Japan and Southeast Asia Set to Co-Create an Interwoven Future

INTRODUCTION

Last year, ASEAN and Japan celebrated the 50^th anniversary of their dialogue relations with the establishment of the ASEAN-Japan comprehensive strategic partnership. The evolution of this relationship, initially overshadowed by bitter memories of Japan’s occupation and atrocities during the Second World War, as well as concerns over Japan’s economic expansion in the 1960s and 1970s, into one characterised by deep strategic trust and mutual interdependence today is a remarkable achievement. This transformation has been made possible thanks to Southeast Asia’s forward-looking and pragmatic approach that prioritised their security and development needs rather than their past trauma. It has also been nurtured through decades of Japanese strategic assurances, economic engagements, and sustained efforts to be a steadfast friend and a good neighbour. A milestone in this journey is the Fukuda Doctrine, which laid the foundations for Japan’s contemporary relations with Southeast Asia. Launched in 1977 amid a wave of anti-Japanese sentiments, the doctrine committed Japan to pursue peace and relinquish military dominance, support regional economic growth, and foster a “heart-to-heart” equal partnership with Southeast Asian nations.

Today, Japan enjoys the highest level of trust among the public and the elite circles in Southeast Asia, surpassing all other major powers. This achievement has been attributed to several factors. First, Japan has played a crucial and constructive role in shaping the regional order through its active engagement with and support for ASEAN multilateralism and its member countries, serving as a stabilising force amid periods of US disengagement, neglect or distraction from the region. Second, Japan has been a significant contributor to Southeast Asia’s economic ascendancy through its investments, trade ties and development assistance. It is the largest provider of Official Development Assistance (ODA) to the region, its fourth largest trading partner, and among its top sources of foreign direct investment (FDI).

Another crucial yet often overlooked factor is the intensity of people-to-people connections between Japan and Southeast Asians. These connections have never been more profound in history. Nearly 50 years since the Fukuda Doctrine, the “heart-to-heart” dimension in the relationship is coming to fruition not only at the inter-governmental level but also in the broader fabric of societal and interpersonal interactions. This article delves into the expanding human connections between Japan and Southeast Asia in three dimensions, namely (i) labour cooperation; (ii) education and human resource development; and (iii) tourism and cultural flows. It argues that these connections will bring new momentum to Japan-Southeast Asia relations. Notably, these human ties underscore the growing importance of Southeast Asia to Japan, transcending its traditional role as a market and production base for Japanese products and companies. The region is becoming a reservoir of alternative resources for sustaining Japan’s economic growth, signifying a shift towards a more balanced and reciprocal partnership between both sides.

INCREASINGLY SYMBIOTIC LABOUR RELATIONS

Beyond trade, aid and investment, the symbiosis between Japan and Southeast Asia extends significantly into the labour sector. Southeast Asia has become an increasingly important source of labour for Japan, which has been grappling with economic challenges stemming from its ageing population and shrinking workforce. The Japanese population was 122.4 million in 2023, down 800,523 from a year earlier, marking the largest drop since 1968. Of these, 59.5% or 72.8m are of working age (15-64), and this figure is projected to drop to 45.4 million in 2070. According to the Japan International Cooperation Agency (JICA), to maintain economic growth, Japan will need 6.74 million foreign-born workers by 2040, nearly quadrupling the number of foreign workers in Japan in 2020.

As Japan’s demographic challenges become more acute, the importance of foreign workers is poised to grow. In October 2023, the number of foreign workers hit a record 2.05 million, up 12.4% from 2022 and a two-fold increase from 2012. Vietnam is now the largest source of foreign labour in Japan, with 518,364 workers (25.3% of the total). The Philippines is another significant source, with 226,846 workers (11.1%). The number of workers from Indonesia and Myanmar is increasing rapidly. Southeast Asian nationals collectively represent one-third of all foreign residents in Japan (Table 1).

Table 1: Southeast Asian Nationals in Japan

Total foreign residents in Japan	2020	2021	2022
	2,887,116	2,760,635	3,075,213
Indonesia	66,832	59,820	98,865
Cambodia	16,659	14,736	19,604
Singapore	2,958	2,738	3,306
Thailand	53,379	50,324	56,701
The Philippines	279,660	276,615	298,740
Viet Nam	448,053	432,934	489,312
Malaysia	10,318	9,659	11,045
Myanmar	35,049	37,246	56,239
ASEAN	912,908	884,072	1,033,812

Japan’s demand for foreign labour has necessitated the establishment of legal and regulatory frameworks for this purpose. In 1993, Japan introduced the Technical Intern Training Programme (TITP) with the intent to make international contributions through human resource development. However, the TITP with its strict transfer restrictions has been criticised as providing a backdoor for Japanese employers to secure cheap labour without sufficient protection of foreign workers’ rights, leading to labour abuses. In 2019, the Specified Skilled Worker (SSW) system was launched to recruit foreign specialists to work in certain industrial fields. All Southeast Asian countries, except Brunei and Singapore, have signed cooperation agreements with Japan regarding the SSW system. Vietnam is the largest participant in both the TITP and SSW schemes, accounting for 54% of TITP trainees and 59% of SSW.

