Japan-ASEAN Relationsin the New Era
Toward the Realization of a Sustainable Society throughCooperation and Co-creation

June 15, 2021

KEIDANREN

Table of Contents
1. Foreword ....................................................................................................... 2
2. History of Relation-Building between Japan and the ASEAN States ........ 3
3. Importance of Japan-ASEAN Relations in a Changing Global
Environment .............................................................................................. 5
4. Japan-ASEAN Cooperation and Co-creation in the New Era –Toward Building a Sustainable Society through a Balance
between Dynamic Growth and Resolution of Social Issues ..................... 6(1) Building Hard and Soft Social Infrastructure for Greater
Connectivity ....................................................................................... 7(a) Promoting the Building of High-Quality Infrastructure ............ 7(b) Improving Institutional Infrastructure ........................................ 8(c) Fortifying Global Supply Chains................................................. 10(2) Realization of Sustainable Growth.................................................. 10(a) Responding to Climate Change Issues ....................................... 10(b) Building a Society with Low Ecological Footprint..................... 11(c) Working on Disaster Prevention and Reduction ....................... 11(d) Promoting Cooperation in Medical and Healthcare Services ... 12(3) Using Digital Technology to Open Up New Growth Areas andRealize Society 5.0............................................................................ 13(4) Development of Human Resources.................................................. 15(5) Promotion of Personal Exchanges ................................................... 15
5. Conclusion – Deepening the “Heart-to-Heart Relationship” ................ 16
Appendix ......................................................................................................... 18

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1. Foreword
For over half a century since its inception in 1967, the Association ofSoutheast Asian Nations (ASEAN) has been a regional cooperation
organization that aims for economic growth and social and culturaldevelopment in the region 1 while expanding its membership. 2 The 10 ASEAN
member states each have their unique languages, racial mix, culture, climate,political systems, and other characteristics. This diversity is precisely what
renders the whole region even more fascinating. 3 The Japanese businesssector appreciates the ASEAN countries’ mutual respect for diversity andsolidarity as a community in their endeavor to achieve global prosperity andstability.
The ASEAN states are steadily achieving economic growth under their own
policies, giving full play to their strengths in agriculture, forestry, fisheries,
mining, and other primary industries; electronics, electrical machinery,automobiles, and other secondary industries; and logistics, finance, insurance,and other tertiary industries. In recent years, ASEAN has not only continued
its efforts to build infrastructure and attract investments; it has also stepped
up work to incorporate industrial digital transformation, the promotion ofstartups, and other policies in its growth strategies in its effort to nurturenext-generation industries to pursue economic development in the new era. 4
At the same time, ASEAN has also been working on the abolition of tariffs
within the region5 and institutional and physical economic integration based
1 The ASEAN Community was formed in December 2015, consisting of the ASEAN

Political-Security Community (APSC), the ASEAN Economic Community (AEC), and theASEAN Socio-Cultural Community (ASCC). Further integration has been promoted underthe ASEAN Community Vision 2025.
2 Ten members at present: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, thePhilippines, Singapore, Thailand, and Vietnam.
3 For example, there are 11 official and semi-official languages.
4 Such as Indonesia’s “Making Indonesia 4.0,” Thailand’s “Thailand 4.0,” and Malaysia’s“MyDIGITAL Initiative.” The digital sectors have rapidly penetrated daily life in the
ASEAN countries, as seen in the sharp increase in the number of mobile phoneregistration.
5 Under the ASEAN Trade in Goods Agreement (ATIGA), the first group of ASEAN
countries abolished tariffs in January 2010 and the second group in January 2018. This
marked the establishment of the ASEAN Free Trade Area (AFTA).

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on the Master Plan on ASEAN Connectivity (MPAC). 6 Furthermore, it is also
moving forward in pursuit of further growth for ASEAN as a community bygiving full play to ASEAN centrality 7 and taking such steps as conclusion of
economic partnership agreements (EPA) with countries outside the region. 8
While the current COVID pandemic has had a devastating impact on theeconomy and society, ASEAN maintains great potential to become the growthcenter of the world. 9 At the same time, with its economic development, theinternational community has also come to have greater expectations on
ASEAN to play a more active role in resolving global issues, such as climatechange.
Therefore, with an eye on the new post-corona era, it is now even more
important for Japan to make full use of the tangible and intangible assets it
has accumulated over the course of its economic activities to strengthen
cooperation with ASEAN, tap its vitality, and aim for mutual development
through the co-creation of new values.
2. History of Relation-Building between Japan and the ASEAN States
Japan is geographically close to the ASEAN countries. The Japanese
government and private sector have built partnerships and cooperative
relations with these countries for economic development and prosperity bybuilding social infrastructure, concluding free trade agreements, and otherinitiatives through bilateral, regional, ASEAN wide, and various other6 Announced at the 15th ASEAN Summit in October 2009 and drafted in October 2010. It

