Advancing economic growth via cooperation | Digital Asia
Digital Asia News Update
I would like to offer my heartfelt congratulations to Malaysia on its 61st anniversary of independence. Japan and Malaysia opened diplomatic relations on Aug. 31, 1957. Since then, the two countries have deepened their relationship in all aspects, including politics, economy, culture and education.
On the economic front, Japanese companies began to advance into Malaysia in the 1960s, led by the electric and electronics industries. Later, against the backdrop of a stable political situation, increased English proficiency and well-developed fundamental infrastructure in Malaysia, a greater variety of Japanese industries joined the movement, including automakers, chemical companies, retailers and financial institutions.
Under the Look East Policy that was launched in 1982 by Prime Minister Mahathir Mohamad, during his first stint as prime minister from 1981 to 2003, cooperation proceeded in economic matters, including human resource development and technology transfers. In particular, skilled Malaysian workers who were sent to Japan under this policy acted as a bridge for the two countries’ economic relationship.
Currently, around 1,400 Japanese companies are operating in Malaysia. These companies are making significant contributions to Malaysia’s economic development with the creation of approximately 340,000 jobs and conducting business with, and transferring technologies to, Malaysian companies, among other activities.
Last year, the number of Malaysian tourists visiting Japan rose to a record 440,000 people, and the number is expected to grow further. At the same time, investment in Japan by Malaysian companies is also increasing, as exemplified by the development of a ski resort in Hokkaido and the opening of a luxury hotel in Kyoto. Moreover, cooperation has begun in new fields. For example, the Malaysia Digital Economy Corporation and the Japan External Trade Organization have been cooperating in promoting matching between startup companies from the two countries since 2016. I am looking forward to further development of the economic relationship through such reciprocal activity.
In 2006, the Japan-Malaysia Economic Partnership Agreement (JMEPA) was put into force as an initiative to further enhance the economic relationship between the two countries. Through the enforcement of the JMEPA, which covers a broad range of items and issues, including the liberalization of the flows of goods, capital and services, the improvement of the business environment and cooperation in the automobile and other industrial sectors, the value of trade between Japan and Malaysia expanded to approximately ¥3.6 trillion in 2017. Furthermore, the balance of direct investment grew to approximately ¥1.6 trillion in 2017, reflecting an ever-evolving bilateral economic relationship.
It is also important to promote efforts to strengthen broader economic partnership in addition to the bilateral economic partnership. Japan and Malaysia have been closely cooperating with each other to realize various regional integration initiatives, starting with the Association of Southeast Asian Nations-Japan Comprehensive Economic Partnership, which came into force in 2008. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which was signed in March this year, is an economic partnership agreement that establishes 21st century rules in a wide range of areas, including rules on electronic commerce and state-owned enterprises. In the interest of disseminating high-quality rules, I hope that Malaysia will ratify this agreement as soon as possible.
Regarding the Regional Comprehensive Economic Partnership (RCEP), in March this year, I expressed support for ASEAN’s policy of concluding this agreement by the end of the year on the premise that appropriate levels of quality will be secured. For its part, Japan has continued to actively engage in negotiations in order to finalize a high-quality RCEP in cooperation with ASEAN at a time when the RCEP negotiations are attracting increased attention amid the growing worldwide concerns over protectionism. For example, in July, Japan hosted a ministerial RCEP-related meeting in Tokyo, which was the first such meeting to be held outside ASEAN. It is very significant that by promoting such activities, Japan and Malaysia will continue to increase the sophistication and depth of their partnership and play leading roles in expanding cooperative relationships and disseminating high-quality economic rules throughout Asia and across the globe.
Japan and Malaysia have been cooperating in various fields while developing good relationships at the bilateral and regional levels. I am committed to ensuring that Japan and Malaysia will grow together and contribute to the economic development of this region.