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e-Magazine (For the Japanese version of this article)

Series: Understanding Japan through Key Words (Part 14) The Mekong Industrial Development Vision [Date of Issue: 30/October/2015 No.0248-0989]

Date of Issue: 30/October/2015

Series: Understanding Japan through Key Words (Part 14)
The Mekong Industrial Development Vision

The Japanese government recently created the Mekong Industrial Development Vision together with the five countries in the rapidly-industrializing Mekong region, namely Thailand, Vietnam, Cambodia, Laos and Myanmar. The aim is to serve as a catalyst for the region, with which Japan has a deep relationship, building on the strengths of the five countries and boosting the medium- to long-term economic growth of the region as a whole.

The Mekong region lies at the heart of China, India and the Association of Southeast Asian Nations (ASEAN), and the total population including the surrounding area comes in at more than three billion. The emergence of a massive economic zone deriving from the Mekong region would be of huge benefit to Japanese companies.

The Mekong Industrial Development Vision was adopted at the Japan-Mekong Economic Ministers Meeting held in Kuala Lumpur in August 2015. Implementing the vision is expected to boost the region's gross domestic product (GDP) by US$20 billion (approximately 2.3 trillion yen), or the equivalent of two percent, over the five years between 2016 and 2020.

Overviewing the directionality of the vision by country, in Thailand, which is the region's economic leader, existing industrial clusters will be utilized to boost the added value of the country's industrial structure. In Laos, the focus will be on precision machinery, exploiting the country's abundant water resources, while in Myanmar and Cambodia, the aim will be to use cheap labor costs to develop the textile industry, as well as to use the geographical advantage of proximity to China and India to foster the transportation and parts industries. Vietnam will take advantage of its 90-million-strong population to expand domestic demand and attract foreign investment in the automobile, electrical machinery and electronics industries.

In addition, the five countries will pursue the three strategies of partnering with neighboring countries, building a foundation for the development of more advanced industrial structures, and strengthening the infrastructure and resources that underpin regional value chains.

In partnering with neighboring countries, the aim will be to promote a pan-Asia FTA and facilitate customs in order to improve trade structures. As the Mekong countries have been slow to develop economic partnerships with India, one key issue will be to engage Indian demand.

In building a foundation for the development of more advanced industrial structures, the focus will be on lifting the base line in terms of R&D capacity. According to a Ministry of Economy, Trade and Industry (METI) analysis, the number of engineers engaged in R&D in Cambodia and Laos is less than 10 percent of the number in Indonesia and Malaysia. Partnerships between universities and between industry and universities will be encouraged to improve this situation.

The key point in strengthening the infrastructure and resources that underpin regional value chains will be to modernize logistics infrastructure. Particularly in Myanmar, in addition to the road network that connects the country to its neighbors, there has been a strong call from business to develop the large-scale port facilities vital in expanding Myanmar's trade with India and the Middle East. On the energy and environment front, Japan will lend technical support for developing high-quality power generation infrastructure such as high-efficiency coal-fired thermal power generation in order to redress power supply instability. This will include addressing the issues of cross-border power source development and power financing.

(original article : Japanese)

*This article was written by a specialist journalist.
(For the Japanese version of this article)


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