G-7 talks on global economic crisis called 'intense'

WASHINGTON (CNN) -- Finance ministers and central bank presidents from the world's seven leading economic powers put what was described as a "very intense focus" on the burgeoning global economic crisis during a daylong meeting Saturday.

However, no new initiatives were announced at the conclusion of the six-hour gathering in Washington. U.S. Treasury Secretary Robert Rubin said decisions on specific proposals -- including U.S. proposals to overhaul the global financial architecture -- will be left until a later date.

"There clearly was a very intense focus on the issue with respect to the current crisis and a deep sense of commitment to do everything sensible to deal with it," Rubin said.

Finance leaders from the so-called G-7 nations -- the United States, Britain, France, Japan, Canada, Italy and Germany -- issued a communiqué at the conclusion of Saturday's talks, saying that they had "reaffirmed the key importance going forward of each country in the global economy doing its part to promote recovery and financial stability."

"We must continue our efforts to strengthen the open world trading system, with free trade flows and open capital markets," the communiqué said.

Japanese Finance Minister Kiichi Miyazawa

Japan pledges Asian aid package

Also on Saturday, Japan announced a $30 billion aid package to promote economic stability among battered Asian nations. Finance Minister Kiichi Miyazawa said the plan would also help revive the sluggish Japanese economy.

Miyazawa has discussed the initiative with the finance ministers of Indonesia, South Korea, Malaysia, the Philippines, Singapore and Thailand, in response to the economic turmoil that began sweeping through the six nations last year and now is spreading globally.

"I told them what we are trying to do for this initiative is not only for their economies, but also Japan's benefit, because, after all, Asian economies and Japan suffer exactly the same problems," Miyazawa said.

Asian nations are suffering from high unemployment rates, falling corporate profits and difficulties in repaying mountains of private debts.

Japan accounts for roughly two-thirds of Asian economic output, and its economy slipped into recession this year.

"Unless Asian economies recover, we do not think the Japanese economy can recover. Unless the Japanese economy recovers, (it) won't be good for the recovery of Asian economies," Miyazawa said.

Boosting Japanese exports throughout the region, Miyazawa said, is the battery that will jump-start the economies.

Half of the $30 billion will go toward medium- to long-term financial recovery, with the rest set aside for potential short-term capital requirements as economic reforms are implemented, Miyazawa said.

Other Asian nations back Japan's plan

The other Asian nations welcomed Tokyo's initiative and called for its early implementation.

"It's quite timely for Thailand because we believe ... we need to restimulate the domestic demand in view of the contracting economy," said Thai Finance Minister Tarrin Nimmanahaeminda.

"The best way to do that is actually to run deficits, and an even better way is to run deficits of external and long-term financing," Tarrin said. "So if the Miyazawa plan allows that kind of financing, and it seems to, it's exactly what we need," he said.

Miyazawa said he would hold "urgent bilateral talks" to implement the plan, following the annual meetings of the IMF and World Bank, which get under way Sunday.

He said all of the Asian countries involved agreed to seek the stability of foreign exchange rates for sustainable economic growth.

Britain, France support Clinton's IMF proposal

Also on Saturday, a White House spokesman announced that U.S. President Bill Clinton had received support for his proposals to reform the IMF from British Prime Minister Tony Blair and French President Jacques Chirac.

Clinton urged the IMF on Friday to change its procedures to provide emergency loans more quickly to countries facing economic difficulties. He said substantial support early could help avert the economic meltdowns that Asian nations and Russia have experienced.

Rubin and U.S. Federal Reserve Chairman Alan Greenspan lobbied for the proposals at the G7 talks. Rubin said afterward that no action was taken on the U.S. initiative.

The IMF provided more than $100 billion in bailout funds to some of the countries facing economic difficulties, but critics have attacked it for failing to contain the crisis, which now threatens Brazil.

Brazil negotiating for multibillion-dollar loan

Rubin met Friday with Brazilian Finance Minister Pedro Malan, who has confirmed reports that Brazil is negotiating for a multibillion-dollar loan package from the IMF, the World Bank and private creditors.

Announcement of a $30 billion package is expected after Sunday's presidential election in Brazil, as the United States works with the IMF to keep the largest economy in Latin America from becoming the latest victim of the crisis, which began in Thailand 15 months ago.

Clinton scolded Congress on Friday for what he called the "inexcusable" delay in its approval of his request for $18 billion to replenish the IMF's depleted coffers.

Russia seeks to restore investors' confidence

A Russian delegation, in Washington to meet with IMF Managing Director Michel Camdessus and to attend part of Saturday's G7 meeting, focused on restoring the confidence of Western investors rather than pushing for immediate payments from the IMF, a delegation member said.

Russia's economy has spiraled downward in recent weeks after the government defaulted on some foreign debts and devalued the ruble.

The banking system is close to collapse, and some officials have said Russia may resort to printing money if the IMF does not approve a new payment soon from a $22.6 billion rescue deal drawn up over the summer.

Finance Minister Mikhail Zadornov said Friday that Russia was counting on receiving $2.5 billion by the end of this year to help stabilize the economy.

The IMF, which paid $4.8 billion from the new international aid package in July, has held off making another payment until the Russian government comes up with a coherent economic program.

The second payment of $4.3 billion was originally scheduled for mid-September, to be followed by a $2.1 billion payment in November.

The Associated Press and Reuters contributed to this report.