日米国際金融シンポジウムでの神田財務官スピーチ「Advancing Multilateralism to Restore the International Order」（令和５年11月17日 於：軽井沢）

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SYMPOSIUM ON BUILDING THE FINANCIAL SYSTEM OF THE 21ST
CENTURY: AN AGENDA FOR JAPAN AND THE
UNITED STATES November 17, 2023

Advancing Multilateralism to Restore the International Order

Vice Minister of Finance for International Affairs
Ministry of Finance Japan
Masato Kanda



1.

Introduction
Good evening, everyone.
I am delighted to return to this sympodium, where leading figures of
Japan and the United States get together and candidly exchange views
and wisdom. At the last sympodium held in Washington
D.C., I started
my remarks with this message: “humanity is standing at the critical
juncture of its history”. After one year, it seems like we are at the same
crossroad. But the uncertainty around us is getting thicker like a dense
fog. I also feel the ground we stand on is becoming much less stable due
to massive tectonic shifts.
The illegal and unprovoked war of aggression by Russia against
Ukraine continues with no end in sight, while many parts of the world
are still suffering from the deep scars left by the pandemic. In the


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meantime, the turmoil of the Middle East with complex causes,
stretching back to as far as 2,600 years ago, violently erupted by Hamas’
attack against Israel, which has evolved to a deadly conflict and
humanitarian crisis. Geopolitical risks have intensified in places such as
the Caucasus and the Sahel. Tensions are simmering around the Taiwan
Strait.
Furthermore, the stable global climate that human being has been
taking for granted for more than 10,000 years seems to be becoming a
thing of the past, with record-breaking extreme weather events and
natural disasters becoming commonplace. Looking at financial markets,
volatility has been prohibitively high, and many market participants are
being dismayed in the deep fog of uncertainty. Under such circumstances,
ensuring price and currency market stability, fixing the widening income
disparity, and enhancing people’s welfare are becoming all the more
difficult.
However, what I am concerned most is not necessarily those events
themselves. My biggest concern at this point is the fact that the existing
global order and its governance arrangements are melting down,
meaning that we are losing a solid foundation to collectively address


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global issues and foster global public goods. Therefore, the most critical
task is to restore the international order and its governance arrangement
through collaboration underpinned by the multilateralism.
This year, Japan has been squarely facing with this critical task as the
chair of two important international fora: the G7 and ASEAN plus 3,
namely Japan, Korea, and the People’s Republic of China. We are also
strengthening ties with countries of so called the “Global South” such as
India who has chaired the G20 this year.
Today, I would like to share with you our major achievements and
the remaining tasks, so that we can raise the momentum to pursue our
collective journey to restore the international order with multilateralism.



2.

Initiatives under Japan’s G7 Presidency


2.1.

Tackling Immediate Challenges
First, let me start with immediate challenges, namely wars,
humanitarian crises, and vulnerabilities of low- and middle- income
countries.



2.1.

1.

Support for Ukraine


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Among a variety of global issues, supporting Ukraine has been the
top priority in the G7 finance track. Throughout our G7 presidency, we
invited Ukrainian Finance Minister, Mr. Marchenko to all G7 Finance
Ministers and Central Bank Governors Meetings. This shows our
unwavering solidarity with Ukraine. In addition, I visited Kiev this
August to hold the first Japan-Ukraine Finance Dialogue, and to see the
devastation of the aggression firsthand.
The issue at stake here is not only for Ukraine to fight back against
the Russian invasion, but also for the entire international community to
safeguard the fundamental underpinning of the international order such
as the rule of law, sovereignty and territorial integrity. Let me also stress
that Ukraine is committing to ambitious reforms, in particular
governance and anti-corruption. Those are the reasons why the G7
remains committed to supporting Ukraine’s urgent financing needs with
further contributions in 2024, including additional support from Japan.
The continued strong financial support by the
U.S., as per the
supplementary budget request for 2024 by President Biden, is critical. I
strongly hope the budget will be approved by the
U.S. Congress.

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2.1.

2.

Sanction against Russia
Japan has also implemented a series of economic sanctions against
Russia in close cooperation with the United States and other G7
members. We are now working hard to enhance the effectiveness of our
sanctions, especially by closing circumvention and evasion through third
countries.
Also, we should continue our efforts to ensure that Russia pays for
the long-term reconstruction of Ukraine. The damage caused by Russian
vandalism is estimated to be at least $411 billion as of March this year,
and the damage continues to grow. It is just impossible and unjust if we
ask our taxpayers to bear all the cost. Ensuring that the aggressor will
ultimately pay such cost will also deter anyone from changing the status
quo by force in the future. Therefore, we must explore all possible
avenues, including utilizing immobilized Russian sovereign assets.



2.1.

3.