has three components: physical connectivity (transportation, telecommunication technology,energy, etc.), institutional connectivity (liberalization and promotion of trade, investment,
and services, etc.), and people-to-people connectivity (education, culture, tourism, etc.). The
joint declaration of the ASEAN Summit of November 2015, “ASEAN 2025: Forging Ahead
Together,” stated that strengthening connectivity remained to be one of ASEAN’s action
goals.
7 The goal of ASEAN centrality is to secure ASEAN’s presence and interests in regional
institutional frameworks participated in by non-ASEAN major powers.
8 FTAs between ASEAN and Japan, China, South Korea, India, Australia, New Zealand,and others. (There are also bilateral FTAs between ASEAN countries and these nonASEAN countries.)
9 While GDP growth in the 10 ASEAN states in 2020 was −2.5%, growth is estimated to be
3.1% in 2021 and 5.0% in 2022. (No estimate for Myanmar in 2022.) (Source: ADB, AsianDevelopment Outlook, April 2021)

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frameworks at different levels. 10
These activities over the years have contributed to social stability anddevelopment in the ASEAN countries and ASEAN as a group. Particularly
since the mid-1980s, Japanese companies have vigorously rolled out theirbusiness operations and expanded trade and investment relations with theASEAN states, which boast of such advantages as abundant labor force,
diligent people, potential for market expansion, and steady progress ininfrastructure construction. 11
Today, ASEAN is of pivotal importance for Japan’s manufacturing industries
as the core of their overseas production bases. One factor behind this is theexistence of an ASEAN-centered network of EPAs actively promoted by theregional group. Furthermore, the extensive network of global supply chainsencompassing the whole region not only contributes to its sustained growth
but is also the source of Japanese companies’ international competitiveness.
In addition, the non-manufacturing sectors are also actively expanding into
ASEAN, supporting the manufacturing industries through logistics, financial,
insurance, and other services, as well as meeting the increasing consumption
needs and domestic demand there.
Japanese companies doing business in the ASEAN countries 12 have advancedwith ASEAN on the path of economic growth while playing a significant rolein creating jobs and developing human resources. 13 Today, Japan and ASEAN
are inseparable partners bound by the strong bonds formed through thesecompanies’ business activities that have taken roots in the region.
10 Since the Fukuda Doctrine was proclaimed in 1977, for instance, the Japanese

government has strived to strengthen bilateral relations with the ASEAN states, as well as
worked for cooperation with ASEAN and the Mekong Region through summits, ministerialtalks, and other meetings.
11 Japan’s trade with ASEAN (imports and exports) in 2020 was approximately 20.4 trillion
yen, representing 15% of its total foreign trade (approximately 136.2 trillion yen). (Source:
Ministry of Finance of Japan, Trade Statistics of Japan) Trade structure has changed fromJapan’s processing trade to an increase in product imports from ASEAN in recent years.
Japan’s direct foreign investment in ASEAN totaled 2,290.6 billion yen. (Source: Ministry of
Finance, Balance of Payments Statistics [preliminary figures])
12 A total of 12,545 operational bases in the 10 ASEAN countries. (As of October 1, 2017;
Source: Ministry of Foreign Affairs of Japan, Annual Japanese Companies Survey)
13 There are about 200,000 Japanese living in the 10 ASEAN countries. Japanese companies
account for a total of over 2 million jobs in ASEAN. (Source: ASEAN-Japan Centre, ASEAN
Information Map)4

3. Importance of Japan-ASEAN Relations in a Changing Global Environment
The world is plagued today by numerous social issues on a global scale, suchas the spread of the COVID pandemic and climate change. On the other hand,
while advances in the use of digital technology have enhanced convenience inthe people’s life, certain unexpected social risks have also emerged. In
addition, many countries have taken protectionist measures, thus seriously
destabilizing the international economic order. 14
As we face a turning point in history, we must overcome these issues andrealize a sustainable society. Toward this end, multilateral cooperation andthe generation and implementation of new ideas that are not simply an
extension of existing ones are necessary.
With these issues in mind, Keidanren released “.The NEW Growth Strategy”
in November 2020, 15 asserting that in order to build a sustainable society, it
is important to make full use of digital technology to realize “Society 5.0 16 for
SDGs,” 17 a society that strives to achieve both economic development andresolution of social issues. This proposal pointed out that the key to thisendeavor is the co-creation of values with diverse stakeholders.
Japan and ASEAN have built an unshakable cooperative relationship for
peace, stability, prosperity, and development in the Asian region, withnumerous achievements in this respect. Building on this, both parties must
continue to bring together their strengths to drive the world economy andresolve social issues as one of the key players in the Asian region.
14 On global governance, see “Enhancing Cooperation for the Reestablishment of a Free andOpen International Economic Order” released in March 2021.
https://www.keidanren.or.jp/en/policy/2021/026.html
15 See “.The NEW Growth Strategy” released in November 2020.
https://www.keidanren.or.jp/en/policy/2020/108.html
16 Society 5.0 is the new society that comes after the hunting society (Society 1.0), theagrarian society (Society 2.0), the industrial society (Society 3.0), and the informationsociety (Society 4.0). It refers to realizing a human-centered society (super smart society)that maintains a balance between economic development and resolution of social issues
through systems for high-level fusion of the cyberspace (virtual space) and physical space(real space).
17 “Society 5.0—Co-creating the Future” issued in November 2018.
https://www.keidanren.or.jp/en/policy/2018/095_proposal.pdf

