Japan’s Engagement with ASEAN: Economic Dimension - Part I

Introduction

There are certain issues evolving in the Indo-Pacific region that are driving Japan to be drawn closer to the countries of the ASEAN grouping. The most striking example of the driver that pulls both Japan and the ASEAN closer stems probably from China’s policies, which are perceived by most small Asian states as belligerent and expansionist. South China Sea and the Taiwan Straits are often cited as the flashpoints which could trigger a regional conflict as certain international rules and norms are being violated by a single power. Against this background this article makes an attempt to examine and analyse how Japan and the ASEAN are reaching out to each other and the outcome thereof.

A brief flashback to the happenings in the past Japan-ASEAN relations may be useful to put the current Japan-ASEAN ties in context. It is well known that Japan’s military adventure during the World War II in some Southeast Asian countries, before the ASEAN was born, is a dark chapter of history. This has been successfully overcome by constructive engagement during the post-War years. A devastated Japan remerged from the ruins of the War as assiduous economic planning and hard work and brought a dramatic turnout in quick time. Focussing on labour-intensive industries, the architect of this economic planning Saburo Okita’s role in and plan of doubling income within a certain target but achieved before that is a matter of economic folklore in academic economic research.

When Japan soon graduated from labour-intensive industries and moved to higher and sophisticated level of specialisation in knowledge-intensive sectors of industrial production, the labour intensive industries were relocated to overseas bases such as in South Korea, Hong Kong, Singapore and Taiwan, thus leading to the emergence of the Four Tiger economies. The rest of the Southeast Asian countries soon caught up with this economic race in the flying geese pattern of industrial production with Japan as the leader and the small Asian nations catching up. All these developments took place without any violation of any global laws and contributed to immense mutual benefits to all nations that were partners in the process. This happy process is now being challenged by a single power which tries to monopolise all factors that helped accrue economic dividends shared by many Asian countries in a cordial environment. This brief background shall be helpful how Japan and the members of the ASEAN bloc are navigating to retain the space that benefited these nations in the past and is being disrupted now.

Three recent important developments are worth-examining in this context. First is the six-day visit of Japan’s Foreign Minister Yoko Kamikawa to four ASEAN bloc states – Brunei, Vietnam, Laos and Thailand from 8 October 2023. Second was the visit of Commander of the Cambodian Army Hun Manet (designated to be the successor of Prime Minister Hun Sen) in February 2022 at the invitation of Japan’s Defense Ministry during which he had extensive talks with Prime Minister Fumio Kishida, Japanese Foreign Minister Hayashi Yoshimasa and Defence Minster Nobuo Kishi. The third and most important of the three visits was Prime Minister Fumio Kishida’s visit to Philippines and Malaysia from 3 to 5 November 2023. These visits prepare the stage when Japan hosts the 26th Japan-ASEAN summit in Tokyo on 16-18 December 2023. These important developments are being examined in this two parts analysis. While Part I shall examine what transpired during these visits, part II shall look into how and why Japan finds compelling reasons to build a web of security network with the ASEAN bloc.

During his visit, Kishida held meetings with the leaders of Philippines and Malaysia and discussed a wide range of agenda items such as bilateral, regional and international issues. Through the visit, Kishida confirmed cooperation in maintaining and strengthening a free and open international order based on the rule of law as well as in ensuring a world where human dignity is protected. He also confirmed collaboration for the Commemorative Summit for the 50th Year of ASEAN-Japan Friendship and Cooperation on 18 December in Tokyo.^[1]

Kamikawa’s Four-nation Visit

The primary objective of Kamikawa’s six day four-nation visit to the ASEAN region was to promote security and economic ties with the ASEAN members amid China’s growing regional assertiveness. During her trip, she affirmed Japan’s continued collaboration with ASEAN counterparts to uphold and reinforce the free and open international order based on the rule of law. As was expected, her visit was to prepare for the successful conclusion of the commemoration of a special summit aimed to commemorate the 50th anniversary of the friendship between Japan and the 10-member ASEAN grouping in December in Tokyo.^[2]

It may be recalled that Kamikawa took over the post of Japan’s Foreign Minister from Yoshimasa Hayashi in a Cabinet reshuffle on 13 September. This was her second overseas trip as Japan’s Foreign Minister, following a visit to New York in September to attend the UN General Assembly^[3] and was intended to demonstrate Japan’s attention to Global South developing countries. While in the region, Kamikawa held meetings with Brunei’s Minister of Foreign Affairs Erywan bin Yusof, Vietnamese Minister of Foreign Affairs Bui Thanh Son, Lao Deputy Prime Minister and Minister of Foreign Affairs Saleumxay Kommasith and Deputy Prime Minister and Minister of Foreign Affairs of Thailand Parnpree Bahiddha-nukara.^[4]

