I had expected — at least, right up until Feb. 23, that is — that this “Future of Asia” conference would once again see lively discussions about the bright future and prosperity of Asia.
The world is now witnessing unbelievable aggression by an authoritarian state that is trampling on international law and humanity. We are shocked at the sudden collapse of the peace and order upon which all activities are premised.
As we stand eye-to-eye with this new reality, what kind of future for Asia should we envision in response to the shaking of the international order? At a time when the world as a whole is at a historical crossroads, leaders of countries and sectors of society must, more than ever before, engage in candid discussions and take action.
This “Future of Asia” conference is a valuable opportunity for such unreserved discussions. Today, I would like to explain my views on how Japan should approach this turbulent world and my thoughts on the future of Asia.
First I will discuss my basic approach in confronting the turbulent world.
In light of circumstances constantly changing, the challenges we face are many and varied: responding to unilateral, coercive actions by authoritarian states and reinforcing G-7 unity; ways of enhancing the security and resilience of the supply chain for semiconductors and other items; balancing climate change issues and energy security; incorporating digital regulations into regional economic partnerships.
I regard the current international situation as having three layers. The first layer is diplomatic and security issues about which decisions and actions are made on a country-by-country basis. The second layer is trade and investment and the rules governing digital transactions, in which companies operating across borders play a major role. The third layer is the challenge of solving global issues such as infectious diseases and climate change, which are global in scale and common to all humankind. We will respond to these three overlapping layers by clarifying priorities among them.
Diplomatic and security issues
Our highest priority is the first layer. We will respond firmly to risks that run contrary to the foundations of the international order and universal values such as freedom and human rights. It is based on these priorities that we are shifting our conventional policy toward Russia and strengthening our unity with the G-7, bracing ourselves for the long-term costs of sanctions.
This issue is not a question of, “Do we side with the United States or with China?” but rather, “Do we protect universal values and the peaceful world order, or lose them?” I will continue to seek understanding and cooperation from Asian leaders on this matter.
Trade and investment and rules governing digital transactions
For the second layer, we need to take an assortment of webs of rules, such as the rules of the CPTPP, RCEP, bilateral FTAs, and APEC, and accumulate them, overlaying one right atop of the other, and then another and yet another.
The Indo-Pacific Economic Framework for Prosperity, or “IPEF,” newly established this week, is one of those. The IPEF is of great strategic significance as it reaffirms the economic engagement of the U.S. with the Indo-Pacific region even after its withdrawal from the TPP. The IPEF is an ambitious initiative that aims to address 21st century issues ranging from digital and supply chain issues through decarbonization and more, making use of a combination of rule-making, human resource cooperation, and infrastructure support.
To ensure that the IPEF becomes an inclusive and sustainable growth platform in the region, Japan will make its greatest possible contribution while serving as a bridge between the U.S. and Asian countries. Meanwhile, we will continue to persistently push for the return of the U.S. to the TPP, which establishes high standard, 21st century-style rules and boldly liberalizes markets.
The TPP, which may be accompanied by the liberalization of the huge market of the U.S., and the RCEP, incorporating the liberalization of the enormous market of China, should coexist in a well-balanced manner on the Asian stage.
Challenge of solving global issues
For the third layer — the challenge of solving global issues — I believe we should actively promote cooperation with countries that have the will and the technologies to resolve global issues. I believe that the creation of a cooperative system to address the common challenges of humanity will have the effect of mitigating any confrontation or “decoupling” that might arise at the first layer, the layer of security issues.
Based on these basic ideas, how should we envision the future of Asia? I will address this point next.
A respected predecessor of mine thought and acted seriously about the future of the region in these turbulent times. I am referring to former Prime Minister Ohira Masayoshi, the founder of the Kouchikai, the policy group of the Liberal Democratic Party that I lead.
Forty years ago, against the backdrop of an era in which tensions between the major powers were once again on the rise after the detente had ended, showing his intent to squarely address the tough international situation at hand, he stated, “In order to maintain the fundamental international order, which is undergoing serious challenges, we must actively fulfill our roles and responsibilities appropriate to our country’s international status.”
