By Don Hill and Lisa Kammerud
Prague, 16 June 1998 (RFE/RL) -- Contraction of the Japanese economy -- long regarded as recession proof -- attracts Western press commentary, mostly in tones of alarm.
WASHINGTON POST: There are few signs that Hashimoto is working on a rescue plan
The needed remedy, Mary Jordan writes today in a news analysis in The Washington Post, is for the administration of Prime Minister Ryutaro Hashimoto to exercise bold leadership. That's unlikely to happen, she writes. She says: "Japan is in crisis, according to financial and political leaders in the United States and just about everywhere else. But here at crisis center, there are few signs that Hashimoto is working feverishly on a rescue plan. Rather he plays down the economic mess, and focuses optimistically on how Japanese are in the enviable position of having piles of personal savings."
The writer says: "At the end of last week, when the Japanese yen fell far and fast and brought down every Asian market, Hashimoto jumped on a plane and went campaigning for his party. A key reason Hashimoto seems to be distracted from Japan's and the rest of Asia's economic woes is next month's national election."
Jordan writes: "The falling yen reflects falling international confidence in Japan. A sure way to restore confidence would be for Japan to make bold moves to fix its fundamental and urgent problems, such as clearing the awesome debt banks have -- some estimates say $700 billion or more. But the Liberal Democratic Party already has said it won't deal with that mess, which almost certainly will lead to banks failing and merging, and to property being auctioned off at a fraction of its value, and to more unemployment."
FRANKFURTER RUNDSCHAU: This time Japan must act faster
In the Frankfurter Rundschau today, commentator Henrik Bork also pleads for firm action. Bork writes: "The second round of the Asian crisis has long since begun. This time its centerpoint is Japan, whose government has now been forced to concede officially that the country is in the grip of a severe recession."
He writes: "The first step towards damage limitation would be for the Japanese government to realize that this time it must act faster than it did first time round. One of the mistakes which led to this recession and to the weakening of the yen was its playing down of the first signs of the Asian crisis."
SUEDDEUTSCHE ZEITUNG: Thumbs are down in Japan
Commenting today in the Sueddeutsche Zeitung, Rainer Kohler says alarm is appropriate. He comments: "Thumbs are down in Japan and pessimism is increasing." He writes: "Is Japan, whose shining light provided the lead for most Asian countries, losing its glitz? The world's second-largest economy is stuck in its first recession for 23 years. The yen is going from one low to the next. Investors are fleeing. State loans currently carry an interest rate of just one per cent. But even this does not seem to be helping the economic situation. While Japan's problems are not new, they now cannot be overlooked."
LA TRIBUNE: If the danger is not obvious, the threat is real
An editorial in the Swiss daily La Tribune de Geneve warns that the West should watch Asia carefully. The author writes: "Asia is full of surprises. And its crisis is full of rebounds. Since the end of 1997, (people) have whispered that the region couldn't fall any farther. But (even so) the yen has continued its decline, provoking a wind of general panic, from Peking to Sydney."
The editorial continues: "Is the world truly heading toward a planetary tidal wave? We are forced to admit that if the danger is not obvious, the threat is real." The editorial says that, "an international intervention might yet be able to nip these concerns in the bud."
NEW YORK TIMES: A full-blown recession in Japan could prove the time bomb of the Asian crisis
David E. Sanger writes today in a New York Times news analysis that the U.S. administration of President Bill Clinton seems to be impotent in the growing Asian crisis. Sanger says: "For the last 10 months the Clinton administration has warned that a full-blown recession in Japan could prove the time bomb of the Asian crisis, setting off a sharp fall of the yen and, in turn, a second wave of the economic contagion that is spreading to investors around the globe. Now that appears to be what is happening. But President
Clinton's economic advisers, weary of jawboning their Japanese counterparts, say the United States has very little leverage remaining over Tokyo."
LOS ANGELES TIMES: Chinese leaders find themselves under intense pressure
China meanwhile has lumbered along, staying part of the solution by refusing to be part of the problem, Maggie Farley writes in an analysis today in the Los Angeles Times. Farley says: "With stock markets across Asia plummeting anew yesterday, battered by the now official Japanese recession that has caused the yen to plunge in value, Chinese leaders find themselves under intense pressure to keep a vow that could drastically affect fortunes in this region and across the rest of the globe: The Beijing regime insists it will not devalue its currency, the yuan.
"But each day, as Asia's economic turmoil worsens, that promise gets harder to keep, analysts and officials say. Indeed, while the yen slid past an exchange rate of 146 to the U.S. dollar on Monday, helping to push markets downward in Tokyo; Hong Kong; London; Singapore; Seoul, South Korea; Paris; Manila, Philippines; and Indonesia, China has been lauded as 'an island of stability' in the region. It has protected its currency while those of its neighbors
shudder into free fall, making their exports much cheaper than China's."
FINANCIAL TIMES: China's policy has so far helped to prevent a serious worsening of the crisis
The British newspaper Financial Times says today in an editorial that China's strong-man stance is growing ever costlier, and -- perhaps -- less sustainable. The newsaper says: "The latest threat to the currencies of Asia comes not from a political crisis or a faltering International Monetary Fund program, but from the giant of the region, Japan. The fall of the yen against the dollar is prompting speculation that China, which so far has held firm against the crisis, may devalue (its currency)." The editorial says: "A devaluation now could be economically and politically disastrous." It says: "And a devaluation may not even be necessary on competitive grounds. China remains the second-cheapest place to manufacture in Asia."
The editorial concludes: "China's policy has so far helped to prevent a serious worsening of the crisis, and has brought the country further into the international fold. A devaluation would reverse this, and would damage the long-term stability of the region."