What hogged the limelight of Kamikawa’s visit to the ASEAN region was her visit to Vietnam from 10 to 11 October 2023. Earlier Vietnam’s Minister of Foreign Affairs Bui Thanh Son had invited Kamikawa to pay a visit to Vietnam. Japan and Vietnam established bilateral diplomatic ties on 21 September 1973 and during this past 50 years, relations between the two countries have been strengthening and developing in many fields.

Indeed, Japan’s relations with Vietnam are something very special. Since both established diplomatic relations on 21 September 1973, ties between the two countries have strengthened and developed in many fields during this past 50 years. Sharing strategic interests, relations have graduated from a “trusted, long-term stable partnership” (2002) to “towards a strategic partnership for peace and prosperity in Asia (2006) and finally to an “extensive strategic partnership for peace and prosperity in Asia” (2014). Since then, both sides have exchanged high-level delegations and top leaders have met on the sidelines of international and regional conferences, and strengthened mutual trust and understanding.^[5]

When Vietnam’s Prime Minister Pham Minh Chinh's visited Japan to attend the expanded summit of the Group of Seven (G7) in May 2023, it set a new development milestone in the Vietnam-Japan extensive strategic partnership. Japan's invitation for Vietnam to attend the expanded G7 Summit also showed that Japan attaches great importance to cooperation with Vietnam. It may also be recalled that Japan’s Crown Prince and his spouse visited Vietnam and attended a ceremony to mark the 50th anniversary of Japan-Vietnam diplomatic relations on 21 September 2023.

Indeed, Japan considers Vietnam an important and necessary partner in implementing the Japanese plan of “Free and Open Indo-Pacific (FOIP). Both sides have maintained dialogue mechanisms such as the Vietnam-Japan Cooperation Committee co-chaired by the two Foreign Ministers since 2007, the Vietnam-Japan Strategic Partnership Dialogue on Diplomacy, Security and Defence at Deputy Foreign Minister level since 2012, the Security Dialogue at Deputy Minister level since 2013, the Joint Committee on Trade, Energy and Industry since 2014, the Ministerial level Agriculture Dialogue since 2014, and the Vietnam-Japan Maritime Policy Dialogue at ministerial level since December 2019.

As regards economic relations between Japan and Vietnam, Japan is currently one of Vietnam’s most important economic partners and the first G-7 country to recognise Vietnam’s market economy status. Bilateral trade turnover has increased steadily over the years and reached $40 billion in 2020, $42.7 billion in 2021, and $47.6 billion in 2022. In the first eight months of 2023, the trade turnover neared $29.16 billion. In investment sector, Japan is the third largest provider of foreign direct investment (FDI) in Vietnam after South Korea and Singapore with 5,168 valid FDI projects with a total registered investment capital of more than $71.02 billion as of August 2023. Vietnam has also 106 investment projects in Japan with a total registered investment capital of about $19.5 million.

Japan is also the largest ODA provider to Vietnam, accounting for about 30% of the total capital of foreign donors for Vietnam, with $29.3 billion, of which non-refundable aid is $1.8 billion. Both have also strengthened cooperation in other areas such as in the field of agriculture, climate change responses, culture, education and training, health care, and tourism. With many tourist sites, Vietnam has put extra efforts to make such destinations attractive to develop the tourism industry. While about 1 million Japanese tourists visit Vietnam annually, about half a million Vietnamese people live, work and study in 47 prefectures and cities in Japan.

Agreement Reached at Jakarta

In early September 2023, Japan and ASEAN upgraded their relationship to a “comprehensive strategic partnership” to deepen cooperation in areas of common interest, such as maritime security, when Kishida and leaders of the region had gathered in Jakarta.

