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Japan Relations with Other Asia-Pacific Countries
Japan's rapid rise as the dominant economic power in
Asia in
the 1980s helped to define Japanese policy toward this
diverse
region, stretching from South Asia to the islands in the
South
Pacific Ocean. The decline in East-West and Sino-Soviet
tensions
during the 1980s suggested that economic rather than
military power
would determine regional leadership. During the decade,
Japan
displaced the United States as the largest provider of new
business
investment and economic aid in the region, although the
United
States market remained a major source of Asia-Pacific
dynamism.
Especially following the rise in value of the yen relative
to the
dollar in the late-1980s, Japan's role as a capital and
technology
exporter and as an increasingly significant importer of
Asian
manufactured goods made it the core economy of the
Asia-Pacific
region.
From the mid-1950s to the late 1960s, Japan's relations
with
the rest of Asia were concerned mainly with promoting its
far-flung, multiplying economic interests in the region
through
trade, technical assistance, and aid. Its main problems
were the
economic weakness and political instability of its trading
partners
and the growing apprehension of Asian leaders over Japan's
"overpresence" in their region.
Japan began to normalize relations with its neighbors
during
the 1950s after a series of intermittent negotiations,
which led to
the payment of war reparations to Burma, Indonesia, the
Philippines, and the Republic of Vietnam (South Vietnam).
Thailand's reparations claims were not settled until 1963.
Japan's
reintegration into the Asian scene was also facilitated by
its
having joined the Colombo Plan for Cooperative Economic
and Social
Development in Asia and the Pacific in December 1954 and
by its
attendance at the April 1955 Afro-Asian Conference in
Bandung,
Indonesia. In the late 1950s, Japan made a limited
beginning in its
aid program. In 1958 it extended the equivalent of US$50
million in
credits to India, the first Japanese loan of its kind in
post-World
War II years. As in subsequent cases involving India, as
well as
Sri Lanka, Malaysia, Taiwan, Pakistan, and South Korea,
these
credits were rigidly bound to projects that promoted plant
and
equipment purchases from Japan. In 1960 Japan officially
established the Institute of Asian Economic Affairs
(renamed the
Institute of Developing Economies in 1969) as the
principal
training center for its specialists in economic diplomacy.
In the early 1960s, the government adopted a more
forward
posture in seeking to establish contacts in Asia. In 1960
the
Institute of Asian Economic Affairs was placed under the
jurisdiction of the Ministry of International Trade and
Industry
(MITI). In 1961 the government established the Overseas
Economic
Cooperation Fund as a new lending agency. The following
year the
Overseas Technical Cooperation Agency made its debut.
By the mid-1960s, Japan's role had become highly
visible in
Asia as well as elsewhere in the world. In 1966 Japan
became a full
member of the Organisation for Economic Co-operation and
Development
(OECD--see Glossary).
As economic and trade
expansion
burgeoned, leaders began to question the propriety and
wisdom of
what they variously described as "mere economism," an
"export-first
policy," and the "commercial motives of aid." They wanted
to
contribute more to the solution of the North-South
problem, as they
dubbed the issue--the tenuous relationship between the
developed
countries and the developing countries.
Efforts since the beginning of the 1970s to assume a
leading
role in promoting peace and stability in Asia, especially
Southeast
Asia, by providing economic aid and by offering to serve
as a
mediator in disputes, faced two constraints. Externally,
there was
fear in parts of Asia that Japan's systematic economic
penetration
into the region would eventually lead to something akin to
its
pre-World War II scheme to exploit Asian markets and
materials.
Internally, foreign policymakers were apprehensive that
Japan's
political involvement in the area in whatever capacity
would almost
certainly precipitate an anti-Japanese backlash and
adversely
affect its economic position.
After a reassessment of policy, the Japanese leadership
appeared to have decided that more emphasis ought to be
given to
helping the developing countries of the region modernize
their
industrial bases to increase their self-reliance and
economic
resilience. In the late 1970s, Japan seemed to have
decided that
bilateral aid in the form of yen credits, tariff
reductions, larger
quota incentives for manufactured exports, and investments
in
processing industries, energy, agriculture, and education
would be
the focus of its aid programs in Asia.
By 1990 Japan's interaction with the vast majority of
AsiaPacific countries, especially its burgeoning economic
exchanges,
was multifaceted and increasingly important to the
recipient
countries. The developing countries of ASEAN (Brunei,
Indonesia,
Malaysia, the Philippines, and Thailand; Singapore was
treated as
a newly industrialized economy, or NIE) regarded Japan as
critical
to their development. Japan's aid to the ASEAN countries
totaled
US$1.9 billion in Japanese fiscal year
(FY--see Glossary)
1988
versus about US$333 million for the United States during
United
States FY 1988. Japan was the number one foreign investor
in the
ASEAN countries, with cumulative investment as of March
1989 of
about US$14.5 billion, more than twice that of the United
States.
Japan's share of total foreign investment in ASEAN
countries in the
same period ranged from 70 to 80 percent in Thailand to 20
percent
in Indonesia.
In the early 1990s, the Japanese government was making
a
concerted effort to enhance its diplomatic stature,
especially in
Asia. Kaifu's much publicized spring 1991 tour of five
Southeast
Asian nations--Malaysia, Brunei, Thailand, Singapore, and
the
Philippines--culminated in a May 3 major foreign policy
address in
Singapore, in which he called for a new partnership with
the
Association of Southeast Asian Nations (ASEAN) and pledged
that
Japan would go beyond the purely economic sphere to seek
an
"appropriate role in the political sphere as a nation of
peace." As
evidence of this new role, Japan took an active part in
promoting
negotiations to resolve the Cambodian conflict.
Data as of January 1994
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