This is not a matter of posturing. Ohira took action, launching the Pacific Rim Solidarity Initiative. This vision was to “maximize the potential of the Pacific Ocean, not merely for the benefit of Pacific nations, but for the welfare and prosperity of human society as a whole.” This would later come to fruition as APEC.
We now need a new international order originating from Asia, just as Ohira sought to achieve, or even more so. This is because Asia now accounts for around 35% of the world economy and is the fastest growing region in the world. Our actions in Asia will change the world.
The “future of Asia” is no longer just for Asia. I want to make this region a region that brings peace and sustainable prosperity to the world.
To this end, my vision is that the Indo-Pacific in the post-Cold War and post-COVID-19 period should be a free and open region, a sustainable and vigorously growing region, and a region that contributes to solving global problems.
Japan will fulfill its own role and responsibility by actively contributing to the creation of the region’s future together with its Asian peers, and by acting as a bridge between Asia and the world.
And, when I think about the future of Asia, what I focus on the most is the relationship between Japan and ASEAN.
ASEAN has contributed to the development of the region based on the principles of “unity” and “centrality” while embracing diversity.
The ASEAN Outlook on the Indo-Pacific upholds many principles which are shared in the thinking behind a Free and Open Indo-Pacific.
Japan has consistently upheld these ASEAN principles and walked together with ASEAN as a good friend and a “heart to heart partner.”
Next year, ASEAN and Japan will celebrate the 50th anniversary of our friendship and cooperation. We will take this opportunity to raise the Japan-ASEAN relationship to a new stage. To this end, we will work together with the members of ASEAN next year to set out a new direction for the relationship and a new vision for cooperation.
A free and open region
I will explain my vision for the region in detail. First and foremost, it is a free and open region.
“Ukraine might be the East Asia of tomorrow.” Unilateral changes to the status quo by force in Ukraine could happen anywhere in the world.
In order to safeguard the peaceful world order and to achieve sustainable prosperity in the region, “no violation of sovereignty or territorial integrity, nor unilateral change of the status quo by force, shall be tolerated in any region.” This fundamental principle must be observed.
That is why I believe that in this region we should build a free and open order based on the rule of law, not on might.
A sustainable and vigorously growing region
The second part of my vision is that this is a sustainable and vigorously growing region.
I am advocating an economic policy of a “new form of capitalism.” The “new form of capitalism” is an effort to upgrade capitalism to meet the challenge from authoritarian regimes while addressing economic externalities such as rising inequality, climate change, and urban problems.
The key is to view social issues not as obstacles, but to transform them into engines of growth. By attracting public and private investment to areas identified as challenges, we will solve social issues and grow robustly. We will create a sustainable economy by killing two birds with one stone.
I would like to share this way of thinking with the people of Asia as we work together to overcome challenges and evolve Asia into a sustainable and vigorously growing region.
A region that contributes to solving global problems
The third part of my vision for the region is being a region that contributes to solving global problems.
This is the third layer I mentioned earlier. I believe that in the next generation, Asia, as the main engine of global economic growth and a hub of innovation, should actively contribute to solving the world’s problems.
Under this vision, Japan will work on four specific actions.
There are four main goals: 1) to build a free and open international order; 2) to cooperate in safeguarding the peaceful world order; 3) to stimulate cross-border human exchanges; and 4) to strengthen relations to overcome social challenges together.
Free and open international order
The first is the establishment of a free and open international order. Japan will continue to hold high the banner of a “free and open Indo-Pacific” in close cooperation with allies and like-minded countries that respect international law and the principles of the international community and share universal values.
In realizing a “free and open Indo-Pacific,” Japan welcomes the active engagement of the United States in the Indo-Pacific. We are encouraged by President Biden’s commitment to the region reiterated at the recent Japan-U.S. Summit and other occasions.
I confirmed with President Biden that the Japan-U.S. Alliance is one that contributes to peace and stability throughout the Indo-Pacific region, and that our two countries will work together to address the security challenges facing the region.
The Quad, comprising Japan, Australia, India, and the United States, is also important in promoting a free and open Indo-Pacific. Two days ago, we committed ourselves to advancing practical cooperation in a wide range of areas, including addressing COVID-19, infrastructure, and space, to bring benefits to the Indo-Pacific.