Southeast Asia has become an increasingly important source of labour for Japan, which has been grappling with economic challenges stemming from its ageing population and shrinking workforce.

Amid mounting criticisms of the TITP, an advisory panel for the Japanese government issued a report in 2023 proposing its replacement with an alternative scheme to be incorporated within the SSW framework. One of the aims is to facilitate foreign workers trained under the new scheme to shift to the SSW so that more foreign workers will be able to perform highly skilled jobs. The report is anticipated to pave the way for the Japanese government to submit a bill to the parliament in 2024 to enact the new scheme. The imperative to reform the TITP, originally designed to foster human resources for the benefit of the sending countries, reflects the evolving nature of labour cooperation between Japan and Southeast Asia, underscoring the significance of Southeast Asia as a co-creator of prosperity for Japan rather than merely being a beneficiary.

However, a significant segment of the Japanese populace maintains deep-seated reservations about migration. 35% of Japanese respondents in a 2020 survey done by the International Labour Organization (ILO) said that their country does not need low-skilled workers, 52% thought that crime rates had increased due to migration, and 41% thought that migrant workers threatened Japanese culture and heritage. The survey also pointed out that Japanese people have the lowest level of encounters with foreign workers, compared to Southeast Asian labour importing countries such as Singapore and Malaysia.

While being mindful of public backlash, the Japanese government has taken incremental steps to attract more foreign labour. As highlighted by Yusaku Yoshikawa, “attracting foreign workers is not an act of kindness, but an imperative for Japan”. This has become all the more urgent as Japan is becoming less appealing to Southeast Asians due to the situation of stagnant wages, a weakened Yen, and limited prospects of job replacement and long-term residence associated with the TITP scheme. New measures adopted by the Japanese government in 2023 include two new immigration pathways to attract foreign talents and amending the Immigration Control and Refugee Recognition Act which is meant to enhance immigration management and protect the rights of foreign nationals. The SSW visa will likely be expanded to include new sectors of road transportation, railways, forestry and timber.

As for Southeast Asia, Japan has made concrete commitments in the Implementation Plan of the 2023 ASEAN-Japan Joint Vision Statement to “further ease barriers to entry for foreign workers in professional and technical fields to work in Japan”, including through language training, education and skill programmes for Southeast Asian workers, and explore mutual recognition of workers’ skills. Japan should also foster mutual understanding and integration between local communities and foreign workers. With foreign nationals projected to constitute 10.2% of Japan’s population in 2067, they will increasingly become an integral part of local communities in both cities and rural areas. Therefore, adjustments and accommodations are imperative to prevent backlash from arising on either side. On their part, Southeast Asian countries should step up efforts to curb misconduct by sending organisations, eliminate brokers in the process, and educate their workers about Japanese laws and regulations.

CO-CREATING TALENT: JAPAN’S SUPPORT FOR SOUTHEAST ASIA’S HUMAN RESOURCE DEVELOPMENT

Closely intertwined with Southeast Asia-Japan labour relations is the significance of Japan’s support for education, training, and capacity building in the region over many decades. Japan has been a trailblazer in this respect with the roll-out of the ASEAN Human Resources Development Project in the 1980s aiming to “cultivate talent for the future of the ASEAN region”. Japan has played an instrumental role in aiding industrial human resource development and higher education in the original ASEAN members in the 1980s and in providing capacity-building for the newer ASEAN members – Cambodia, Laos, Myanmar and Vietnam (CLMV) since their opening-up and reforms in the 1990s.

Japan’s support includes the establishment of human development institutions in these countries (Table 2), capacity building projects for their government and education institutions, and provision of scholarships in Japanese universities. According to JICA, Japan-supported programmes have cultivated 12,508 industrial talents in the region as of 2022. Japan is also the biggest bilateral ODA provider for Southeast Asia’s education sector with US$1.03 billion spent for 2,760 projects from 2015 to 2021, surpassing the US which contributed US$670 million for 651 projects. Conversely, China’s contribution in this domain remains modest, totalling only US$155 million for 41 projects.

