Japan-Thailand Relations and Japan's Foreign Policy
Policy Statement by Mr. Shiro Sadoshima
Ambassador of Japan to the Kingdom of Thailand
May 2015
1. Cooperation for High Added-value Industry
Thailand’s Gross Domestic Product (GDP) per capita has surpassed 6,000 USD owing to its remarkable economic development. On the other hand, because its unemployment rate is less than 1% and its labor force is expected to decline in the near future due to the low birth rate, the Thai economy could risk falling into the "middle-income trap", if the country continues to rely on labor-intensive and low value-added industry for its economic growth.
Transforming its industry into a high value-added one is essential in accomplishing an economic leap. Japan can contribute to this goal through a variety of measures. For instance, Japan would like to encourage more Japanese companies with high added value to come to Thailand, which is in line with the new investment strategy of the BOI. Japan can also offer its advanced technologies in such sectors as railways, highly efficient coal-fired power generation, blast furnace steelworks, information and communication technology, and space exploration infrastructure. Japan would also like to support wide-spread use and promotion of advanced medical technologies and instruments. Japan hopes that Thailand will make the best use of our technologies to move toward high value added industry.
2. Cooperation in R&D and Human Resources Development
Investment in research & development (R&D) and human resources are critical for achieving high value added industry. It is widely acknowledged that Thailand needs to strengthen investment in R&D and education. Japan can cooperate in this regard. Several Japanese automobile-related companies have established their R&D centers in Thailand. We will support these types of initiatives.
Recently many Japanese universities have established their centers in Thailand and cooperation between Japan and Thailand in the educational sector has been increasing. Japan would like to contribute to vocational training and skills development for backbone human resources, through backing up the long-standing Thai-Japanese Technology Institute, and supporting an improvement in Thailand's skills evaluation system. Furthermore, Japan would like to raise its profile in Thailand by increasing the number of Japanese language learners, examinees for the JLPT (Japanese Language Proficiency Test) and Thai students who study in Japan, and by expanding job opportunities in Japanese companies.
3. Cooperation in High Quality Infrastructure
As a result of rising wages in Thailand, the "Thai+1" movement, by which companies retain their high value-added manufacturing operations in Thailand while shifting their more labor-intensive operations to neighboring countries, is essential. If Thailand is to secure a central position in the AEC, especially the Mekong region, and if intra-regional specialization in manufacturing is to become more firmly established, high quality infrastructure will be needed in the surrounding region as well as in Thailand to enhance regional connectivity. Since Japan has an advantage in developing reliable, safe and environmentally-friendly infrastructure in line with users’ needs. We hope Thailand will make use of our technologies. Considering life cycle costs, infrastructure constructed with Japanese technology is more economical in the long term. At the bilateral summit meetings between Prime Minister Abe and Prime Minister Prayut Chan-o-cha, projects in infrastructure development such as modernisation of Thailand’s metropolitan and long-distance railways and development in Dawei were addressed as the most important agenda items. We will do our best in promoting them.
4. Cooperation in Improving the Business Environment
The economic ties between Thailand and Japan are very close and complementary. Japan has long been the biggest contributor in terms of foreign direct investment to Thailand. The members of the Japanese Chamber of Commerce in Bangkok now number over 1600. Thailand has already become the biggest investment and production base for Japanese companies in Southeast Asia. We are proud that Japanese investment has been playing an important role in the further development of the Thai economy. To maintain Thailand's position as an attractive investment destination, it is necessary to improve the business environment, especially ensuring transparency in customs procedures and relaxing regulations on foreign investment. Japan would also like to support the establishment of Japanese companies' regional operating headquarters in Thailand. Dialogue between the Thai Government and the Japanese business community in Thailand is critical, especially when reviewing institutional frameworks. We will continue to act as a bridge between the two sides.
5. Improvement of Consular Services in the industrial areas of the Eastern Seaboard
The Embassy is planning to establish a consular office in Chonburi province where many Japanese companies have been arriving in a steady stream to invest in the industrial areas of the Eastern Seaboard. In this province the number of Japanese residents has increased by three fold over the past 10 years. We would like to improve the business environment to support Japanese companies coming to the industrial zone through strengthening our Consular services in this region.
As "Team Sadoshima", the Embassy of Japan in Thailand will make its utmost efforts in addressing the above-mentioned challenges. I believe that in this way Thailand and Japan can further deepen our mutually beneficial relations for the future.