(Press Release)
Japan and ASEAN Declared Readiness for a
New Wave of FDI
The 31st ASEAN-Japan Business Meeting
November 25, 2005
Japanese and ASEAN business leaders declared that they are ready for a new and significant wave of investment in both the industrial and service sectors, and infrastructural projects.
At the 31st ASEAN-Japan Business Meeting held in Bangkok during November 23-25, 2005, business leaders from Japan and ASEAN jointly announced their readiness for the new wave of Japanese FDI after a period of slowdown. Japan's economic recession and plaguing financial sector as well as the financial crisis in ASEAN taking place in 1997-98, have led to this slowdown in Japanese FDI flows into ASEAN and an increase of Japanese FDI in China.
Today, the Japanese economy and financial institutions have regained their strength while the ASEAN economies have registered healthier growth and higher financial stability. As a result, ASEAN and Japan are now in need and ready for a new wave of investment.
Key factors affecting this new FDI wave include the readiness of financial and capital markets, improved corporate governance, information disclosure transparency, intellectual property rights protection, and corporate social responsibility.
Furthermore, the liberalization of trade in goods and services, both in the framework of the WTO and FTAs which ASEAN countries have concluded among themselves and with Japan and other countries, has resulted in intensifying competition. Companies then need to enhance its competitiveness by focusing on their core businesses which require further investments in upgrading and improving efficiency and productivity.
Japanese and ASEAN business leaders have agreed that deeper economic co-operation in the region is very crucial to this restructuring process. The bilateral free trade agreements should then be expanded to become the FTA between ASEAN and Japan as well as other countries in East Asia, eventually leading to the formation of the East Asia Economic Community. At the same time, East Asia should equally enhance its ties to other major trading partners such as India, Australia, New Zealand, the US and the EU. Strong commitments for liberalization are also required in those sectors crucial to developing countries in the region such as agriculture.
Over 300 participants attended the 31st AJBM. Many prominent figures took part in this event as speakers, including Prime Minister Thaksin Shinawatra; Mr. Anand Panyarachun, Thailand's former Prime Minister; Dr. Cesar E.A. Virata, former Prime Minister and Minister of Finance of the Philippines; Mr. Haruhiko Kuroda, President of the Asian Development Bank; Mr. Shoei Utsuda, President of Mitsui Group; Mr. Kakutaro Kitashiro, Chairman of Keizai Doyukai; and Mr. Staporn Kavitanon, Vice-Chairman of the Bangkok Bank.
At the event, Prime Minister Thaksin emphasized the importance of Japan-ASEAN relationship and the transformation of AFTA into the East Asia Free Trade Agreement, which will include Japan, China and South Korea. His statement was later echoed by the convergence of views by AJBM participants during their two-day meeting.