Table 2: Japan-Supported Human Development Institutions in Southeast Asia

Country	Japan-Supported Human Development Centres
Brunei	N.A.
Cambodia	Cambodia-Japan Cooperation Centre
Indonesia	Center for Vocational and Extension Service Training
Laos	Laos-Japan Human Resource Development Institute
Malaysia	Centre for Instructor and Advanced Skill Training
Myanmar	Myanmar-Japan Center for Human Resources Development
Philippines	Philippines Human Resources Development Center
Singapore	Singapore Productivity Development Project (the Kaizen project)
Thailand	Thailand Primary Healthcare Training Center; Thai-Japan Institute for Technological Promotion; Sirinthorn International Institute of Technology
Vietnam	Vietnam-Japan Institute for Human Resources Development

In addition to bilateral frameworks, Japan has sponsored several multi-year multilateral initiatives that have earned widespread acclaim and appreciation from generations of participants. These initiatives include the Japan East-Asia Network of Exchange for Students and Youths (JENESYS) and the Attachment Programme at the ASEAN Secretariat for CLMV Diplomats/Officials. Japan’s support for ASEAN integration through education and human resources development has garnered significant appreciation from Southeast Asians, as evidenced in a public survey conducted by the Ministry of Foreign Affairs of Japan in 2019.

This support does not merely represent a benefactor-beneficiary relationship but as a collaborative endeavour in human resource development. Japanese companies, both domestically and overseas, increasingly rely on quality labour from Southeast Asian countries. Therefore, investing in human capital development in the region not only benefits Southeast Asia but also strengthens Japan’s economic ties and competitiveness in the global market. Acknowledging this symbiotic relationship, the Ministry of Economy, Trade and Industry (METI) includes “building an ecosystem for co-creation of dynamic human capital” as a key component of its ASEAN-Japan Economic Co-Creation Vision and Future Design and Action Plan. This component encompasses building a network of young Japanese and ASEAN business leaders and promoting the circulation of human resources through endowed courses, overseas internship programmes and job fairs, among other things. Prime Minister Fumio Kishida’s announcement at the 2023 ASEAN-Japan commemorative summit further underscores Japan’s dedication to human resources development in Southeast Asia, with a plan to train 5,000 people in domains such as maritime safety and digitalisation over the next three years.

MUTUAL TOURISM AND CULTURAL APPRECIATION

One of the most remarkable achievements in Japan-Southeast Asia relations is the transformation of Southeast Asians’ postwar animosity into a prevailing positive attitude towards Japan across the region. This stands in contrast with Northeast Asia, where Japan’s militant past remains deeply apprehended and heavily politicised. According to a public survey in 2023, the perception of Japan as “a combative nation” has significantly diminished among Southeast Asians, registering at only 4% whereas 88% positively appreciate Japan as a “peace-loving nation”. Instead, their top impressions about Japan are its strong economy and advanced technology, rich traditions and culture, natural beauty, high standard of living, and its introduction of new cultural trends such as animation, fashion, and cuisine. As noted by Lam Peng Er, “Time does not naturally heal, but common interests, patience, goodwill, and political wisdom on both sides helped to eventually overcome this problem of the heart”.

The “heart-to-heart relationship” between ASEAN and Japan finds its most tangible expression in the cultural sphere and the burgeoning tourism ties between their peoples. Initially, cultural and tourist flows predominantly represented a one-way movement from Japan to Southeast Asia. However, in the past decade, there has been a notable shift towards more balanced, two-way interactions and mutual appreciation. For instance, visitor arrivals to Japan from six major ASEAN countries, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, increased more than six folds from 325,000 in 1990 to more than 2 million in 2015. Between 2008-2018, the number of Vietnamese tourists to Japan soared by 868.1%, followed by Thailand (489.3%) and Indonesia (448.7%). Before the pandemic, Southeast Asian tourists visiting Japan surpassed 3.8 million, comprising 12% of total international arrivals to Japan in 2019. They also play a significant role in Japan’s post-pandemic tourism recovery, with 3.6 million arrivals in 2023, accounting for 14.5% of total international arrivals to Japan (Table 3). According to the State of Southeast Asia 2023 survey done by ISEAS-Yusof Ishak Institute, Japan is the most popular tourist destination for more than 27% of Southeast Asian respondents, surpassing the second-place EU (15.3%) and third-place US (9.7%).