5Furthermore, ASEAN occupies a pivotal position as the cornerstone of theinternational community’s stability and prosperity in the context of Japan’s
concept of a Free and Open Indo-Pacific (FOIP). ASEAN also advocates its
own vision for the Indo-Pacific, “ASEAN Outlook on the Indo-Pacific”(AOIP). 18 The Japan-ASEAN Summit of November 2020 issued the “Joint
Statement of the 23rd ASEAN-Japan Summit on Cooperation on ASEAN
Outlook on the Indo-Pacific,” which confirmed that the AOIP and FOIP sharecommon basic principles and announced the strengthening of initiatives for
AOIP cooperation. 19 Therefore, it has become even more important for theJapanese business sector to further reinforce its cooperation with ASEAN,
which will remain an important partner under the free trade and investment
regime, 20 to co-create new values toward the realization of a sustainable
society and jointly open up a new era.
4. Japan-ASEAN Cooperation and Co-creation in the New Era – Toward
Building a Sustainable Society through a Balance between Dynamic Growthand Resolution of Social Issues
Striking a balance between the achievement of dynamic growth andresolution of social issues is required for building a sustainable society.
In order to achieve ASEAN’s dynamic growth, Japanese companies need topersist in infrastructure construction and active trade and investment in thediverse industrial sectors, as well as cooperate with ASEAN to engage in
responsive business activities that fully address the diversity and needs ofeach country, such as human resources development and technology transfer.
At the same time, Japan and ASEAN need to co-create and respond to social
issues common to both parties, including climate change, disaster prevention
and reduction, and medical and healthcare services.

18 The ASEAN Summit of June 2019 adopted “ASEAN Outlook on the Indo-Pacific” (AOIP)
as the regional group’s vision for the Indo-Pacific.
19 The Japan-ASEAN Summit of November 2020 announced the promotion of cooperation in
the AOIP’s priority areas: maritime cooperation, connectivity, SDGs, and economy.
20 It is necessary to promote the early implementation of the reform of the WTO, which forms
the core of the multilateral free trade regime, and rulemaking in various areas, including
regulations to ensure fair competition among member states. It is also important to promote
the conclusion of economic partnership agreements, investment agreements, social security
agreements, and other pacts to supplement the WTO.

