Page 2 of 3 Japan revs up its Indochina
diplomacy By Hisane Masaki
as the grouping accelerates its
economic integration with an ultimate goal of
creating a fully integrated ASEAN Economic
Community by 2015. Per capita income of Myanmar,
for example, is less than one-hundredth of that of
Singapore. The Mekong River's development is
widely believed to hold the key to the development
of war-battered Indochina as a whole.
In
the early 1990s, after years of civil war ended in
Cambodia, Japan took the leadership role in
efforts to develop the Mekong
region, backed by its huge aid
money, and secured a strong influence in the
region. Japan also hosted an international peace
conference for Cambodia in June 1990. It was the
first time since the end of World War II that
Japan had hosted an international conference to
discuss peace in a third country. The warring
factions in Cambodia signed a peace agreement in
Paris in October the following year.
In
1992, Japan enacted a historic law enabling its
Self-Defense Forces to participate in United
Nations-sponsored peacekeeping operations abroad.
Under the law, SDF troops were dispatched to join
UN peacekeeping efforts in Cambodia prior to the
country's first postwar election in the spring of
1993. It marked the first overseas mission for SDF
troops. Sending troops abroad had previously been
a taboo in Japan because of the country's
war-renouncing, post-World War II constitution.
With the turn of the millennium, however,
China began to turn the tables on Japan, while
Japan rested on its laurels. China has
aggressively cozied up to individual ASEAN
members, including in Indochina, as well as ASEAN
as a whole in recent years. A greater commitment
to the development of the Mekong region is part of
such efforts. Unlike Vietnam, which has a
relatively large economy, Cambodia, Laos and
Myanmar have been heavily reliant on Thailand for
economic growth. But Thailand's influence in
Indochina has been eroded since the 1997-98 Asian
economic crisis, and China has filled the gap.
Among other initiatives, China hosted the
second summit of the Asian Development Bank
(ADB)-sponsored Greater Mekong Subregion (GMS)
Economic Cooperation program in Kunming, capital
of China's Yunnan province, in July 2005. The GMS
has Cambodia, Laos, Myanmar, Vietnam, Thailand and
China as full members.
China has also
offered financial and other assistance programs
for the development of the GMS, has forgiven more
than $1 billion in debts owed by Cambodia to
China, and has expanded preferential tariffs for
imports from Cambodia, Laos and Myanmar. China has
set up a special fund totaling $20 million within
the ADB for poverty alleviation of the region.
China has also provided military as well as
economic aid to Myanmar in defiance of
international criticism of that military-ruled
country.
It would be fair to note, though,
that China has attached a particular importance to
the development of the Mekong region, primarily
for domestic reasons. China hopes to turn the
poorer western part of the vast country into a
magnet for domestic and foreign investors and
thereby to correct the widening gap in wealth with
the flourishing eastern coastal areas, an issue
that could threaten the country's political
stability and even the rule of the Chinese
Communist Party.
Japan has funded
infrastructure projects transcending national
borders in Indochina on its own or in partnership
with the ADB. China has also stepped up financial
assistance for the development of that region,
flexing its rapidly growing economic muscles.
Two big highway projects crisscrossing
Indochina are seen by many as a symbol of the
intensifying race for regional influence between
Japan and China. One is the East-West Corridor
project, led by Japan, to build a major highway,
including the Second Mekong Friendship Bridge over
the river, to link the port of Da Nang in central
Vietnam, Savannakhet in southern Laos, Mukdahan in
northeastern Thailand and then Mawlamyine in
southern Myanmar. This project was almost
completed at the end of last year.
The
other is the North-South Corridor project, led by
China, to build a highway linking Kunming and
Bangkok via Laos. This project is expected to be
completed by the end of next year. Japan balked at
funding the Chinese-led project, partly for fear
of lending China a hand to increase its influence
southward in Indochina.
Apparently alarmed
by China's rapidly growing political as well as
economic influence, then-prime minister Junichiro
Koizumi of Japan held talks with his counterparts
from the CLV nations in Vientiane, the capital of
Laos, in November 2004 for the first ever
Japan-CLV summit. The second Japan-CLV summit was
held in December 2005 in Kuala Lumpur.
At
a foreign ministerial meeting between Japan and
the CLV nations in the Philippines in January,
Tokyo conveyed to the CLV nations its plan to host
a ministerial meeting of Japan and five countries
in the Mekong region, including the CLV nations,
during fiscal 2007, which started in April, to
discuss further cooperation for the region's
development. In their talks last week, Abe also
explained to Bouasone Japan's decision to make the
Mekong region a priority target area for its
economic assistance and expand aid for Laos and
other regional countries over the next three
years.
China remains by far the most
powerful magnet for Japanese and other foreign
investors in Asia. But Japanese companies have
been on an investment spree in Vietnam as well in
the past couple of years. Vietnam's economic size
and population pale before China's. But the nation
has even cheaper labor. Vietnam has become an
increasingly popular investment destination for
Japanese firms seeking to reduce their excessive
dependence on China and spread their business
risks in Asia.
The investment pact between
Japan and Vietnam took effect in late 2004. Japan
and Vietnam also kicked off FTA negotiations in
January, separately from FTA negotiations between
Japan and the entire ASEAN. Vietnam was also
admitted to the WTO in January. WTO membership,
which obliges Vietnam to open its markets wider to
foreign competition and make its trade and
investment rules and regulations fully compatible
with international norms, is expected to fuel
Japanese and other foreign investment in the
country.
Meanwhile, Japan and Cambodia are
expected to sign an investment treaty next month,
and a similar pact between Japan and Laos is also
in the works. Investment treaties, coupled with
the full opening of the East-West and North-South
corridors to traffic, might give a boost to
Japanese investment in Laos and Cambodia as well
as Vietnam.
In his talks with Abe last
week, Bouasone expressed "his strong wish and
commitment to develop special economic zones in
other areas besides Savannakhet to make full use
of the Second Mekong Friendship Bridge and
highways under the East-West Economic Corridor
framework", according to their joint press
statement. Many Japanese-funded companies in
Thailand are becoming more interested in investing
in neighboring Laos to take advantage of the
closeness between the Thai and Lao languages -
many Lao people can speak or read Thai - as well
as much cheaper labor in Laos.
Meanwhile,
with the construction of infrastructure such as
roads and bridges and simplification of customs
procedures progressing between China and Vietnam
as well as within Indochina, international
forwarders have begun to move to establish land
transportation networks linking China and
Southeast Asia. TNT of the Netherlands, for
example, is preparing to complete a
4,000-kilometer-long truck transportation network
from Singapore to
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