Broader Japan-Asean ties urged

Economy March 07, 2014 00:00

By Pichaya Changsorn
The Nation

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Joint potential seen in farming, Internet economy

Japan and Asean should “leapfrog” their collaborations beyond manufacturing and service industries to other areas such as Internet-based economy, agriculture and education, a senior partner of McKinsey & Co said yesterday.
Heang Chhor, in his keynote address to an international conference on “Japan’s New Wave of Overseas Investment: Thailand and Asean-Plus-One”, yesterday said the question was not so much about the opportunities or should there be more collaboration between Japan and Asean, which he believed would become more intense over the next two decades.
Heang has also co-authored “Reimagining Japan: The Quest For A Future That Works”, with other McKinsey consultants.
The seminar was organised by The Nation, along with the Yomiuri Shimbun and Japan News.
“For the trajectory to be sustained, Japan and Asean have to step up the game. There should be new way of collaborations,” he added. 
These areas for “leapfrog” collaborations that cannot be achieved by Japan alone, include using Asean as the “second leg” of an Internet-based economy for Japan, which has some restraints in entering the Internet age due to its extremely closed culture. 
For instance, top-notch Japanese IT companies can set up their operations in the region and capture a much larger customer base.
Japan can also leverage on the agriculture-based economies of Asean to shape the “agriculture 2.0” network, as now consumers are no longer just satisfied with cheap and enough food, but also hunger for high quality and safe foods, to supply to consumers worldwide. 
Heang also suggested that Japan assist Asean in building up energy-efficient “smart cities” as well as collaborate more on education, including sending out teachers, young people, and veteran executives to the region.
“If Japan can send 50,000 young Japanese every year to Asean whether they are students, workers, with support from the government, in 10 years we will have half a million Japanese who are more familiar with Asean,” Heang said.
Chanon Ruangkritya, chief executive of Ananda Develop-ment, a property development company which has a joint venture with Mitsui Fudosan, said his Japanese partner was still committed to investing in Thailand upto US$100 million this year, despite the current political situation here.
“They look to stay for a long time. We see the current situation as an opportunity to buy and ‘lock-in’ the [land] prices,” he said. Shuichi Ikeda, chief representative of JICA Thailand Office, said the Asean Economic Community could potentially lead to a “flight” of labour-intensive industries from Thailand to the lower-cost Mekong subregion economies, although the Kingdom could also use its geographical advantage to gain from the regional pact.
Chokedee Kaewsang, deputy secretary-general of the Board of Investment, said improvement of regional infrastructure could induce more impacts to “Asean connectivity” than cutting the remaining import tariffs.
Ryosuke Chono, managing director of Toray Industries Thailand, told the conference that his Japanese parent company has set a target to increase the localisation of its Asean management to more than 30 per cent while currently it is only 4 per cent. However, the situation is now different and he expects the localisation process to accelerate with the number of Thai and other Asean management personnel growing rapidly in the coming years.