GP Insights # 431, 25 October 2020
During 18-21 October, Japan's Prime Minister Suga Yoshihide undertook a four-day State visit to Vietnam and Indonesia—his first as Prime Minister. Japan and Vietnam agreed on a deal to allow Japan to export defence-related equipment and technology to Vietnam. Both also agreed on the movement of people to help reopen the two economies. While they emphasized on the necessity of a Free and Open Indo-Pacific, both countries refrained from mentioning China in their opening statements. Twelve bilateral agreements were signed between the two countries relating to energy, infrastructure, environment, health, and innovation. Japan agreed to provide Vietnam equipment worth 300 million yen to 'combat terrorism', and a loan of 4 billion yen to combat the COVID-19 pandemic. At his speech at the Vietnam-Japan University, Suga emphasized on Japan's policy of relocating supply chains to ASEAN, the importance of ASEAN-Japan ties, and Japan's policy on opposing any form of instability in the South China Sea.
In Jakarta, Suga agreed to provide Indonesia with a loan of 50 million yen for disaster prevention measures. Suga asserted that Southeast Asia is essential in realizing a Free and Open Indo-Pacific. Japan and Indonesia agreed to have "two-plus-two" foreign and defence ministerial-level talk. Japan has such an arrangement only with India, Australia, and the US. Both countries have also agreed to work on the possibility of Japan exporting defence-related equipment and technology. Japan also agreed to provide Indonesia with a loan of 50 billion yen for the pandemic-hit economy. Further, Suga asserted in his press statement that he met with representatives of Japan's businesses in Jakarta and agreed that Japan would vehemently focus on its supply chains there.
What is the background?
First, Japan's pursuit of the Indo-Pacific and Southeast Asia. Tokyo promulgated the "Free and Open Indo-Pacific" strategy in 2016; it envisions Japan's goals to have the Oceans in the Indo-Pacific open for uninterrupted commerce and freedom of navigation. Part of this policy envisions the South China Sea and the East China Sea free of conflict. ASEAN centrality is the cornerstone for this approach, thereby seeking close political, economic, and strategic links between Japan and ASEAN countries.
Second, Japan has sought to use FOIP policy as a check and balance over China's rise in the region. This has led to measures recently such as Japan's proposal of moving supply chains away from China and into ASEAN, India, and Bangladesh by giving firms various economic incentives to do so.
Third, Japan has sought to expand its defence industry by revoking its arms export ban in 2014. So far, Japan has signed agreements with eleven countries, including Vietnam, as potential countries for exporting arms and defence-related technology.
What does it mean?
Japan seeks to woo ASEAN countries into its existing security frameworks, such as the Quadrilateral security dialogue. Judging by Indonesia's interest and hitherto close ties with Japan's primary ally, the United States, it seems highly likely that Indonesia may soon show interest in expanding security cooperation with Japan.
However, Vietnam's extreme dependence on Chinese investments may restrict security cooperation with Japan only as far as its primary zone of contention lies - the South China Sea, where Vietnam controls a large part of the disputed territory.