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Promotion of digital transformation (DX) 21 is also essential for opening up
new growth areas. Japan and ASEAN should lead the world in realizing
Society 5.0 through collaboration with startups, offering digital technologybased solutions, and other initiatives.
Below are the five major areas where Japan and ASEAN must strive tocooperate and co-create in the new era.
(1) Building Hard and Soft Social Infrastructure for Greater Connectivity(a) Promoting the Building of High-Quality Infrastructure
Building social capital to enable the free movement of people, goods, capital,
services, data, and more is indispensable for realizing economic growth.
Together with the people of the ASEAN countries, Japan has utilized ODA for
projects to build infrastructure that serves as the foundation of economic
activities, such as roads, bridges, ports, airports, and electric power faicilities,
within these countries and in the East-West Economic Corridor, the Southern
Economic Corridor, the Maritime ASEAN Economic Corridor, and elsewhere,with the aim of improving the people’s livelihood. As a result, steady progress
is being made in infrastructure construction under the Master Plan on
ASEAN Connectivity (MPAC). 22 Japan is expected to continue to be involved
not only in infrastructure projects in each ASEAN state, but also in crossregional development programs.
The Japanese government and private sector have also been actively building
quality infrastructure. 23 Japan will continue to give full play to the strengths,
21 Digital transformation, i.e., fundamental and revolutionary transformation of society,industry, and life through advances in the utilization of digital technology and data, as wellas endeavors by industry, organizations, and individuals to make radical changes toward
revolutionary transformation. See policy proposal released in May 2020, “Digital
Transformation—Opening Up the Future through Co-creation of Values”
https://www.keidanren.or.jp/en/policy/2020/038.html
22 Such as construction of the Neak Loeung Bridge and repair of National Highway No. 9 in
Laos in the East-West and Southern Economic Corridors, and construction of major ports in
the Maritime ASEAN Economic Corridor.
23 The Japanese government announced in December 2020 its “Infrastructure Systems
Export Strategy 2025,” consisting of three main pillars: realization of economic growth7technology, experience, and knowledge of Japanese companies—including key
infrastructure that boasts of excellent life-cycle cost, environment-friendly
infrastructure, and adherence to construction and delivery schedules throughmeticulous project management—while addressing the needs of the ASEAN
region appropriately in its active effort to build infrastructure in thesecountries to serve as the foundation of connectivity. It will also contribute to
the enhancement and implementation of security operations to protect
ASEAN infrastructure from outside threats.
At the same time, Japanese companies will work with the government tosupport efforts to realign and diversify logistics routes and build a digitized
trade platform in the ASEAN region. 24(b) Improving Institutional Infrastructurei) Promoting a free trade and investment regime
The establishment of a free trade and investment system also forms the basisof efficient business activities. ASEAN has made steady efforts to create anenvironment conducive for trade and investment both within and outside theregion. It established the ASEAN Free Trade Area (AFTA) to liberalize tradein goods inside the region. It is hoped that the free trade and investment
regime in ASEAN will deepen further in the future under the ASEAN
Economic Community Blueprint 2025 (AEC 2025) 25 of the ASEAN
through improved industrial competitiveness by adapting to carbon-neutral and digitalchanges; contribution to the resolution of social issues and achievement of SDGs in the hostcountry; and addressing such diplomatic issues as the realization of FOIP through thepromotion of the export of high-quality infrastructure. The importance of building highquality infrastructure to realize physical connectivity was cited for the “pursuit of economic
prosperity” under the FOIP initiative. In light of the above, Keidanren also released its
policy recommendation in March 2021, “Towards Strategic Promotion of Infrastructure
Export, 2020.” https://www.keidanren.or.jp/policy/2021/028.html (in Japanese)
24 TradeWaltz, a platform for trade information sharing using blockchain technology jointly
launched by seven Japanese companies from different sectors to facilitate trade procedures,has begun operating. TradeWaltz’s Vietnam pilot to demonstrate the digitization ofcommercial transaction flow was chosen by the Ministry of Economy, Trade and Industry(METI) of Japan for its “Overseas Supply Chain Diversification Support Project.”25 The AEC 2025 consists of the following main pillars: a highly integrated and cohesive
economy; a competitive, innovative, and dynamic ASEAN; enhanced connectivity andsectoral cooperation; a resilient, inclusive, people-oriented, and people-centered ASEAN;
and a global ASEAN.

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Community Vision 2025. 26
In terms of forging relations beyond the region, in addition to concluding theASEAN+1 FTAs, ASEAN has served as the driving force in enhancing theregional competition environment and in international rulemaking byplaying a central role recently in the Regional Comprehensive Economic
Partnership Agreement (RCEP) process, from the start of negotiations to thesigning of the agreement in November 2020. 27
The Japanese business sector hopes that all RCEP member states will
undertake the ratification and effectuation procedures for this agreement assoon as possible. After the RCEP takes effect, it intends to continue to workwith the governments and relevant organizations of Japan and the ASEAN
states to actively apply this agreement in efforts to create a free and open
market and realize an international economic order. 28ii) Instituting legal systems for the realization of a transparent andpredictable business environment
Creating a transparent and predictable business environment is importantfor ASEAN to attract more foreign private investments in the region. This
will involve instituting various legal systems and systems related to publicprivate partnerships (PPP) for bringing in more private capital ininfrastructure construction, as well as upgrading the administrative
functions required to enforce these systems. While Japan has long cooperated
with the ASEAN states in enhancing various legal systems, it will need topersist in such efforts. In addition, proper management of sensitivetechnologies is indispensable for expanding international corporate activities
while maintaining security. Japan also needs to cooperate actively in suchinstitutional efforts.

26 Adopted in November 2015. The ASEAN Community Vision 2025 spells out visions inthree areas: ASEAN Political-Security Community (APSC), ASEAN Economic Community(AEC), and ASEAN Socio-Cultural Community (ASCC).
27 India’s early membership is sought from the standpoint of expanding trade andinvestment.
28 Modernization of customs is also important for free trade. As part of this effort, theNippon Automated Cargo and Port Consolidated System (NACCS) was introduced in
Vietnam and Myanmar.

