Japan’s Strategy in the Mekong Region

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Mekong region leaders and Japan’s Prime Minister link hands at a recent summit. Reuters

Concerted actions and tangible achievements over the past 10 years of the Mekong-Japan Cooperation have significantly contributed to the transformation of the Mekong region to be one of the global growth centers.

Japan’s commitment to promote quality growth-both hard and soft infrastructure connectivity- further boosts economic potentials of the region and narrows the development gap within Asean. Such effort has been consistently hailed by the Mekong countries.

Every three years, Japan hosts the Mekong-Japan Summit in Tokyo where major strategy is announced.

Last year, Japan hosted the 10th Mekong-Japan Summit Meeting unleashing the “Tokyo Strategy 2018 for Mekong-Japan Cooperation” focusing on three pillars namely (1) the vibrant and effective connectivity, (2) people-centered society, and (3) the realization of a Green Mekong. Leaders of the Mekong countries and Japan also decided to elevate their cooperation to a strategic partnership.

All the above three pillars are being pursued in coordination with the three concrete targets of realizing SDGs, realizing a Free and Open Indo-Pacific (FOIP), and building synergies with the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS).

Unlike the “New Tokyo Strategy 2015” in which Japan committed around 750 billion Yen (about 6,821 million US$) in ODA to the Mekong region for three years (2016-2018), the “Tokyo Strategy 2018” did not provide specific financial pledge.

It is worth noting that financial pledge for the Mekong-Japan Cooperation is not an exclusive or standalone package but rather a combination of all Japanese assistance to the region. In the list of projects, there is no clear distinction between bilateral projects, Mekong sub-regional projects, or other multilateral projects.

Japan’s interest in pursuing the Mekong-Japan Cooperation has both strategic and economic implications.

In term of strategic interest, Tokyo has utilized this framework to boost its own version of Free and Open Indo-Pacific Strategy, which generally aims to create a strategic equilibrium in the Indo-Pacific.

Prime Minister Hun Sen was the first leader from Southeast Asia who explicitly expressed support to Japan’s FOIP. Cambodia welcomes Japan’s commitment under FOIP to ensure peace, stability, prosperity and enhanced connectivity in the region.

Japan is interested in promoting a free and open maritime order based on the rule of law for the Indo-Pacific region, which extends from the Asia-Pacific through the Indian Ocean to the Middle East and Africa. This geographical scope is relatively larger than that of other countries’ definition of the Indo-Pacific region.

From the economic dimension, Mekong-Japan Cooperation is a tool to support synergy between government and private sector in fostering Japan’s presence in the region.

Japan’s private sector has invested more than 2 trillion yen (about 18,190 million US$) in the region from 2015-2018. Tokyo has increased its usage of Official Development Assistance (ODA) to leverage more private-sector investment in the region. Such trend is warmly welcomed by the region as Japan’s investment tends to focus on manufacturing, which is a long-term investment that can offer sustainable income generation, skill development and technology transfer for local people, and with environmentally consideration.

It also bodes well with the business strategy of Japanese enterprises which tend to consider the Mekong region, not as a specific country-to-country investment, but rather as a region-wide production and supply chains that can diversify risks and maximize utilization of different comparative advantages and incentives that each Mekong country can offer.

Cambodia’s interest in participating in the Mekong-Japan Cooperation is largely driven by the vision to enhance shared peace and prosperity, promote economic development and poverty reduction, and leverage the Mekong region to be one of the global growth centers.

Sustainable peace and development are the core collective interests of all the Mekong countries, which were, except for Thailand, post-conflict nations. Peace, economic integration and development are generally regarded as the foundations of democratic governance.

On top of the hard and soft connectivity, Cambodia has drawn attention to the importance of the “industry connectivity” which was laid out in the Tokyo Strategy 2018.

With the completion of the Tsubasa Bridge, part of Mekong connectivity project, the traffic volume on National Road No.1 increased from 5,000 vehicles per day in 2009 to 11,000 vehicles per day in 2016.

The Cambodian government regards Japan as one of the key strategic and economic partners in its diversification and hedging strategy. Japan is regarded as a benign power and sincere partner. Japan has won the heart of Cambodian people. Heart-to-heart relations between the two peoples is the backbone of the long-term bilateral strategic partnership.

In Cambodia, Japanese enterprises have already started to take advantages of the enhanced hard and soft infrastructure connectivity under the current “Thailand+1” modality, whereby major Japanese factories in Thailand outsource downstream production chains to Cambodia to supply parts and components to the main factories in Thailand. It is expected that such trend will be replicated under the “Vietnam+1” in the near future.

Cambodia has also encouraged Japan to invest in digital economy in the Mekong region. Cambodia sees the need to institutionally equip the region with platforms to support e-commerce and other innovations to catch up with the fast-evolving Fourth Industrial Revolution.

It is also worth noting that Japan provides more opportunities for the Mekong people to learn know-hows and technologies in Japan. According to the Ministry of Labour and Vocational Training, some 9,000 Cambodian workers are currently employed in Japan. Once the training is completed, these technical trainees will become important assets for their home country in addressing the shortage of middle-management and skilled labor. The Mekong-Japan Cooperation could enhance the welfare of those trainees while in Japan and support their re-integration in order to contribute to further industrialise and develop the region.

Sim Vireak is Strategic Advisor of the Asian Vision Institute (AVI).

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