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Japan to invest $2bn in emerging markets

Japan to invest $2bn in emerging markets
Written by Kabanda Chulu
Wednesday, November 19, 2008 6:01:40 PM

THE Japanese government has devised a plan to invest US $ 2 billion to help recapitalise banks in smaller emerging markets such as Zambia.

According to a communique issued after a meeting between Japanese finance minister Shoichi Nakagawa and World Bank president Robert Zoellick, Japan would become a key founding partner in a World Bank fund created to support and help recapitalise banks in smaller emerging markets.

The World Bank in Zambia has since projected an increase in its annual lending from US $19 billion to US $35 billion due to the recent international financial crisis.

Japan’s contribution would be the first to the fund, which was announced last week by Zoellick as part of the World Bank’s response to the crisis that includes a substantial increase in financial support for developing countries.

Zoellick explained that as part of the larger response to the financial crisis, the World Bank has included a substantial increase in financial support for developing countries.

“The fund aims to inject capital into banks in smaller emerging markets, which may suffer as investment flows decline in the wake of the global financial crisis because this will particularly hurt small and medium-sized enterprises,” stated Zoellick.

And Nakagawa stated that Japan’s investment of US $2 billion is a sign of the strong partnership between the Japanese government and the World Bank Group.

He stated that the contribution would be made through the Japan Bank for International Cooperation (JBIC) and would mark the successful launch of the fund.

“We highly appreciate the World Bank’s response to the financial crisis and this initiative to recapitalise banks is similar to the domestic measures we are taking to stimulate the Japanese economy,” stated Nakagawa.

The World Bank has pledged to increase financial support for developing countries, including the launch or expansion of four facilities for the crisis-hit private sector that is critical to employment, recovery and growth.

Labels: DEVELOPMENT, INVESTMENT, JAPAN

posted by MrK @ 6:03 PM