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(c) Fortifying Global Supply Chains
At present, many Japanese manufacturing industries are building theirproduction facilities in the ASEAN region, which is a key hub of their global
supply chains. There are also a growing number of companies moving into
industrial parks that are equipped with logistics, utilities, andcommunication facilities, and other hard infrastructure necessary for
production activities, as well as soft infrastructure in the form of various
support services by management companies.

Natural disasters in the past have demonstrated the vulnerability of global
supply chains. The current COVID pandemic the world is experiencing has
given us an opportunity to rethink the structure of such global supply chains.
Ensuring their resilience has become an even more critical issue. Japanesecompanies will make the most of the quality infrastructure and institutional
infrastructure available in ASEAN to fortify the region as a key link in theirglobal supply chains.
(2) Realization of Sustainable Growth(a) Responding to Climate Change Issues
International cooperation is essential for responding to global issues such as
climate change. At present, steady efforts are being made toward achieving
the final goal of realizing a carbon-free society under the Paris Agreement,
the international framework on climate change. 29 Japanese companies aretaking proactive action to address climate change issues. 30 It is hoped thatthey will propagate energy, environmental, and digital technologies—such as
in the areas of energy conservation, renewable energy, nuclear power,
29 The Paris Agreement, the international framework for climate change issues from 2020,
took effect in 2016. Participants in the Climate Change Summit in April 2021 announced
their greenhouse gas reduction targets. The Japanese government declared its goal toreduce greenhouse gas emission by 46% from the fiscal 2013 level by fiscal 2030 and further
strive for a 50% reduction.
30 Keidanren is taking action on climate change issues through “Challenge Zero”(https://www.challenge-zero.jp/en/), and other initiatives. “The Commitment to a Low Carbon
Society” (http://www.keidanren.or.jp/en/policy/vape/LowCarbonSociety2017.pdf) will be
updated to the “Keidanren Carbon Neutrality Action Plan,” which will be promoted
vigorously.

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hydrogen, energy storage, and CCUS 31—and various advanced technologies
that may contribute to decarbonization in the ASEAN countries in a mannercompatible with local conditions. 32 It is also important to support suchendeavors with sustainable financing. 33
The Japanese government and private sector will hold active dialogue with
the ASEAN countries and cooperate with them in working for the realizationof a carbon-neutral world, including measures to be taken during thetransition period.
(b) Building a Society with Low Ecological Footprint
Positive action to tackle environmental issues, including the prevention of soil
and water pollution and conservation of forests, has become more importantin order to maintain sustainable growth in the region. Marine plastic waste,in particular, is becoming an increasingly serious problem in ASEAN thatneeds to be resolved. 34 The Japanese government and companies possess
excellent technology and knowhow in garbage collection, waste disposal, andrecycling systems. They are also knowledgeable about fostering garbage
sorting consciousness. They will cooperate with the governments of theASEAN countries to tackle this issue.
(c) Working on Disaster Prevention and Reduction
Japan has experience with numerous natural disasters such as earthquakes,
tsunami, typhoon and flooding from torrential rains. It has not only deployed
31 Carbon dioxide Capture, Utilization and Storage

32 Participants in the 16th ASEAN+3 Ministers on Energy Meeting in September 2019agreed on the Japanese government’s proposal on Cleaner Energy Future Initiative for
ASEAN (CEFIA) for government-private sector efforts to propagate low-carbon technology
in ASEAN and promote relevant policies and policy-building. Details of financial support
for decarbonization projects in ASEAN under the Asia Energy Transition Initiative (AETI)
were announced at the ASEAN-Japan Business Week in May 2021.
33 There has been an increasing number of ESG financing by institutional investors andfinancial institutions in projects for SDGs in ASEAN. For example, the Asian Development
Bank (ADB) has decided to earmark at least 75% of its annual financing contracts for
projects relating to climate change by 2030.
34 At the G20 Osaka Summit held in 2019, the Japanese government announced its plan tosupport capacity building in waste management and infrastructure construction in thedeveloping countries toward the realization of the “Osaka Blue Ocean Vision,” which aims
at achieving zero additional pollution by marine plastic waste by 2050.

