PG.05
CONFIDENTIAL
Debt
Mr. Miyazawa asked whether there were any other issues which the Summit. the Prime Minister thought should be addressed at The Prime Minister said that he would like to take a long term the problem of developing country debt. Many of these countries were basket cases which were getting poorer year after year as a result of their aggregated debt. The longer we failed to write off their stock of debt, the more they would sink into despair. He was not convinced that we had done all we could to help resolve this problem. Mr. Miyazawa asked which countries we had in mind. The Prime Minister said that he was thinking in particular of Sub-Saharan Africa and some of the poorer Caribbean countries.
Mr. Miyazawa said that the Japanese Finance Ministry was strongly resistant to writing off debt since this was equivalent to declaring a country bankrupt and made it difficult to extend new money. The Prime Minister pointed out that if debt was not written off, overseas aid was simply
simply being used
used to finance interest repayments. Japan was a very generous aid donor, yet a lot of her aid was probably being used by very poor countries simply to recycle their debt. It would be better to write off some of this debt and avoid the need for an ever increasing aid programme.
For many developing countries the main problem was that they could not sell what they produced. Part of the answer lay in the GATT. The developed countries were handing out aid with one hand yet at the same time keeping their markets closed to many of the products of the developing world. Mr. Miyazawa said that he recognised the existence of such basket cases and was willing to look at what could be done to help. Japan did not expect these countries to be able to repay very much of their debt. The Prime Minister said that the UK had already written off some historic debt and would continue to do so. we hoped that other countries
would take similar measures.
Prime Minister's visit in September
The Prime Minister said that he was very much looking forward to coming back in September. He was planning to bring a delegation of 12 senior British businessmen, led by Michael Perry. The Priority Japan Campaign had been a huge success. There was substantial and growing business cooperation between the UK and Japan.
be a
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The Prime
MI. Miyazawa said he hoped the visit would success. As le had told the Foreign Secretary in Japanese Government would put out the red carpet. Minister said that there would be a lot to talk about. was long overdue. If Mr. Miyazawa had no objection, like
while he was announce his September visit Mr. Miyazawa agreed that this would be a good idea.
to
The visit he would in Tokyo.
CONFIDENTIAL