Table 3: Southeast Asian Visitors to Japan

	2019	2023
Thailand	1,318,977	995,500
Singapore	492,252	591,300
Malaysia	501,592	415,700
Indonesia	412,779	429,400
The Philippines	613,114	622,300
Vietnam	495,501	573,900
ASEAN-6	3,834,215	3,628,100
International visitors	31,882, 049	25,066, 100

The burgeoning tourism ties between Japan and Southeast Asia are underpinned by a growing understanding and familiarity at the societal level between both sides while memories of wartime experiences with imperial Japan – though not forgotten – have gradually faded away particularly among younger generations. Japan’s cultural influence in Southeast Asia extends across domains such as cuisine, design, lifestyle, traditional arts, and trendy fashion. According to an opinion poll on perceptions of Japan conducted by Japan’s foreign ministry in 2023, the top aspects of Japanese culture that attract Southeast Asians are its food (81%), lifestyle and way of thinking (63%), and animations (61%). The appreciation of Japanese culture and design has boosted Southeast Asian consumption of Japanese products especially in the content and creative industries. This trend has been propelled by initiatives such as the “Cool Japan Strategy” and the “Cool Japan Fund” which were introduced by the Japanese government in 2012 and 2013, respectively. These aim to leverage Japan’s cultural influence to stimulate demand for Japanese products and services. In Southeast Asia, the fund has supported various endeavours, including the opening of Japanese retail and dining outlets, promotion of Japanese content, and collaboration with local companies to co-create products that blend Japanese and local elements.

According to a public survey in 2023, the perception of Japan as “a combative nation” has significantly diminished among Southeast Asians, registering at only 4% whereas 88% positively appreciate Japan as a “peace-loving nation”.

A compelling illustration of this phenomenon is the success of Uniqlo clothing, Japan’s most valuable retail brand. Since opening its first Southeast Asian store in Singapore in 2009, Uniqlo has significantly expanded its footprint, and plans to quadruple its number of stores in the region within 10 years, aiming to reach the same level as in China. The Uniqlo story shows the potential of Southeast Asia as a driver for Japanese economic growth. Furthermore, Japanese pop culture – notably anime and manga – is in high demand among young Southeast Asians, with the Philippines, Vietnam and Malaysia being among the top five countries globally in terms of anime consumption. This has even given rise to “glocalised versions” of Japan’s cultural products such as hijab cosplay, Duterte anime and Doreamon tofu.

ASEAN countries are also popular destinations for Japanese people; more than 5.7 million Japanese tourists visited the region in 2019, a million more than in 2015. Singapore, Manila and Bangkok are among the top ten overseas destinations for Japanese travellers. With its cultural tapestry and beautiful landscapes, the region offers a wealth of experiences that are both distinct from and complementary to Japanese culture and nature. In recent years, there has been a growing presence of Southeast Asia delicacies in Japan. Another noteworthy trend is the increasing number of Japanese long-stay tourists or lifestyle migrants to Southeast Asia, particularly among retirees and young individuals seeking a better cost of living and a different way of life. There are over 200,000 Japanese nationals residing in Indonesia, Malaysia, Singapore, the Philippines, Thailand and Vietnam, accounting for 16% of the Japanese expatriate population worldwide.

CONCLUSION

Decades of nurturing connections between Japan and Southeast Asia have deepened their cultural and social bonds, laying the foundation for a more balanced and mutually beneficial relationship. Now more than ever, these people-to-people connections also provide the ballast for Japan’s soft power, given that its economic influence has relatively declined with the rise of other competitors, especially China and South Korea. Recognising this, the ASEAN-Japan commemorative summit in 2023 agreed to further the “Heart-to-Heart Partners” and “Partners for Co-creation of Economy and Society of the Future” initiatives, alongside “Partners for Peace and Stability”. The “heart-to-heart” and “co-creation” themes underscore a shift in the relationship between Japan and Southeast Asia towards greater reciprocity and equality. This is because the region is now becoming a centre of global growth and offers a large pool of human talent, creativity and entrepreneurship that can synergise with Japan’s needs. The recently revised Development Cooperation Charter guiding Japan’s ODA also highlights the imperative for “co-creation” of social values and new solutions with developing countries, based on dialogue, cooperation and equal partnership. Of note, Japan aims to bring back these values and solutions to Japanese society with a hope to spur its economy. Among those values, one of key significance to both Southeast Asia and Japan is the acceptance of foreign workers and a multicultural and inclusive community. This forward-looking vision marks the beginning of an important shift in Japan’s perspective, as it recognises the significance of Southeast Asia in fostering mutual growth and collaboratively addressing new challenges to its evolving society.

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This is an adapted version of ISEAS Perspective 2024/24 published on 3 April 2024. The paper and its references can be accessed at this link.