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in society various technologies developed through collaboration between
industry, government, and academia, but has also broadly instilled a highdisaster prevention consciousness among the population, fostered throughsteady educational efforts. With natural disasters becoming increasingly
devastating in recent years due to climate change and other factors, it isnecessary to introduce disaster prevention and reduction technology andmentality in society at an early date and build society on this premise.
This is important even from the standpoint of fortifying the manufacturingindustries’ supply chains. For example, based on its experience and lessons
learned from past disasters, Japan has accumulated broad-ranging
knowledge and experience both in the hard aspect—such as sophisticatedflood control technology and earthquake-proofing and seismic isolation forbuildings, including public infrastructure—and the soft aspect—such as
disaster prevention-oriented urban planning, alert and evacuation advisorysystems during disasters, business continuity planning in preparation fordisasters, and logistics for assisting disaster victims—as well as financing,insurance, and other financial services to support speedy reconstruction.
Japanese companies will take the lead in sharing these assets with theASEAN countries facing similar risks of natural disasters 35 to bring aboutchanges in the people’s consciousness and behavior toward sustainablegrowth. They will work with the ASEAN states toward building a safe andsecure society that is resilient to disasters.
(d) Promoting Cooperation in Medical and Healthcare Services
Japan is one of the first countries in the world to become a super-aging society.
It is beneficial to share its experience and knowledge with certain ASEAN
countries that may become aging societies in the future. In addition topromoting more aggressive training of medical and nursing care personnel,building IT-based healthcare and medical service infrastructure using life
course data, AI, telemedicine, and so forth is an area expected to be in evengreater demand from now on. Japan and ASEAN will need to cooperate in
35 It is said that compared to other regions of the world, the Asian region suffered the worst

damages from flooding, storms, drought, and other water-related disasters between 1990
and 2019. (Source: The Asian Disaster Reduction Center [ADRC], Natural Disasters Data
Book 2019)12

such efforts. In addition, promoting the establishment of water treatment,
waste disposal, and recycling systems to improve basic public healthconditions is also necessary.
In light of the manifestation of supply chain risks in the medical sector withthe spread of the COVID pandemic, it is necessary to accelerate efforts toimprove supply chains of medicine, medical equipment, hygiene products, andrelated goods, cold chains for food and vaccines, and international
distribution systems, under the cooperation between the governments andprivate sectors of Japan and ASEAN.
(3) Using Digital Technology to Open Up New Growth Areas and Realize
Society 5.0
The global spread of the COVID pandemic reminds all of us of the importanceand potentials of digital technology. Therefore, there is great room forpartnership and collaboration between Japan and the ASEAN states, whichhave both set a goal of economic development and resolution of social issues
through the deployment of digital technology in society.
In particular, ASEAN is more advanced than Japan in the digitization ofsocial economic activities, such as e-commerce and ride-hailing applications.
Ambitious young people with exceptional business sense who are digitaltechnology-savvy are also starting new businesses, including in fintech one
after another. For sure, regions differ in social problems needing solution andservices required. In order to tap the vitality both inside and outside ASEAN,
it is important for Japanese companies to address these needs by taking theinitiative to collaborate with the thriving ASEAN startups and work withthem in the process of opening up and expanding global markets.
In this connection, in recent years, while Japanese companies have madeefforts to provide and utilize products, technologies, and services in the
ASEAN countries, there have also been cases in which ASEAN countries haveintroduced in society products, technologies, and services equipped withadvanced technology ahead of Japan. Sharing the success stories throughthese collaboration and management and maintenance knowhow therefrom
will enable Japan and the ASEAN states to roll out more products and13

services in both their markets and in third countries.
Japanese companies will also actively participate in promoting the use ofdigital technology in such areas as smart cities that offer solutions toenvironmental and energy issues and other urban problems; contactlesssolutions for the “with Covid-19” and “post Covid-19” eras based on biometricauthentication technology; and smart agriculture for high labor efficiency andproductivity.
Furthermore, there is an urgent need to build key telecommunication
networks using 5G that ensures highly reliable transmission of massive data,submarine cables, and so forth. In addition, with advances in digitization insociety, it is increasingly important to ensure cybersecurity. It is now
necessary to embed security features from the planning and design stages of
products when building social infrastructure.
Legislation of laws on cybersecurity, data protection, and other relevant
matters in the ASEAN countries is indispensable for secure and safeinternational commercial transactions. It is also important to work together
in making international rules on data use (Data Free Flow with Trust, or
DFFT), 36 taking into account compatibility with the protection of personal
information. 37 We hope for positive initiatives from the ASEAN states. We
also ask the Japanese government to cooperate with and provide positive
support to the ASEAN countries in addressing new issues brought about bydigitization, such as capacity building through joint cyber exercises andtraining of experts. 38

36 Prime Minister Shinzo Abe advocated “Data Free Flow with Trust” (DFFT) at the Davos

Forum in January 2019. An agreement was reached at the G20 Osaka Summit in the same
year. Singapore concluded Digital Economy Partnership Agreements on the promotion ofdigital trade, cooperation in fintech and other digital areas, securing cross-border data flow,
and so forth with Australia, New Zealand, and Chile in 2020.
37 Prime Minister Yoshihide Suga announced during a policy speech at the Vietnam-Japan
University in October 2020 Japan’s plan to promote stronger regional digital connectivity
with the ASEAN countries and DFFT-based rulemaking.
38 The Cabinet Secretariat, the Ministry of Internal Affairs and Communications, and METI
convened an ASEAN-Japan Cybersecurity Policy Meeting. Japanese companies are also
involved with system building and administering exercises at cybersecurity capacity building
centers for the ASEAN members.