Conflict between Israel and Hamas
Concerning the ongoing conflict between Israel and Hamas, we are
keeping a close eye on the situation with grave concern. As stated in the
latest G7 Finance Ministers’ statement on October 12, we unequivocally


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condemn the terror attacks by Hamas. They must release all the hostages
immediately. Japan also calls on all the parties to act to avoid further
civilian casualties, based on international law. Since the immediate
priority is to address the humanitarian crisis in the Gaza Strip, Japan will
extend Emergency Grand Aid of $75 million.



2.1.

4.

Supporting vulnerable countries
At the same time, we must recognize that negative spill-over effects
of wars, conflicts, and pandemics are disproportionately felt by
vulnerable countries including through commodity price hikes, and
supply chain disruptions. If left unaddressed, disturbances such as civil
unrest may break out in the affected countries, which will put a further
strain on the international economy and the international order.

To stop such a vicious cycle, the G20 has been working hard at
supporting low-income countries to deal with debt issues through the
Common Framework. We welcome the recent finalization of the MOU
on Zambia, although it took too much time. To further enhance the
credibility of the Common Framework, we need to reach an agreement
for other countries, such as Ghana and Ethiopia in a more swift and


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predictable manner. Addressing debt vulnerabilities of middle-income
countries is also an urgent task. On Sri Lanka, Japan has been leading the
official creditor committee with France and India as a co-chair. As we
confirmed in October at the margin of the IMF/World Bank Annual
Meetings, significant progress has been made and we agreed to continue
our close collaboration to get things done as expeditiously as possible.
To prevent future debt crises, Japan is also taking a lead in
encouraging all creditors and debtors to enhance debt transparency.


2.2.

Addressing Structural Challenges
As these stories show, we are fighting at the forefront of immediate
global challenges to clear away the dense fog covering the international
economy. However, we should also address the structural challenges to
make the ground that we stand on more stable. Now, I would like to talk
about concrete mechanisms that we are trying to develop to address four
key structural challenges through a multi-lateral approach: (i)
accelerating green transformation and enhancing supply-chain resilience,
(ii) strengthening preparedness for pandemics and disasters, (iii)
fostering global public goods through reforming MDBs, and (iv)


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adapting our economy to new digital technology.



2.2.

1.

Accelerating green transformation and supply-chain
enhancement
Let me begin with accelerating our green transformation. The global
economy needs to produce much more clean energy products in a more
stable and sustainable way. In this context, diversifying the supply chains
of such products through a multi-lateral approach matters a lot, as these
supply chains are currently concentrated in a small number of countries.
Such efforts will also create new opportunities of local value addition for
developing countries who are currently just mining and exporting critical
minerals. To unlock such potential, Japan is taking the initiative of
developing a brand-new multilateral mechanism called “Partnership for
Resilient and Inclusive Supply-chain Enhancement”, in short RISE, in
close cooperation with like-minded countries and the World Bank. We
successfully launched RISE at the occasion of the IMF/World Bank
Annual Meetings last month in Marrakesh, with total initial contributions
of over $50 million. We will implement RISE on the ground in
developing countries and look forward to continuing cooperation with


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the
U.S.



2.2.

2.

Enhancing preparedness for pandemics and disasters
Grappling with pandemics and disasters also requires concrete
multilateral mechanisms. The Pandemic Fund was launched at the G20
Joint Finance and Health Ministers meeting last year, and approved the
first round of funding allocations in this July. Japan, with our $70 million
contribution, keeps supporting the fund.
However, the Pandemic Fund does not have a function of mobilizing
financing for responding to huge and immediate financial demands in
case of outbreaks. The G20 Joint Finance Health Task Force helped the
Ministers shape a common understanding on the functional gaps in the
existing financing mechanisms based on a mapping analysis. We will
continue our multilateral efforts to strengthen the financing framework
for pandemic response at the global level to address these gaps.
We also need a similar mechanism focusing on Asia. The Chiang Mai
Initiative Multilateralization, or CMIM, a multilateral swap network, has
played an important role in maintaining financial stability in this region.
As the causes of crises have become more diverse, now is the time to


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strengthen the CMIM to respond to natural disasters and pandemics. This
year, as a co-chair of the ASEAN+3, Japan, together with Indonesia, is
leading discussions towards creating a rapid financing facility. The
facility will enable member countries to access financing in the event of
exogenous shocks such as natural disasters and pandemics.



2.2.

3.

Role of MDBs to supply global public goods
Strengthening MDBs to better address structural cross-border issues,
such as climate change and pandemics is another big issue. In fact, the
G20 has made MDB evolution as one of its key agenda items to
safeguard global public goods, and requested them to review their vision
and mission, as well as operating and financial models.
To increase the lending capacity of MDBs, the efficient use of their
existing capital is essential. Japan strongly supports their efforts in
developing innovative financing tools including the Portfolio Guarantee
Platform, and we have just announced our commitment to this
instrument, which will contribute to boosting the IBRD’s lending
capacity by a few billion US dollars.