Cooperation to protect and preserve the peaceful world order
Our second goal is cooperation to protect the peaceful world order in the region.
We will strategically promote multilateral and multilayered security cooperation, bearing in mind the characteristics of the region, the actual situation and security challenges of each country.
During my recent visit to Southeast Asia, we made progress in concrete efforts, including the signing of a defense equipment and technology transfer agreement with Thailand and a decision to study the feasibility of providing patrol vessels to Indonesia. We will continue to build upon such practical cooperation.
We will broaden our scope to include promoting economic security, addressing cybersecurity, economic coercion and disinformation, and other recent issues facing the region, giving breadth and depth to our cooperation with other countries.
In addition, we will promote cooperation in areas where Japan has strengths, such as maritime security and disaster response. We will also take advantage of the new initiative on maritime domain awareness and the partnership in humanitarian assistance and disaster relief, which was confirmed at the Quad summit meeting.
Stimulation of cross-border movement of people
Third is the revitalization of cross-border movement of people.
The free and active exchange among people is a foundation of our economy and society, as well as the foundation of Asian development.
Strengthening Japan’s border measures was necessary for us to ensure that our medical system was on sound footing and provided time to administer vaccinations. However, from now on we will further relax our border measures.
Specifically, effective June 1, the total number of daily arrivals will be increased to 20,000, and countries with a record of low positive rates at the time of entry will be allowed to enter Japan without border testing for COVID-19.
Furthermore, following the ongoing demonstration project and the establishment of guidelines, we will resume accepting tourists on escorted package tours beginning June 10. At the same time, preparations will be made to resume international flights at New Chitose Airport and Naha Airport by the end of June.
In addition, with regard to countries and regions where infections have settled down, we have today lowered the level of travel advice and warning on infectious diseases for Japanese citizens.
We will continue to monitor the state of infections and, in stages, aim for the same level of accepting inbound passengers as in normal times.
Strengthening economic relations to overcome social challenges together
Fourth, we are strengthening relationships to overcome social challenges together.
Specifically, we will strengthen our relationship with Asia in the five pillars of 1) investment in innovation and startups; 2) strengthening supply chains; 3) investment in infrastructure to connect Asia; 4) realization of universal health coverage; and 5) the Asia Zero Emissions Community.
Investment in innovation and startups
The first pillar is investment in innovation and startups.
The key to solving the various social challenges we face and achieving sustainable, robust growth is the power of innovation.
I see great potential in collaboration between local companies around the region and Japanese companies, learning from each other and fostering innovation.
I am particularly interested in initiatives by startups for cross-border collaborations.
Today, an increasing number of entrepreneurs with strong aspirations to solve social issues are beginning to emerge in Japan and ASEAN, boldly working to balance business and the resolution of social issues on the global stage.
For example, a Japanese startup I recently spoke directly with is working on a project in Thailand in collaboration with a local company to update the shrimp farming industry by analyzing the appetite and growth of shrimp using their unique AI technology and automatically feeding them at the right time.
As another example, a Vietnamese agri-tech venture and a Japanese trading company are cooperating to improve material procurement and cultivation management in Vietnamese agriculture. Also, a Malaysian startup that improves agricultural productivity and remote facility inspections using drones and a Japanese firm are working together to roll out a project globally.
We are working on a program that aims to create more than 100 collaborations between Japanese and ASEAN companies every year by creating matching opportunities for startups by fully utilizing public and private networks, including embassies, JETRO, trading companies, and banks, and by supporting joint demonstrations and research and development with ASEAN companies.
Supply chain resilience
The second pillar is supply chain resilience. Japan and ASEAN have long been building multilayered supply chains. It is important that the public and private sectors continue to invest in maintaining and strengthening these supply chains.
We will also digitally connect the entire supply chain so that the goods and services we provide are stably supplied and it can be shown that they are reliable. It is important to make the supply chain even more resilient through such new ideas.
Japan will support at least 100 supply chain resilience projects over the next five years, and will use the knowledge gained from these projects to develop the infrastructure for supply chain resilience based on new ideas, such as setting common rules to promote cross-border data sharing and collaboration.