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(4) Development of Human Resources
Japanese companies have long been deeply involved with the development of
human resources, which form the foundation of the ASEAN countries’ growth,
as a priority concern. The regional headquarters, branch offices, production
bases, marketing and service hubs, and other outfits of Japanese companies
doing business in the ASEAN countries serve as one of the main players inJapan-ASEAN personnel exchanges and human resources training. Somecompanies even set up and operate training centers to improve the production
techniques and other occupational skills of the local people. There are also
ongoing personnel exchange initiatives to send local employees for training or
temporary assignments at the main office in Japan, with the aim of grooming
these employees as future managers. Such corporate activities also contributeto nurturing talents needed for ASEAN’s autonomous economic growth. It isindeed the people that are at the heart of solutions to new social problems.
Japanese companies will persevere in their efforts to nurture talents for the
ASEAN countries’ growth in the next generation.
There has also been a steady increase in the number of students from theASEAN countries coming to study in Japan. Bonds developed as students
often become the starting point for building sustained relationships in the
future. It is necessary to further expand student exchange programs for the
younger generation in Japan and ASEAN.
(5) Promotion of Personal Exchanges
Japan and the ASEAN countries must continue to engage in active exchanges
at all levels, including cooperation between companies, governments andrelevant agencies, local governments, and educational institutions. 39 Japan
39 The Japanese government is promoting relationship-building between young people

through funding from the East Asia Youth Exchange Fund and other organizations. It isalso promoting international contribution through human resources development under theTechnical Intern Training Program. Based on the Japan-ASEAN Technical Cooperation
Agreement, the Japan International Cooperation Agency (JICA) offers training courses in“capacity building in policy formation for enhancement of measures to ensure cybersecurity
in the ASEAN region,” “port strategy management,” and other topics. The Japan External
Trade Organization (JETRO) conducts training to foster and upgrade skills of local
engineers. The international organization ASEAN-Japan Centre actively conducts
programs to encourage exchanges between students, youth, and female entrepreneurs.

15and ASEAN will also be celebrating the 50th anniversary of their relationshipof friendship and cooperation in 2023. We should make this an opportunity tofurther strengthen Japan-ASEAN cooperation. 40
In terms of tourism, which provides a great opportunity to develop interest inother countries, there has been a steady increase in the number of ASEAN
visitors in recent years 41 and a lively two-way exchange of visits. Although
this has been affected by the COVID pandemic, the presence of ASEAN
tourists enjoying their stay in various parts of Japan has become a part ofdaily life. ASEAN countries are also major destinations for Japanese tourists.
People from both sides have developed an interest in each other’s cities,
historical sites, rich nature, ethnic groups, religion, traditional and pop
culture, food and cuisine, and so forth. It is important to persist in efforts toenhance active personal exchanges, including the exploration and utilizationof new tourism resources.
5. Conclusion – Deepening the Heart-to-Heart RelationshipThe bonds between the people of Japan and the ASEAN countries fostered byour precursors over the years, that is, our heart-to-heart relationship, willremain an asset that forms the basis for partnership and cooperation underthe “with Covid” and “post Covid” new normal. We, the present generation,and young people with a bright future before them must continue to engage
in dialogue and exchanges at all levels in order to further deepen thisrelationship.
Keidanren has sent missions to the ASEAN countries and held joint
conferences and other meetings to engage in policy dialogue with thegovernments and economic organizations of these countries. 42 Keidanren is
40 For example, it is hoped that the Japan-ASEAN Integration Fund (JAIF), the Japan-East
Asia Network of Exchange for Students and Youths (JENESYS Programme), and the “WA
Project” will be expanded.
41 Against the backdrop of rapid economic growth, the expansion of the middle class, the
LCCs’ entry into the travel market, and the growing popularity of visits to Japan, there has
been a rapid increase in tourists from the ASEAN countries visiting Japan. There wereabout 3.4 million visitors in 2018, which is five times the number 10 years ago.
42 An annual Asian Business Summit (ABS) has been held by Keidanren and the economic
organizations of Asian countries since 2010. Lively discussions took place on economic andindustrial strategy in the “with corona” and “post-corona” eras, issues for cooperation in
Asia, and other topics at the 11th ABS (held online) in November 2020.

