Japanese and ASEAN ministers met in Jakarta earlier in April, demonstrating solidarity among Asians in the face of Japan's crisis. The meeting was not without potential significance for future policy, argues SIIA Chairman Simon Tay, who looks at the meeting's implications for energy, safety and industrial production.
This was published in TODAY (Singapore) 14 Apr 2011
by Simon Tay
Here's how ASEAN must go about engaging this post-disaster nation
When Japanese and ASEAN ministers met in Jakarta on Saturday, the moment was both poignant and potentially significant for future policy.
The meeting, called by ASEAN and hosted by current chair Indonesia, came just about a month after Japan suffered the twin tragedies of the earthquake and tsunami. Many Japanese citizens remain in temporary shelters even as the authorities grapple with leaks at the Fukushima Dai-Ichi nuclear power plant.
The poignancy comes from the demonstration of solidarity among Asians. Indonesian President Susilo Bambang Yudhoyono opened the meeting by expressing ASEAN's intention to "enhance cooperation and respond quickly at a time when one of us faces a grave disaster". Philippine Foreign Minister Albert Del Rosario was quoted as saying he believed Japan "will emerge and ASEAN will be with Japan all the way".
The acknowledgment of Japan as "one of us" delivers a political message. Building on decades of Japanese economic assistance and political cooperation, the tragedy has crystallised a sense of solidarity.
Practically speaking, there are limits to what disaster relief ASEAN could possibly lend. Japan is by far better resourced and ASEAN members still struggle to meet their own needs, as the current floods in southern Thailand show. But the meeting is not without potential significance for future policy.
The most immediate of these will be for energy. Four ASEAN countries - Vietnam, Thailand, Malaysia and Indonesia - have plans to develop nuclear energy plants, while Singapore is undertaking a pre-feasibility study to better understand the technological choices, costs and risks.
Some countries - Indonesia and Thailand - are exposed like Japan to risks of earthquakes and tsunamis. No ASEAN country currently has existing nuclear power plants and must turn to foreign expertise if they move ahead, including to Japanese energy companies. What has happened at the Fukushima plant must, therefore, be watched and closely studied. This is especially as South-east Asians have long admired the Japanese culture of safety and engineering know-how.
At the meeting, Japan agreed to increase its transparency and communication of the still-unfolding situation. Subsequent news that the incident is now comparable to the worst-ever nuclear incident, Chernobyl, only heightens this need for ongoing and candid assessment.
A second energy concern that is emerging is the need for alternatives. It is likely that imports of gas will surge in Japan and long-term contracts will likely be pursued from Indonesia and others. Additionally, Japanese companies should be assisted in moving forward on innovative alternative energies, as Kyushu Power from Japan is now doing with geo-thermal energy production in Sumatra.
A third policy implication will be for industrial production.
In the months before the earthquake, leading Japanese companies were looking to expand their manufacturing operations in South-east Asia. This was originally to deal with higher costs in Japan, from the strong yen, and to diversify from production in China, as the Naoto Kan government encouraged a new openness.
These reasons remain. Indeed the need is compounded by the energy shortages loom domestically, even into the middle and longer term. The outward push by major Japanese companies should, therefore, be expected to continue, although its initial pace must be managed to ensure that jobs are not lost in affected provinces, further affecting their economy.
Overseas expansion will help with another knock-on effect - the impacts on the global supply chain when some production halted in Japan. Given this phenomenon, Japanese manufacturing operations in the region will look to further indigenise production with higher-value-added components and products. By so doing, manufacturing in South-east Asia - beyond for the cheaper land and labour - can help Japanese companies diversify to minimise potential future disruptions to their global production.
Political engagement in the wake of the tragedy is also critical for the wider region. Some have tended to looked past Japan to a rising China in recent years and last year marked the shift in the absolute economic size between the two giants. But this is not, and never should have been, an "either/or" choice.
Japan's participation in Asian regionalism has many dimensions that are different and indeed complementary to a rising China. Without involvement and commitment from Japan, the still-emerging institutions for the region will be weaker or otherwise move in directions that may not be fully comfortable for some Asian governments.
Some hope the Kan government will gain support in the wake of the tragedy as society rallies around, and Japan can show consistent leadership. But even if this does not happen, reaching out to Japan will be fundamental for ASEAN as a group to serve as a hub for the wider Asia.
Japan remains important and indeed is fully integrated in Asia as "one of us". This was the case before the earthquake and remains so. This is so not only in high politics and industry but also in the consciousness of everyday citizens across the region. Sadly, it has taken this disaster to remind more of this.