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Declining Japan’s Role in ASEAN for a New Cooperation Strategy

Date:
25 September 2024
Category:
News
Topics:
Economic

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Jakarta, 25 September 2024: The Foreign Policy Community of Indonesia (FPCI) and the National Graduate Institute for Policy Studies (GRIPS) hosted a virtual forum titled ‘Connecting, Collaborating, and Co-Creating: The Future of ASEAN–Japan Economic Cooperation’ on 25 September 2024. The forum featured prominent speakers, including Prof. Tetsuya Watanabe, President of ERIA; Dr Lili Yan Ing, Senior Economist at ERIA; and Dr Alexander Chandra, Assistant Director at the ASEAN Secretariat. The event was opened by Prof. Kunihiko Shinoda, Executive Advisor at GRIPS, who underscored the growing importance of ASEAN–Japan collaboration. The discussion was moderated by Associate Prof. Kei Koga from the Public Policy and Global Affairs Programme at Nanyang Technological University.

During the forum, Dr Chandra introduced the newly launched ASEANJapan Economic Co-Creation Vision, explaining that ‘co-creation’ represents a mutually beneficial partnership aimed at addressing shared socioeconomic challenges through trust and collaboration. He stressed the importance of ASEAN and Japan working together to overcome these challenges while respecting the diverse nature of ASEAN Member States. President Watanabe highlighted the economic importance of ASEAN, citing its 5% GDP growth and youthful demographic, which make the region a prime destination for global investment. He emphasised that co-creation is especially crucial in tackling sustainability issues and driving energy transitions, areas where Japan’s advanced technological capabilities could be pivotal.

As the ASEAN-Japan Strategic Economic Cooperation Roadmap (2016–2025) approaches its final phase, Dr Ing provided a critical assessment of its progress. She noted a significant decline in Japan's economic role within ASEAN over the past 2 decades. While Japan was a dominant force in the region during the 1980s and 1990s, its contribution to trade, investment, and infrastructure has diminished significantly in the last 23 years. By 2023, Japan had fallen to ASEAN's fourth-largest trading partner, accounting for only 7% of the region’s total exports and imports. Additionally, its share of foreign direct investment dropped to just 6%. Dr Ing emphasised that the roadmap’s success depends on restoring trust – a crucial component of the ASEAN–Japan relationship.

Dr Ing identified three areas for improvement. First, she urged Japan to increase openness to ASEAN products, particularly semiconductors, coal, and agricultural goods, to enhance bilateral trade. Second, she called for stronger connections between Japanese companies and ASEAN’s workforce, highlighting the need for more openness in recruiting skilled workers and fostering people-to-people ties – a point echoed by President Watanabe. Third, Dr Ing advocated for a shift in Japan's investment priorities from physical to digital and soft infrastructure. She stressed that advancements in industrial robotics, artificial intelligence, and digital platforms are essential for ASEAN’s future growth. Addressing these areas, she argued, would help establish a more resilient and prosperous ASEAN–Japan partnership.

In her closing remarks, Dr Ing emphasised the importance of cooperation over conflict and encouraged both ASEAN and Japan to create environments that foster growth. She called on the next generation to embrace their roles as the future leaders of both regions, reminding them that collaboration is the key to shared prosperity.

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