By DANIEL DROSDOFF, Tokyo

Ten years ago, when times were "normal," and the world looked to East Asia, and to Japan in particular, for economic leadership, the first in a series of symposiums held by the IDB and the Export-Import Bank of Japan featured presentations about Latin America's painful efforts to emerge from debt crisis and recession.

But this past June, when the fifth such gathering was convened in Tokyo, it was clear that the roles had been reversed. Speakers without exception lauded Latin America's present stability and positive economic performance.

Leaders from the Japanese private sector and government officials from the prime minister on down applauded Latin America's success in cutting inflation from double digits 10 years ago to single digits today. Instead of the high tariff barriers of 15 years ago, Latin American and Caribbean trade regimes are now among the most open in the world. Most government fiscal deficits are under control, and despite the shock waves of the Asian financial crisis, the region is still poised for growth.

In normal times, Latin America's relative economic health would be a magnet for greater Japanese investment. But these times are far from normal. East Asia is now the world's financial trouble spot, suffering from a round of devaluations, spending cutbacks, and banking crises that began last year, and Japan itself is in the midst of a recession and serious banking crisis that require major government intervention. Japan's leaders say they are studying the experience of Latin America and the Caribbean for clues on the best ways to deal with financial crises, especially in the banking sector.Among the other speakers at the June seminar were the presidents of Peru and Uruguay, numerous ministers and deputy ministers from both Japan and Latin America and the Caribbean, and senior executives from Japan's private sector.

In his address, IDB President Enrique V. Iglesias looked beyond the current Asian crisis to picture a time in the near future when a resurgent Japan would engage in a greatly expanded economic partnership with Latin America and the Caribbean. He urged Japan to diversify its investments beyond manufacturing and infrastructure, saying that other areas of the region's economy now constitute "an enormous pole of attraction for capital."

Looking ahead to a stronger partnership, Japanese government and private sector leaders urged the region to continue deepening its reforms. They stressed that investors need consistency, predictability, stability in the regulatory framework and a level competitive playing field.

Latin America's leaders, for their part, urged Japan to take decisive action in dealing with its economic and banking crises.

Eisuke Sakakibara, Japanese vice minister of finance for international affairs, said Japan now "can learn from the experience and wisdom of Latin America." The East Asian economic crisis is "the beginning of the global crisis of the financial system," he said. "It is a crisis of capitalism."

Sakakibara said information technology has led to massive, instantaneous shifts in international monetary flows. "Once some money flows in one direction, all the money goes in one direction. There is a tendency to overshoot. Addressing this situation is a problem for all of us."

Japan is studying the Latin American experience for its crisis management and quick response mechanisms, Sakakibara said, and it is closely following regional and subregional trade agreements, such as the North American Free Trade Agreement and Mercosur, which will require adjustments in trade and investment strategies.
Mexican Finance Minister José Angel Gurría said Latin America's economies were "solid" despite the current Asian crisis. "There is no substitute for good economic policy," he said. "A failure to take the right measures in a timely way can raise the costs [of adjustment] exponentially. Fiscal discipline is the rule."

President Alberto Fujimori of Peru highlighted the importance of economic cooperation between the two Pacific regions, and urged Japan to take the initiative in strengthening relations. President Julio María Sanguinetti of Uruguay stressed the need for major economic powers, such as Japan to move rapidly to fix their own financial crises to prevent world contagion. "There is nothing worse than a financial crisis," said Sanguinetti. "Banking crises must be resolved. They are like a hemorrhage. The hemorrhage must be stopped before all else." He also assured Japan that the movements toward integration in Latin America and the Caribbean were being conducted in the spirit of world economic opening rather than regional protectionism. "We don't consider Mercosur a fortress," he said. "Instead, it is a platform for insertion into the world economy."

Giving a view from Japan's private sector, Masahyoshi Morimoto, corporate senior vice president of Sony Corp., noted, as did many of the other speakers, that "Japan's presence is low in the region."

Akira Yokoi, executive vice president of Toyota Motor Corp., said he would like Latin America and the Caribbean to have an even better investment climate, policies that favor faster economic growth, freer trade, and more consistent policy management.

Colombian Finance Minister Antonio José Urdinola, who is also chairman of the IDB Board of Governors, recognized the needs of Japanese investors, but he warned against missing opportunities because too much is expected too soon. "Japanese companies should not wait until we have a perfect set of rules," he said. "We invite you to help us make the rules together. You have the know-how and the technology to help us."