Japan's shadow finance minister wants single Asian currency

TOKYO, May 31, 2009 (AFP) - The man who hopes to be Japan's next finance minister envisions an Asia united by a single currency, saying the dollar may no longer reign supreme in future.

The opposition's "shadow finance minister" Masaharu Nakagawa also says he hopes to reshape the world's number two economy into a kinder, gentler place if his Democratic Party of Japan (DPJ) wins elections this year.

"You can't invigorate society only through... the law of the jungle where the strong become stronger," he told AFP. "The same player would always win if there were no handicaps in golf."

Japan's conservative Prime Minister Taro Aso must call elections by September, when the DPJ hopes to topple his Liberal Democratic Party, which has been in power for almost all of the past half century.

In an interview with AFP, Nakagawa outlined some of the changes he would like to make if he becomes finance minister in Asia's largest economy, which is now in the throes of its worst post-World War II recession.

Looking at the broader region, he said Asia should tackle security and economic issues as "a unified community."

"Asian currencies should be unified into a common currency in the course of the region's forming a single economic zone," Nakagawa told AFP.

He did not give a timeframe, saying it would largely depend on economic and political developments in China.

Nakagawa said people must "take into account the possibility that the dollar might not function as the key currency any more in the medium and long term" as the world seeks a new order in the post-Cold War era.

Until an Asian common currency emerges, he said, "the Japanese government should make efforts to have the "Asia zone" use the yen, not the dollar, for trade settlements. It's time for Japan to launch this plan."

Japan's government could extend lending to the International Monetary Fund on condition that it is in yen while guaranteeing bonds by Asian countries if they are denominated in the Japanese currency, he said.

Nakagawa, who turns 59 in June, studied foreign affairs at Georgetown University in the United States in the 1970s. The father-of-four represents a constituency in central Mie prefecture.

He says he is a "generalist" rather than an economic expert.

Speaking more broadly on his vision for Japan, he said the country had followed the United States and its liberalism in the past, but the time had come for the nation to be "more Asian."

"Now is the time for Japan to say what kind of world it would like to create, not to adapt itself to the given circumstances as it has "- since its defeat in World World II, he said.

At home, Nakagawa's vision is in line with the goal of a "compassionate society" advocated by his new party boss, Yukio Hatoyama.

The DPJ has proposed slashing corporate taxes for small companies so that they have a better chance to compete.

The party has said it will spend 21 trillion yen (220 billion dollars) over the next two years to revive the economy, including the tax cuts, payouts for families with children, as well as scrapping expressway tolls.

Prime Minister Taro Aso's government plans spending of 15.4 trillion yen for the current business year to March 2010. (Asia One, 5.31.2009, Miwa Suzuki) http://news.asiaone.com/News/Latest+News/Asia/Story/A1Story20090531-145078.html

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