When we consider the evolution of the Indo-Pacific region, much less attention is paid to the impact of smaller countries such as Japan (25 times smaller than China
With the recent release of the Perth USAsia Centre’s Special Report Implementing the Indo-Pacific – Japan’s region building initiatives
, it’s an ideal opportunity to analyse the significant role Japan has played in building the Indo Pacific region since the 1970’s.
1. Foreign aid
Japan was a top provider of foreign aid in the region, and the largest donor in the world from 1989-2002. Based on data provided through the Organisation for Economic Cooperation and Development, nearly 70% of Japan’s cumulative official bilateral transactions (not concessional or primarily trade facilitating in their character) goes to Asia, totalling USD 194 billion.
2. Largest Foreign Lender
Since mid-2015, Japanese banks have laid the foundation for continued economic growth as the largest foreign lender in Asia
. According to the Asian Review
, Japan has played a significant role post financial crisis, filling the void left by retreating Western lenders.
3. China’s Supporter
China was the largest recipient of Japan’s foreign aid between 1978 and 2010. Through its foreign aid, Japan has significantly contributed to China’s development and eventual rise. Trade between the two countries is also at a healthy level, despite political tension. The total amount of Japan’s trade with China last year was US $353.7 billion, a 7.4% increase from the previous year.
4. Support for Stabilisation
Japan has supported stabilising institutions and intergovernmental organisations such as the Association of Southeast Asian Nations (ASEAN) since the 1970’s. Japan has remained committed to informing the international community about the importance of maintaining existing global rules and norms. An example is their delivery of international conferences such as G-7 to ensure peaceful resolution of territorial disputes and non-unilateral actions in the South China Sea.
5. Pro Infrastructure
According to the South China Morning Post
, Japan still leads the way in the Southeast Asia infrastructure race, despite China’s increasing investment in belt and road investments. Japanese-backed projects across the region’s six largest economies – Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, valued at US$367 billion, compared to China’s US$255 billion.
6. Leading the way in Security
Japan contributes to regional security by participating in joint military exercises. The number of exercises it has participated in between 2015 and 2018 with the USA (60), Australia (32), India (12), and China (9). Japan Self-Defense Forces have also been invited to visit the Philippines and Vietnam, and the Minister of Defense has expanded programs of assistance to these countries to help them shore up and expand their coastal defences.
7. Paving the way for Global Connections
Building on Japan’s Expanded Partnership for Quality Infrastructure (EPQI) and India’s Act East Policy (AEP), the proposal for the Asia Africa Growth Corridor (AAGC) was developed and designed to integrate the Indo-Pacific region with growing economies in East Africa. The AAGC involves development and cooperation projects, infrastructure and institutional connectivity, building capacities and skills and enhancing people-to-people contacts.
8. Overseas investment extends to Japanese businesses
The Inpex Ichthys project represents the largest investment in Australia by a Japanese company, and the country’s largest-ever overseas investment
, valued at US$34 billion. For Australia’s neighbour, Indonesia, the different stages of Japanese economic rationalisation have been well aligned with every phase of the country’s political transformation and economic reform.