With a jealous eye on China’s growing influence, Japan is renewing its vows to Africa.
Japanese Prime Minister Shinzo Abe told African leaders gathered here for a summit on Wednesday that his government was determined to step up its engagement with the continent.
But with a rapidly aging population and a huge debt burden of its own, Japan won’t be writing any blank checks for overseas development aid anytime soon. It knows it cannot compete with China’s deep pockets.
Instead Abe hopes to harness Japan’s private sector, vowing to raise investment beyond the $20 billion that he said had flowed from Japan to Africa over the past three years.
“I make this pledge to you: The government of Japan will put forth every possible effort so that the power of Japanese private investment, of $20 billion in three years, should in the years to come be surpassed anew from one day to the next,” he said. “We will do whatever it takes to assist the advancement of Japanese companies into Africa.”
To some extent, Japan is hoping to exploit a growing sense in Africa that putting all your eggs in Beijing’s basket is not entirely wise.
Rather than competing directly, it has tried to differentiate itself from China by stressing the quality of the infrastructure it can build in Africa.
As concerns rise about Chinese state-to-state lending pushing African countries further into debt, Japan has stressed financial sustainability and private-sector partnerships that don’t raise government borrowing.
Where China brings its own workers across to build infrastructure, Japan says it employs locals and transfers technology to Africa, just as it has done across Asia.
That’s the theory. The problem in practice is that poor countries with huge infrastructure deficits often do not feel they can afford to pay for quality, while Japanese corporations are not exactly bursting with enthusiasm for Africa, officials admit.
Corporate Japan — notoriously cautious decision-makers — sees significant risks and relatively unattractive returns in Africa’s small and often fragmented markets, said Razia Khan, chief Africa economist for Standard Chartered Bank.
Japan’s trade with Africa, at $17 billion in 2018, is half what it was in 2008, and a fraction of China’s more than $200 billion, official figures show.
“It’s obvious with Japan’s declining budgets they don’t have the ODA [overseas development assistance] capacity to just be tossing out money, so they went to these public-private partnerships” said J. Berkshire Miller, a senior visiting fellow with the Japan Institute of International Affairs. “But the key question is whether the private sector can sustain this, and I think that’s challenging.”
To address that challenge, Abe pledged “limitless support” for investment, innovation, enterprise and entrepreneurship — by partnering with local financial institutions to establish a new trade insurance plan, for example.
He highlighted a Japanese satellite monitoring crop harvest and water resources in Rwanda, a Japanese business executive employing single mothers and former child soldiers to make colorful bags in Uganda, and a Japanese company laying the first undersea cable connecting Angola with Brazil.
He also highlighted Japan’s contribution to supporting health care and education in Africa, as well as cleaning cities of waste and clearing land of mines, while also announcing a project to train police officers, judges and prosecutors.
In return, Abe wants African support for an old idea and a new one.
The old 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,” he said.
The new one is support for Japan’s idea of a Free and Open Indo-Pacific, an idea of 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.
Abe said he wanted to work with the continent “to safeguard the Indo-Pacific, which connects Africa and Japan, with great care, as an international public good permeated by the rule of law.”
Miller said Japan was being careful not to frame the Indo-Pacific idea as a direct challenge to China, rebranding it as a “vision” rather than a “strategy,” and talking more about quality infrastructure than maritime security. That’s partly because it realizes African states do not want to be forced to choose between Japan and China, he said.
Abe spoke at the opening of the seventh Tokyo International Conference on African Development, known as TICAD, an event held every three years, and on this occasion staged in the port city of Yokohama, just south of the capital.
Khan says African nations welcome the idea of Japanese investment and see the advantage of not being “too reliant on one economic partner” — in other words, China.
“So the hope is that this time is different, that alongside yet another TICAD, we are going to get more meaningful follow-through on the back of it,” Khan said.
“But it is happening at a time of considerable uncertainty for the global economy. And one just wonders if that’s the environment in which corporates necessarily feel the impetus to take on a great deal more risk. There are question marks about that.”