While at Jakarta, which was hosting the 43rd ASEAN Summit and related meetings, Kishida had outlined six areas under the Japan-ASEAN Comprehensive Connective Initiative under which Japan intends to strengthen cooperation with the Southeast Asian countries. The first area of cooperation identified was Transportation Infrastructure Development aimed to facilitate the flow of people and goods among ASEAN countries by developing ports, roads, railroads and airports. Japan has already provided $19 billion towards transport projects in ASEAN. Japan has also been promoting soft infrastructure cooperation through technical cooperation and by providing Japanese technology and knowledge to ASEAN member states. The second area identified was “digital Connectivity”, under which Japan shall help in enhancing digitalisation and strengthening regional connectivity by utilising digital technology as well as contributing to cyberspace security.^[6]

The third area for cooperation was “maritime Cooperation”. Under this programme, Japan agreed to assist members in promoting their maritime law enforcement capacity through training programmes and grant of patrol vessels for the coast guard agencies and maritime police. The fourth area of cooperation was “Supply Chain Resilience”, under which Japan agreed to contribute to supply chain resilience in the ASEAN region, and build economies that can withstand a crisis together as ensuring stable distribution of goods and food security have become important issues amidst global headwinds.

“Electricity Connectivity” was the fifth area of cooperation that Kishida identified at Jakarta. Kishida realised that the ASEAN region was experiencing rapid economic development, which meant demand form electric power was growing. To help ameliorate these lacunae, Kishida promised to ensure stable electric power supply through the formulation of master plans and training programmes. The last area of cooperation described by Kishida as foundation for development was “Human and Knowledge Connectivity”, under which Japan agreed to foster human resources in ASEAN countries through conducting personnel exchanges and training programmes in a wide range of fields, as well as strengthen the network of people in Japan and ASEAN countries. Under this, Japan agreed to provide capacity building projects for 5,000 individuals over the next three years. Through these initiatives, Kishida unveiled his new vision for the general direction of ASEAN-Japan relations and cooperation in the coming years.^[7]

Japan-ASEAN Commemorative Summit in Tokyo in December

As Japan and ASEAN celebrate the 50th years of friendship and cooperation, Japan shall be hosting a commemorative summit meeting in Tokyo from 16 to 18 December 2023 to review the past and define the future direction of relations. Cambodian Prime Minister Hun Manet was the first leader of the bloc to confirm his attendance and is also expected to have a bilateral meeting with his Japanese counterpart Fumio Kishida. The confirmation came following a phone talk between Cambodian Foreign Minister Sok Chenda with his Japanese counterpart Kamikawa Yoko on 30 October. Manet is likely to seek support from Japan for Cambodia’s long-term development.

Since the two countries established diplomatic relations 70 years ago, Japan has remained engaged economically with Cambodia despite Cambodia’s alleged leaning towards China. Following years of civil war when Cambodia finally held the general elections in 1993, Japan played a crucial role in Cambodia’s economic reconstruction and the enhancement of its democracy. Since then Japanese investors, technicians and government support have been visible in Cambodia. Japanese assistance in reviving drainage systems, roads and transport in particular are noteworthy.^[8] On the security front too, Japan has furnished the Cambodian military with technical and training assistance. Many more contemporary issues confronting the region are also expected to be discussed.

References

^[1] https://www.mofa.go.jp/s_sa/sea2/page1e_000792.html
^[2]“Japan’s top diplomat to visit, promote ties with ASEAN states”, 6 October 2023, https://english.kyodonews.net/news/2023/10/b60764fec514-japans-top-diplomat-to-visit-promote-ties-with-4-asean-states.html; [3] https://www.nippon.com/en/news/yjj2023100600632/ [4]
^[3] “Japan foreign minister to visit 4 Southeast Asian nations from Oct.8”, 30 September 2023, https://english.kyodonews.net/news/2023/09/e2d45f496952-japan-foreign-minister-to-visit-4-southeast-asian-nations-from-oct-8.html [5]
^[4]“Japan’s Foreign Minister plans trip to ASEAN”, 6 October 2023, https://en.vietnamplus.vn/japan-foreign-minister-plans-trip-to-asean/269209.vnp [6]
^[5]Nguyen Kim, “Japanese Foreign Minister to visit Vietnam from October 10-11 (2023, 6 October 2023, https://en.baoquocte.vn/japanese-foreign-minister-to-visit-vietnam-from-oct-10-11-245071.html [7]
^[6]“Japan to Strengthen Cooperation, Connectivity with ASEAN”, 7 September 2023, https://en.vietnamplus.vn/japan-to-strengthen-cooperation-connectivity-with-asean/267515.vnp [8]
^[7]Ibid.
^[8]Kim Yuthro, “PM set for ASEAN-Japan Summit”, 1 November 2023, https://www.phnompenhpost.com/national-politics/pm-set-asean-japan-summit [9]

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