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currently providing assistance to talents for the next generation throughcooperation in the establishment of universities, the creation andadministration of scholarships, and other programs. Keidanren will continue
to engage in such activities. 43
We are confident that ASEAN will continue to play a central role in theeconomic development of Asia and the world in the new era. In order tofacilitate cooperation and co-creation between Japan and ASEAN to generate
new values, we would like to actively hold policy dialogues with thegovernments and relevant organizations of ASEAN and Japan toward therealization of this proposal 44 and move forward in our joint endeavor toachieve a sustainable society.

43 Keidanren cooperated in founding the Sirindhorn International Institute of Technology at

the Thammasat University, with the aim of training advanced technicians. It also offers
scholarships in Vietnam and Myanmar.
44 Keidanren plans to create a Sub-committee on ASEAN Economic Relations under theCommittee on Asia and Oceania and engage in policy dialogue with governments, economic
organizations, and other groups of each country.

17Appendix
We will engage in dialogue with the ASEAN countries and promote
cooperation and co-creation, focusing on the following areas:
1. Building hard and soft social infrastructure for greater connectivity(1) Building hard infrastructure Roll out quality infrastructure (building high-grade roads, bridges,
railroads, ports, airports, electric power facilities etc.)
 Continue to develop and operate industrial parks 45 that serve as thecore of regional industries
 Build infrastructure secured against cyber attacks
 Cooperate in building comfortable communities that tackle traffic
congestion and other urban issues(2) Building soft infrastructure Work for the early effectuation of RCEP, positive application of thisagreement, and India’s membership Capacity building for greater administrative efficiency andstreamlining Improve business environment, including the streamlining of central
and local government administrative procedures
 Facilitate trade procedures through digital trade platforms
 Use technology to improve logistics efficiency
2. Realization of sustainable growth(1) Realizing green growth Deploy Japanese companies’ technology and knowhow in ASEAN
45 Japanese companies develop and operate industrial parks in the ASEAN countries incooperation with the host country’s government. They adapt to local conditions andcontribute to regional development through job creation, technology transfer, and otherendeavors in these countries.

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countries
 Cooperate toward realization of a carbon-free society, including during
the transition period(2) Building a society with low ecological footprint Continue corporate activities that will contribute to tackling themarine plastic waste issue, preventing soil and water pollution,conservation of forests, and so forth 46(3) Working on disaster prevention and reduction
 Share knowledge and experience in dealing with disasters in both hardand soft aspects
 Support personnel training of disaster prevention
 Set up and promote financing, insurance, and other financial systems
to support speedy post-disaster reconstruction(4) Cooperation in medical and healthcare services
 Enhance personnel development in medical and nursing care service
 Build IT-based healthcare and medical service infrastructure using life
course data, AI, telemedicine, etc.
3. Using digital technology to open up new growth areas and realize Society
5.0(1) Cooperation with startups
 Create opportunities for Japan-ASEAN startup collaboration47
 Support building an innovation ecosystem linking Japan and ASEAN(2) Realizing a smart society

46 Reforestation, environmental beautification, and other activities in the ASEAN countries.
47 Keidanren holds matching events and other meetings in cooperation with JETRO andother groups toward establishing a global startup ecosystem.

19 Cooperate for the early effective deployment of 5G and Beyond 5G toserve as the foundation of a smart society and build key
telecommunication networks consisting of submarine cables, etc.
 Participate in the realization of smart cities through the deployment of
ICT platforms
 Implement contactless solutions for the “with Covid” and “post Covid”
eras using biometric authentication and other technologies
 Japan-ASEAN collaboration in international standardization
 Support cybersecurity personnel training 48
 Support deployment of system infrastructure based on “security bydesign”(3) Cooperation and participation in rulemaking
 Cooperate in making international rules based on the principle of data
free flow with trust
 Make rules in response to changes in society due to advances indigitization, such as in personal information protection
4. Development of human resources Nurture human assets not limited to acquiring skills
 Expand cooperation and student exchange programs between
Japanese and ASEAN universities
5. Promotion of personal exchanges(1) Promotion of tourism, etc.
 Revitalize local communities through the attraction of tourists
 Promote traditional culture, cuisine, pop culture, etc.
(2) Keidanren’s initiatives – holding policy dialogues

48 Invite administrative officials from ASEAN countries to Japan for cybersecurity training

under the Japan-ASEAN Technical Cooperation Agreement.

20 Create and conduct activities under a Sub-committee on ASEAN
Economic Relations, in cooperation with Committee on Asia andOceania Send missions to the ASEAN states to hold policy dialogues
 Exchange views with ASEAN states’ embassies in Tokyo

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