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Jakarta Post

‘Gotong royong’: Spirit of Japanese-ASEAN cooperation

  • Akira Chiba

    -

Jakarta   /   Mon, January 13, 2020   /   04:16 pm
‘Gotong royong’: Spirit of Japanese-ASEAN cooperation The newly inaugurated ASEAN secretariat building in Jakarta, August 8, 2019. (JP/Seto Wardhana)

Japanese Foreign Minister Toshimitsu Motegi delivered his first policy speech on ASEAN at the ASEAN Secretariat in Jakarta on Friday as he concluded his visit to the region, which also took him to Vietnam, Thailand and the Philippines.

In his speech, Minister Motegi reiterated Japan’s intention to mobilize US$3 billion from the public and private sectors over the next three years between 2020 and 2022, including a total of $1.2 billion overseas loans and investments for ASEAN from the Japan International Cooperation Agency (JICA).

This initiative on overseas loans and investments aims to meet the significant demand for infrastructure development in the ASEAN region, while at the same time redressing economic inequality and realizing stable development.

The initiative has three targeted fields: (1) quality infrastructure development, (2) improving financial access and supporting women and (3) green investment. Concrete projects under this new initiative will follow soon.

Let me introduce some projects undertaken so far through JICA’s overseas loans and investments that offer an image of the outlook of possible projects under the new initiative in the future.

A good example of the first pillar, quality infrastructure, is the geothermal power project in Muara Laboh in West Sumatra. The project is supported through Leading Asia’s Private Infrastructure Fund, which is funded by JICA and managed by the Asia Development Bank under the “Partnership for Quality Infrastructure”, and Japanese financial institutes.

With construction having been completed on Dec. 16, 2019, the power plant started commercial operations with a generation capacity of 85 megawatts, equivalent to the power usage of 420,000 households on Sumatra Island, and contributed to the Indonesian government’s target of reducing carbon dioxide emissions by 29 percent by 2030.

The project satisfies key principles of quality infrastructure, such as economic efficiency and integration of environmental considerations.

The Japan ASEAN Women Empowerment Fund is a good illustration of the second pillar. The fund provides financing for small businesses, so far to seven countries throughout the region, particularly those operated by women through investments and/or loans to microfinance institutes (MFI).

The concrete examples of such small businesses are the opening of retail stores for rice, snack foods and sweets and the purchase of crossbreed cows that can produce high value-added milk. Since its launch in 2016, the fund has supported approximately 230,000 female micro entrepreneurs by financing 21 MFIs in these seven recipient countries.

Providing a loan to PT Indonesia Infrastructure Finance (IIF) is an example of the third pillar, which is green investment. The project aims to mobilize private finance into infrastructure development in Indonesia by investing mainly in renewable energy projects through IIF.

The project is also expected to create infrastructure projects, including renewable energy, through matching local and Japanese companies that have interest in infrastructure business.

In the face of enormous infrastructure demand in the region, Japan will not limit its efforts to government-to-government economic cooperation alone. Private sector funding will be the key and that is exactly what this new overseas loans and investment initiative is aiming for.

I believe that this initiative will contribute to promoting the synergy between Japan’s vision of a Free and Open Indo-Pacific and the ASEAN Outlook on the Indo-Pacific.

In his policy speech, Minister Motegi cited Indonesia’s founding president Sukarno’s notion of gotong royong, to work ourselves to the bone together, to perspire together and to struggle together, as the keyword elaborating Japan’s unswerving attitude toward ASEAN.

With this spirit in mind, we are ready to collaborate with ASEAN so that this initiative could further contribute to the enhancement of ASEAN-Japanese cooperation.

***

Ambassador of Japan to ASEAN

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.