Japan unveils Mekong aid package

The bulk of vehicles on Thai roads are Japanese. Source: Wikimedia

Japan wants to work with Thailand, Vietnam, Laos and Cambodia to improve infrastructure and bolster development with a 750 billion yen (US$7 billion) aid package over three years.

Foreign Minister Fumio Kishida was in Bangkok at the beginning of a week-long visit tour of the region.

“Japan would like to work with the countries of the Mekong region to create a framework to support efforts by the Mekong countries in a detailed manner,” Kishida said.

China has offered billions of dollars in loans to Asean members in recent years and Japan is obviously keen to keep up.

Kishida is also due to visit Myanmar, Laos and Vietnam.

He met Thai Prime Minister Prayuth Chan-ocha, who has moved closer to Beijing with infrastructural projects and joint military exercises since taking power in a May 2014 coup. China has been less critical of the junta’s dictatorial rule than Thailand’s traditional western allies.

Kishida and Prayuth discussed Thai politics, terrorism threats and economic challenges, a Japanese spokesperson said.

The foreign minister addressed maritime security and renewed a call for respect for the rule of law, in an apparent reference to the South China Sea dispute.

He called for an Asean code of conduct to arbitrate on the dispute between China and Vietnam, Brunei, Malaysia and the Philippines. Japan has a parallel dispute with Beijing over the East China Sea.

“We must establish a regional order whereby the principle of the rule of law is truly upheld and practised,” Kishida said in his speech. “I would like to renew my call for the early conclusion of an effective code of conduct in the South China Sea.”

Kishida also reiterated Japanese economic ties with Thailand.

Japan has historically been the largest investor in Asean’s second-biggest economy but Japanese investments in Thailand plummeted by 81 per cent in 2015. Analysts argue that this reflects fears about the struggling Thai economy under the prolonged junta rule.

Kishida told the media: “Thailand is a stakeholder that Japan cannot be without as many big and medium-sized Japanese firms from over 4,500 companies are based here.”

Japan still topped the list for foreign direct investment in 2015, with total investment exceeded 144 billion baht (US$4.1 billion).