Japan's Aid Push

It was only a matter of time before Asia's richest industrial power tried to accomplish by friendly persuasion what it had failed to win in war: economic dominance of a huge region. Last week, amid toasts in French champagne to Oriental solidarity, Japan made its boldest move in economic diplomacy in 30 years. It invited nine Southeast Asian nations to its first postwar trade-and-aid conference and, to general surprise, minister-level delegations came from eight--Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, South Viet Nam and Thailand. While many guests still held grudges against Japan, the mood was summed up by Malaysia's Foreign Minister Lim Kim San: "Bad memories die hard, but the fact that eight Asian nations have responded is proof that they are more concerned about the future than the past."

In other words, they wanted to know what Japan would give them. Before anybody could say "Greater East Asia Co-Prosperity Sphere," the Japanese were dangling goodies. Premier Eisaku Sato and his colleagues promised to expand their aid for transportation and communications, ports and harbors. Specifically, the Japanese said they would increase what they loosely call economic aid--including war reparations, long-term credits, private investments and government grants--from $350 million in fiscal 1965 to $870 million in fiscal 1968, mostly for Southeast Asia. Naturally, Japan hopes that such pump-priming will expand its private business in the region, which is the second-largest market (after the U.S.) for Japanese goods and services.

The market is rapidly growing. Japanese teams are making surveys for a power project in Thailand, a harbor in Cambodia, fertilizer plants in the Philippines, Indonesia and Malaysia, and numerous other industries in the area. They are also surveying and likely to win some multimillion-dollar construction contracts in the Mekong River development project in Viet Nam, Thailand, Laos and Cambodia. Throughout Southeast Asia, Japanese businessmen and local entrepreneurs have set up 35 joint companies, including steel mills, auto-assembly plants, transistor-radio factories and big iron, copper, bauxite and nickel mines.

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