Bush: “I will Continue with the Strong Dollar Policy”

United States President George W. Bush stated on Saturday, “We are planning to solve the short-term, long-term deficiency problem by maintaining the strong dollar policy.”

Foreign Affairs and Trade Minister Ban Ki-moon stated that during a summit meeting held at Hyatt Hotel in Santiago with President Roh Moo-hyun, President Bush, who visited Chile to attend the Asia-Pacific Economic Cooperation (APEC) forum, said, “We are planning to reflect such contents (economic policy) in the beginning of next year and announce a budget bill that increases the retirement pension and heath insurance in one’s old-age funding.”

Also, President Bush said, “Free and fair trade will give an optimistic outlook on the global economy, which will in return benefit South Korea.”

On this matter, President Roh showed an optimistic stance, saying, “I have strong faith in U.S.’s plan, which is leading the world’s economy. If President Bush and U.S. government enact such policy of lasting credibility, it will greatly help to rebuild the Korean companies and the Korean economy.”

On the same day, President Bush explained the similar view during a one-on-one meeting with Japanese Prime Minister Junichiro Koizumi. Koizumi positively responded, saying “‘Strong dollar’ will not only positively affect the U.S. economy but also it is crucial to the global economy.”

However, the Japanese press reported that the Japanese government highly regards President Bush’s comment of “strong dollar” as an appreciative comment related to the Iraqi problem and that there is no change of its inner nature of preferring a weak dollar.

As the “Paris Club,” a conference among the creditors of developed Western countries, recently accepted U.S.’s request and agreed to write-off 80 percent of Iraq’s foreign debts with no conditions attached, U.S. needed to properly pay back to the creditor nations, Japan and the European nations.

The Tokyo foreign exchange market related officials prospected that there is a possibility of foreign exchange rate conflict between U.S. and Japan since the Japanese government will get involved if the yen-dollar exchange rate drops below 100 yen, even though President Bush commented about maintaining the strong dollar policy.

Jung-Hun Kim Won-Jae Park jnghn@donga.com parkwj@donga.com