oil producers” to work to stabilize them, Mori said.
Although IEA members believe it is not necessary for them to release oil from reserves at the moment, Mori said Japan would “swiftly deal with” such a step with the international community if the need arises in the future.
Mori was responding to a question by Kazuyoshi Shirahama of New Komeito on the third day of questioning by lawmakers on his policy speech delivered last week.
Hayami seeks output
PRAGUE (Kyodo) Bank of Japan Gov. Masaru Hayami urged petroleum-producing countries Tuesday to increase oil output, saying oil price stability is essential for global economic growth.
Speaking at a joint annual meeting of the International Monetary Fund and the World Bank, Hayami said, “We call for appropriate increases in supplies and other necessary measures to promote long-term price stability, as this is in the mutual interest of oil-producing and -consuming countries.”
He said the recent price surges “may have an undesirable effect on the growth of the world economy.”
The surge in crude oil prices has been a major focus in a series of high-level international financial meetings this week in the Czech capital.
On the Japanese economy, Hayami said Japan will maintain supportive macroeconomic policies to ensure a self-sustaining recovery takes root.
He said the Japanese government plans to compile an extra budget aimed at stimulating the economy and the central bank will maintain its easy monetary policy.
The supplementary budget, estimated at between 3.5 trillion yen and 4 trillion yen, is aimed at promoting projects in priority areas such as information technology and environmental protection.
On the reform of the IMF, Hayami endorsed the IMF’s recent moves to overhaul its lending mechanism and cited a review of the so-called Contingent Credit Line in order to make the lending facility easier to use.
“We welcome the recent developments in the review of facilities, such as the elimination of unused facilities and the enhanced effectiveness of the Contingent Credit Line,” he said.
Established in April 1999 but never used, the CCL is designed to provide short-term financing to IMF member countries with balance-of-payments problems arising from a sudden and disruptive loss of market confidence.
Hayami reiterated the need for the IMF to accelerate reform of its decision-making structure, including quota shares, voting shares, and IMF Executive Board representation, to better reflect the rising economic power of Asian and other emerging economies.
“An immediate review and correction are called for,” he said.
Japan has argued that the IMF should reallocate its quotas — the pool of resources consisting of the capital subscriptions paid by each member state — in order to give Asia a bigger voice in the leading international lending agency.
The combined quotas of Asian countries, excluding Japan, are only 11 percent, compared with 37 percent for European countries.
Hayami later told a press conference Japan pushed for a review of the quota system at the Group of Seven meeting of finance ministers and central banks last Saturday and at other IMF forums.
Hayami also stressed the importance of promoting regional monetary and financial cooperation in East Asia to complement the IMF’s function.
Hayami told reporters he is pleased with the effect of the euro-buying joint intervention last Friday by Europe, the United States, Japan and Canada, although the future development remains to be seen.
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