Asian Gateway - Hub of High-level Human Resources Development

Takashi SHIRAISHI (Vice President, National Graduate Institute for Policy Studies)

Prime Minister Shinzo Abe's Asian Gateway Vision aims for Japan to contribute to bringing stability and prosperity to Asia, and simultaneously for Japan to channel new vitality from other Asian countries. Establishing an open country through domestic reforms is important for Japan to become a hub in Asia's network of high-level human resource development.

Make all of Japan into a gateway

A place where people everywhere would want to visit, live, work, and study... if Japan could be such a country, it would be a place comfortable and attractive for the Japanese as well. But how can that be achieved? Prime Minister Abe in his policy speech in September set forth the "Asian Gateway Vision," where he proposes two approaches to achieve such an ideal. One is to create a stable, peaceful, open, and vibrant Asia, and the other is to take in Asia's vitality by making Japan open and attractive.

The term "gateway" is defined in the dictionary as a "software or hardware that enables communication between computer networks that use different communications protocols." Singapore calls itself a gateway linking Asia and the world. My understanding, however, is that the term used in "Asian Gateway Vision" is not only intended to represent the image of an entry point such as an airport, from where other parts of the region are accessed.

Rather, what is meant is to make all of Japan a gateway where it would contribute to promoting stability and prosperity throughout Asia, while drawing on the vitality of Asia for its own benefit. The vital elements in creating such a structure include promotion of economic cooperation, participation in fashioning a stable regional order, and opening up Japan through domestic reforms.

There are two reasons for such a vision to have strategic significance. One is the change of Japan's position in Asia. Economic development of East Asia and the rise of China and India as major economic powers have made Asia the growth center of the world, which led to the increasing de facto economic integration of the region. It has embedded Japan more deeply in the region changing its position in the region from what we may describe as "Japan and Asia" to "Japan in Asia." What is important here is that this process is market-driven. But it now needs to be supported institutionally.

Liberalization of labor market still a big issue

Another reason is the rise of "Asian middle classes." These people are professionals who received high education and are capable of speaking two or more languages. These are the people who accepted and promoted Japanese games and fashion, as well as Korean TV dramas to become popular throughout East Asia, and these are the people now shaping their own countries - their politics, economy, society, and culture.

It is crucial for Japan to make friends with these people. Winning the confidence and respect of these people through activities such as intellectual exchange and human resources development is necessary.

The trend can be observed through various data. There is a forecast that the share of Asia (ASEAN, Japan, China, S.Korea, Taiwan and India) in global GDP will rise from 27% in 2005 to 30% in 2015. The share of Japan's trade with Asian countries has increased from 39% in 1995 to 46% in 2005 of the total (imports and exports).

Japan's exports to Asian countries of movies, books, art crafts, and audiovisual software (including games) has increased from 370 million dollars in 1994 to 820 million dollars in 2004. And imports of these items increased from 310 million dollars in 1994 to 1.47 billion dollars in 2004.

Looking at social statistics, marriages between Japanese and foreigners were 20,000 in 1989, and rose to 41,000 in 2005. Among these, 30,000 are between Japanese husbands and wives from China, the Philippines, Korea, or Thailand. The share of international marriages in 1995 was 3.5%, which rose to 5.8% (i.e. one in seventeen) in 2005, and in Metropolitan Tokyo the international marriages reached 9.5% in 2004. The number of foreign students in Japan was 54,000 in 1995 and increased to 122,000 in 2005, among which 90% were from Asia.

How, then, should Japan try to achieve stability and prosperity in both Japan and Asia? One way is to make Japan open to Asia and the world. Some progress has been made in such areas as trade and finance in the form of EPAs (Economic Partnership Agreements) and the Chiengmai Initiative, but the liberalization of agriculture and labor markets, such as nurses and careworkers, is still a large issue.

For example, EPA with the Philippines allows for Filipino nurses and careworkers to work in Japan. But in reality, the rules require nurses already qualified and with working experience in the Philippines to receive six months of language and extended nursing training, then to go through work training in facilities in Japan, then to pass the national examination, and finally to receive a visa to work for three years in Japan. In no way can this be considered "open."

There are other issues as well that need to be addressed for opening Japan to Asia and the world. For example, internationalization of Haneda Airport and realization of 24-hour cargo handling capabilities at air and seaports are necessary to enhance physical distribution functions of international goods.

Another issue is the necessity for Japan to exercise leadership in achieving stability and prosperity in Asia. Leadership does not necessary mean adopting the "follow me" attitude. Japan is actually better with the "leading from the back" style of leadership.

Government and the private sector should work together for regional cooperation

Japanese style leadership can be exercised as follows. Currently there are many types of regional cooperation in progress in such areas as finance, trade, and measures against avian flu. In regional cooperation, each participating country is expected to have a certain level of capability, such as macro-economic monitoring and infectious disease surveillance. But in reality there are many countries without such capabilities.

Take energy conservation, for example. Energy efficiency in East Asian countries is significantly worse than in Japan. To produce the same economic value, China uses nine times, and Thailand five times the energy of Japan. In Japan there are public rules such as defining the functions of energy managers who formulate energy saving plans at factories and labeling procedures to display efficiencies on household electric appliances. In the private sector there is a business model called ESCO (energy service company). This is a business to plan, build, equip, and run energy saving schemes in buildings and factories, and to receive a part of the value of savings achieved in return.

Disseminating this type of system as a package with the cooperation of the government and the private sector in Asia would contribute to building regional energy conservation systems. It would also serve in regionally spreading the energy saving system developed in Japan.

Another example is the development of human resources. The importance of human capital in economic development in Asia has often been pointed out. In reality, however, researchers, professionals, and students seeking higher education tend to opt for leaving the region, most often to the U.S. A Japan that could provide attractive job and study opportunities and promote intellectual exchange to assist human resources development within the region would have significant relevance in establishing innovation systems and economic development in Asia. A lot can be done for this purpose. For example, if Japan could take initiatives in expanding the mutual recognition of professional qualifications as a part of EPA, a regional qualification system might be created in due course which is compatible to the Japanese system. It goes without saying that revitalizing the Japanese university system is also of crucial importance in this respect.

The point here is to make Japan a hub of the high-level human resources development network. This would lead to making friends with the Asian middle class.

There are many issues that need to be tackled in Asia. We have developed systems, such as energy saving and recycling, to cope with issues we confronted in the past, which might be useful in dealing with challenges the region now confronts. The Asian Gateway Vision calls for opening up Japan and to regionalize systems that can serve in coping with issues we now have in Asia. Achieve the vision requires domestic reform which in turn requires strong leadership at the helm of the government.

(The original Japanese article appeared in the December 19, 2006 issue of Nihon Keizai Shimbun.)