The Geneva-based United Nations Conference on Trade and Development (Unctad) yesterday gave an unexpected ringing endorsement of Japan's plan to provide a US$30 billion aid package for Asia, saying the programme would have more impact on a global recovery than a domestic fiscal boost. Unctad said the Japanese aid would produce a significant increase in activity, not only in Asia and Japan, but also Europe and the US. 'On Unctad estimates, the global growth impact of such a plan would be greater than that of a domestic fiscal stimulus of an equal magnitude,' it said. Japan has pledged the world's largest economic support packages to the region, amounting to $43 billion, including about $28 billion of long-term financing and about $20 million of trade insurance, plus grant aid and technical assistance. Earlier this month, it pledged bilateral support in response to the crisis, worth $30 billion. Unctad said its simulations showed a Japanese aid package to Asia of $100 billion could add as much as $380 billion to global output between this year and 2000. In Southeast Asia, such a package would also add more than 17 percentage points to cumulative growth, with countries such as Indonesia benefiting most, while Korea would see an impact on growth of more than 10 percentage points. Furthermore, gross domestic product growth in the US and Europe also would be improved as a consequence of a large Japanese aid package to Asia. Unctad said its simulation meant the US did not need to bear such a heavy responsibility in trying to cushion, through financial aid packages, the global economic adjustment. The study noted that its findings did not negate the need for a fiscal stimulus package, which was still needed to promote a cyclical upturn in Japan. It warned that as it stood, it was insufficient to address the structural constraints in the Japanese economy. 'In light of Japan's regional and global importance, the study therefore recommends policy action on three fronts; a temporary fiscal stimulus, aid to the Asian countries in crisis, and structural reforms.' It estimates the Asian financial crisis led to a 0.3 per cent contraction in gross domestic product in developing countries last year, rising to 2.7 per cent this year, 1 per cent next year and 1.6 per cent in 2000. Within Asia, it sees an 18 per cent GDP contraction in Indonesia, 8.1 per cent in Korea and 13.6 per cent in Thailand.