Investment in infrastructure to connect Asia
Third is investment in infrastructure, which is expected to continue to be in strong demand.
In order to improve regional connectivity and achieve integrated regional growth, we will continue to strengthen investment in quality infrastructure through ODA and other means. In addition, we will make concrete contributions to the development of soft infrastructure, including investments in people, institutional harmonization, and intellectual property cooperation.
We will work in cooperation with the wider international community, including the G-7, the G-20, and the Quad, and work to build the capacity of borrowers to ensure there is no unfair interference in the policy decisions of borrowing countries or that borrowing countries do not become increasingly destabilized as a result of development finance that fails to adhere to international rules and standards, such as unfair or opaque lending practices.
Achieving universal health coverage
Fourth is the realization of universal health coverage, or UHC. Japan has been leading the way in realizing UHC, even ahead of the COVID-19 situation.
With the spread of COVID-19 and the increased emphasis on equitable access to vaccines and medicines and quality care, the realization of UHC is an extremely important issue in Asia.
This month, it was decided to establish a secretariat for the ASEAN Center for Public Health Emergencies and Emerging Diseases in Thailand. Japan has pledged its full support for its establishment, contributing $50 million.
We will continue to actively contribute to the realization of UHC in Asia under the “Global Health Strategy” that Japan newly announced two days ago.
Asia Zero Emissions Community
Fifth is the realization of an “Asia Zero Emissions Community.”
Like our country, many other Asian countries have set the goal of achieving carbon neutrality and are actively taking on this common challenge for humanity.
The important thing is to decarbonize in a way suitable for the realities of each country, while achieving sustainable economic growth. Of course, the stable supply of energy is a prerequisite.
Energy conditions vary from country to country. In comparison to Europe and Africa, Asia has low potential for renewable energy. In addition, it is estimated that the demand for electricity will increase by 2.5 times over the next 30 years due to growth in the population and the economy. Therefore, we have no choice but to continue to rely to a certain extent on power sources that can be flexibly utilized in response to demand.
The “Asia Zero Emissions Community Initiative” is a framework designed to help Asia decarbonize together while continuing to promote the introduction of renewable energy and energy conservation, and facing the reality of the situation in Asia. It will aim for the joint decarbonization of Asia through 1) promoting the joint demonstration of biomass, hydrogen, ammonia, CCUS, and other technologies for zero emissions in thermal power generation; 2) establish rules for an Asian version of transition finance; 3) establish standards for zero-emission technologies; and 4) utilize emission rights trading in Asia at large.
Japan will contribute to the decarbonization of Asia by fully mobilizing its technologies, experience, and know-how.
In Asia, Japanese companies have already started initiatives such as a demonstration of the construction of a supply chain for hydrogen supply in Singapore, studies on the realization of ammonia co-firing and mono-firing in Indonesia, and the transfer of knowledge and know-how on decarbonization from Japanese cities to Asian cities. In the future, we will expand these efforts to Asia at large.
Regarding this community concept, Indonesia has told us that it would like to join forces with Japan to realize the Asia Zero Emissions Community. Indonesia, together with Japan, would like to play a central role in achieving this goal. Thailand has also responded positively. We would like to join forces with other Asian countries to realize this community.
About a month ago, when I visited Thailand, I visited a “kosen” in Bangkok. Do you know what a “kosen” is? A “kosen” is a unique higher education institution created by Japan to train engineers who can apply their skills.
In Thailand, there is a “kosen” which was established with the support of Japan. When I observed a class at a “kosen,” I was extremely impressed by two Thai students who explained their experiments to me in Japanese, using technical terms such as “oscilloscope” and “natural frequency.”
I could easily imagine a future in which those two students build the future of Thailand and even Asia while holding discussions with Japanese youth.
Japan does not wish for a one-way relationship in which only Japan benefits.
Support for human resource development is an initiative that symbolizes this hope of Japan. As is the case with “kosen,” Japan has long provided support for human resource development in order to cultivate those needs in the countries we support.
As a good neighbor and a good partner, we will work together with you all to pave the way for the future of Asia. That is our aim.
Japan is determined to do its utmost toward this end and actively fulfill its roles and responsibilities.
In closing, I would like to wish all the participants here today good health and continued growth in the future.