Tokyo. The global stakes are too high for the territorial row
between China and Japan to be allowed to escalate, World Bank
Managing Director Sri Mulyani Indrawati said on Thursday, calling on
their leaders to resolve the dispute.
Relations between China and
Japan are at their worst in years over competing claims to
sovereignty over islands in the East China Sea. The dispute stoked
violent protests and calls for boycotts of Japanese products in China
Chinese finance officials, including central bank
governor Zhou Xiaochuan, pulled out of this week’s IMF and World Bank
meetings in Tokyo, in what analysts said was a deliberate move to
embarrass Japan on the international stage.
Sri Mulyani, a former
Indonesian finance minister, told Reuters in an interview the row was
not likely to dampen the mood of the Tokyo meetings, but came at a
time when the world economy was already reeling from uncertainty over
the euro zone crisis.
She said Japan’s and China’s leaders had a
responsibility to resolve the dispute so that it did not cause
unnecessary economic and social damages.
between China and Japan is just too important not only for these two
countries,” Sri Mulyani told Reuters. “We all know that China
and Japan are the second and third largest economy in the world, so
anything that happens between the two countries is not only affecting
the two sides, but also affecting the region as well as globally.”
“The stake is just too high,” she said, adding: “We
already have a lot of uncertainty coming from the global (economic)
weakening so it is in the mutual benefit of the two countries to
settle this dispute in an … acceptable way.”
makers have reported tumbling sales in China for September, with
Toyota’s almost halving, confirming the impact of the territorial
row. She said the IMF-World Bank meetings was an opportunity for
global finance leaders to explore policies that could limit the
impact of the euro zone crisis on emerging and developing economies,
that are now clearly slowing.
“Policymakers have to think
about whether they should respond to the short-term turbulence or
should they focus more on the medium-term,” she said.
Sri Mulyani said the crisis could reverse the reduction of poverty in developing
countries over the past 10 years. The World Bank estimated in 2009
that the financial crisis had pushed more than 53 million people into
“We do understand that this can be easily erased
when the economy both in developed and emerging countries suffers
from a setback,” she added.
Fans of Sri Mulyani in Indonesia
last year formed a political party for her in the hope that she may
decide to run for president in 2014.
Asked whether she was
interested in running for president, Sri Mulyani said: “It is
always an honor and for me people asking that kind of question
(implies) there is an expectation, or at least recognition, about the
role I can play.
“But the work at the Bank is so
challenging, especially at this time when many different countries
are facing a lot of risk coming from both global challenges as well
as their own domestic challenges, this is a very demanding time to
focus on that issue.”