Africa is a market with 1.2 billion potential consumers. Unable to compete with China directly, Japan is focusing on the private sector, adding US$ 20 billion dollars in three years. Prime Minister Abe wants African support on reform of the UN Security Council and a Free and Open Indo-Pacific.
Yokohama (AsiaNews/Agencies) – Prime Minister Shinzo Abe said that Japan is determined to boost its economic role in Africa and warns the continent's leaders against accumulating too much debt. For analysts, Abe was referring to Chinese infrastructure projects, accused of damaging the finances of developing nations through a "debt trap".
The Japanese Prime Minister spoke yesterday at the opening of the seventh Tokyo International Conference on African Development (TICAD7) in Yokohama, Japan, which ends tomorrow.
The Government of Japan has organised the event every five years since 1993, together with the United Nations (UN), the United Nations Development Program (UNDP), the World Bank and the African Union Commission (AUC).
Abe told African leaders present at the Conference that Japan was promoting "quality" infrastructure exports and investments, supported by institutions backed by the Japanese government.
In his address, the Prime Minister illustrated financing and insurance schemes provided by the same Japanese government-backed institutions aimed at reducing risks to businesses and public coffers.
“If partner countries are deeply in debt, it interferes with everyone’s efforts to enter the market,” he said.
The Japanese leader also announced that his government plans to train experts in 30 African countries in next three years on managing risks and public debts.
“I make this pledge to you,” Abe told African leaders. “The Government of Japan will put forth every possible effort so that the power of Japanese private investment, of billion in three years, should in the years to come be surpassed anew from one day to the next.”
“We will do whatever it takes to assist the advancement of Japanese companies into Africa,” he added.
Japan is trying to enter African markets with their 1.2 billion potential consumers, where another Asian player, China, has carved a dominant position for itself.
Japan’s trade with Africa, at billion in 2018, is half what it was in 2008 and a fraction of China’s more than 0 billion, official figures show.
With its ambitious Belt and Road Initiative (BRI), Beijing now enjoys a massive presence on the continent, having announced US$ 60 billion in development funding for Africa last year.
Experts note that Tokyo, rather than competing directly, is trying to differentiate itself from Beijing by stressing the quality of the infrastructures it can build in African.
Japan has also stressed financial sustainability and private-sector partnerships that don’t raise government borrowing.
This comes as Chinese state-to-state loans have raised concerns as they are pushing African countries further into debt.
Whilst China brings its own workers to build infrastructure, Japan says it employs locals and transfers technology to Africa. In practice though, the problem is that poor countries with huge infrastructure deficits often do not feel they can afford to pay for quality.
To address this issue, Abe pledged “limitless support” for investment, innovation, enterprise and entrepreneurship by partnering with local financial institutions. In return, he wants African support on two issues.
The first one is reform of the United Nations Security Council to allow more permanent members, “a common cause for Africa and Japan that still awaits a resolution,” Abe said.
The second one is support for Japan’s idea of a Free and Open Indo-Pacific, uniting the region behind the principles of free trade and freedom of navigation, the rule of law, and the market economy, and meant partly as a counter to China’s Belt and Road Initiative.