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Japan steps out of the shadows at Toronto summit

Japan moved to center stage at the just-concluded Economic summit of the seven major industrial democracies here. For the first time, at least in recent years, there was no ``Japan-bashing.'' The leaders of the six other summit nations - the United States, the United Kingdom, France, West Germany, Canada, and Italy - did not take verbal pokes at Japan's economic behavior.

Moreover, the leaders of a nation once dubbed the ``hermit kingdom'' are now not just talking to their own people. Top Japanese officials held about a dozen briefings for the non-Japanese press. These sessions were crowded - again something new.

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European Community official Michael Lake recalls that at previous summits the Japanese ``gave the impression of a lot of busy people in a corner not really effectively communicating with other people.''

Not any more. At the last of these briefings Tuesday, Michihiko Kunihiro, chief Cabinet counselor on external affairs, was asked how the Japanese had avoided criticism for their continued large trade surplus.

``We didn't manage it at all,'' he replied. ``Statistics talked on our behalf.''

The Japanese economy is booming. Domestic demand for goods and services has risen dramatically, drawing in more imports. Japan's trade surplus, though still large, has been declining. The yen has been revalued enormously, making imports easier. The Japanese have removed many government nontariff barriers to trade, though business still colludes to keep out foreign competition.

``We are making big strides in the Japanese market,'' Mr. Lake said. European Community exports to Japan were up at almost a 25 percent annual rate in the first quarter of this year. The Community reduced its deficit with Japan by some 8 percent in those three months.

Further, the Japanese have just announced several measures in foreign aid and trade that pleased their fellow summiteers.

``The Japanese have a growing sense that Japan should play a greater role in affairs outside of Japan,'' Mr. Kunihiro said. ``We should show greater responsibility in the affairs of the international community.''

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This exercising of Japan's greatly enlarged economic and financial muscle was advanced by Japan's previous prime minister, Noburo Nakasone. But Prime Minister Takeshita also has announced that a major political goal is to have Japan contributing to the world economy positively, to join further in peace efforts and cultural exchanges.

Just before the summit, the Japanese announced the ``more than doubling'' of foreign aid over the next five years to some $50 billion compared with the past five years.

That jump in aid, as measured in dollars, arises partially from the sharp increase in the value of the Japanese yen. For example, in yen terms, Japanese foreign aid disbursements last year rose by 13.5 percent to $7.5 billion. As a proportion of total national output, however, Japan's aid has grown only from 0.29 percent of 0.31 percent.

But Japan has also promised to increase the ``quality'' of its aid by tying less of it to purchases of Japanese goods.

On the fringe of this summit, the Japanese also signed an agreement with the US on cooperation in science and technology and on opening its domestic market further to imported beef and citrus fruits. They also pointed to their relieving 17 of the world's poorest nations of the burden of interest payments on $5.5 billion in past foreign aid loans.

Just prior to the summit, Japanese Finance Minister Kiichi Miyazawa proposed a plan for relieving the debt burden of the middle-income nations, such as Brazil and Mexico. The plan provided for debtors to transfer some currency reserves into an International Monetary Fund account to be used to repay bank loans. With this assurance of repayment, banks would then negotiate with each debtor to turn parts of the debt into securities and to reschedule other parts. But, faced with the resistance of the US, France, and others, Mr. Takeshita did not push it further at the summit.

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