{"id":508,"date":"2017-02-24T14:49:13","date_gmt":"2017-02-24T14:49:13","guid":{"rendered":"http:\/\/www.jgrainger.com\/blog\/?p=508"},"modified":"2017-05-23T15:01:40","modified_gmt":"2017-05-23T15:01:40","slug":"japanese-government-business-community-give-strong-backing-to-macri-administration","status":"publish","type":"post","link":"http:\/\/www.jgrainger.com\/blog\/japanese-government-business-community-give-strong-backing-to-macri-administration\/","title":{"rendered":"Japanese government, business community give strong backing to Macri administration"},"content":{"rendered":"

Officials and analysts in Tokyo back president\u2019s attempts to open up economy yet fear midterms may weaken Let\u2019s Change leader\u2019s position<\/h4>\n
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Argentina President Mauricio Macri welcomes Prime Minister Shinzo Abe to Buenos Aires.<\/p><\/div>\n

TOKYO \u2014 Japan is ready and eager to re-engage with Argentina, with top officials and business experts predicting a sharp rise in trade between the two nations following Mauricio Macri\u2019s first year in office.<\/p>\n

In a series of interviews with the Herald<\/em> in Tokyo and Buenos Aires, officials from the Japanese government and business chambers representing the country\u2019s powerful firms offered President Macri\u2019s attempts to reshape Argentina\u2019s economy strong backing, predicting that bilateral relations between the two nations are entering a new era rife with opportunity.<\/p>\n

Japanese officials, diplomats, analysts and business representatives showered praise on the Macri administration, offering strong support for the president\u2019s 180-degree turn in foreign policy from the Kirchnerite era and hailing the president\u2019s desire to open up the economy and reshape Argentina\u2019s business environment.<\/p>\n

Yet many of those questioned expressed surprise that the economic turnaround had not been as successful as first predicted, highlighting instability, inflation and macroeconomic conditions. More than once, officials said they were waiting for the government to \u201cdeliver on its promises,\u201d and there was concern too that the forthcoming 2017 primaries and midterm elections could lead to fresh instability in the Let\u2019s Change coalition. Japanese officials said they would watch the results closely, in the hope that Macri can sure up his position and solidify his government\u2019s agenda. Many sources told the Herald<\/em> this week that Japan \u2014 and its business community \u2014 would simply \u201cwait and see.\u201d<\/p>\n

Illustrating the close attention paid to Argentina\u2019s internal affairs, some of those consulted in Tokyo expressed surprise over the departure of Alfonso Prat-Gay, Macri\u2019s former economy minister, who left his post at the turn of the year. Others spoke regularly of the fiscal deficit, feeling it should have been tackled earlier.<\/p>\n

Nonetheless, the view on Argentina was overwhelmingly positive, with the country now identified as a key market for Japanese firms in Latin America, as Japan looks to re-engage with the continent after a decade of slowing trade and growing Chinese influence on the continent.<\/p>\n

Officials acknowledged that the end of the so-called \u201cPink Tide\u201d in Latin America, with governments shifting to the right after a string of electoral victories, had opened doors for Japan, laying the groundwork for a new approach to the region, creating favourable conditions and opening up new opportunities for Japanese firms.<\/p>\n

The improvement in relations \u2014 coming off the back of a decade in which former presidents N\u00e9stor Kirchner and Cristina Fern\u00e1ndez de Kirchner forged close ties with China, as did a number of left-wing governments in the region \u2014 can be seen at the highest level and the two governments are taking steps to deepen their partnership.<\/p>\n

In May, President Macri will visit Japan as part of a two-leg visit also taking in China. That meeting comes off the back of a flurry of engagements between officials from the two nations. In May last year, Vice-President Gabriela Michetti visited Japan, a precursor to Japanese Prime Minister Shinzo Abe\u2019s visit here last November.<\/p>\n

Abe was accompanied to Buenos Aires by a number of top officials, business executives and support organisations, including the influential Japan External Trade Organisation (JETRO) and representatives from Mitsubishi, Bank of Tokyo, Toyota, Honda, Mitsui, NEC, the Marubeni Corporation and Nippon Signal.<\/p>\n

During that trip, Abe heaped praise on his Argentine counterpart, \u201chighly commending\u201d Macri\u2019s \u201cactive steps\u201d in transforming the country and branding his leadership \u201cextremely important\u201d for the wider region. The Japanese Prime Minister said he \u201cstrongly supported\u201d Macri\u2019s policies and formalised his backing in a joint statement with President Macri.<\/p>\n

The Argentine leader, in turn, called Japan a \u201cpriority country\u201d and praised the Asian country\u2019s business community and its progress on \u201cinvestment and loans.\u201d Both parties agreed to look toward new opportunities and said they would push to remove obstacles barring the entry of fresh Argentine beef and fruits to Japan.<\/p>\n

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Tokyo.<\/p><\/div>\n

\u2018Golden years\u2019<\/strong><\/h4>\n

Japan\u2019s current ambassador to Argentina, Mr Noriteru Fukushima, is in a good position to judge the new attitude between the two nations. Now restored back in Buenos Aires after an earlier, lengthy stint here in the 1990s, Fukushima has extensive diplomatic experience across Latin America. Eighteen months ago, he returned to Argentina as the tide turned for Japanese firms. He predicts big things are on the cards.<\/p>\n

\u201cThe next three (years) are the \u2018golden years\u2019 and we must utilise and make the most of the oppotunities,\u201d the ambassador told the Herald<\/em> this week, citing the growing strength of bilateral relations, as evidenced by Prime Minister Abe\u2019s visit to Buenos Aires, President Macri\u2019s upcoming trip to Asia and next year\u2019s G20 summit.<\/p>\n

\u201cWe have the two governments\u2019 goodwill to move forward,\u201d he added.<\/p>\n

From Toyko, Argentina\u2019s Ambassador to Japan Alan Beraud said he was in full agreement. He confirmed that his Embassy had been tasked with encouraging the Japanese business community to explore investment opportunities in Argentina and expressed his opinion that improved relations with Japan would deliver a clear sign to the rest of the global business community that Argentina was back on track.<\/p>\n

\u201cWe are trying to work and (we are) improving a lot, working with the political momentum … and it\u2019s happening,\u201d said Ambassador Beraud. \u201c(But) we are starting from a modification of our traditional relationship with the Asian countries. We had moved toward China (under the previous government), and focused on China, in a way that other countries had been left aside.\u201d<\/p>\n

For Beraud \u2014 who assumed his position last April \u2014 the government\u2019s charm offensive on Japan is a move that refreshes longstanding diplomatic ties.<\/p>\n

\u201cJapan was one of the traditional partners of Argentina for a long time,\u201d he continued, confirming that the Asian giant was a \u201cpriority country\u201d for the new government. \u201cBut this doesn\u2019t mean the other newcomers, the new partners have to be avoided!\u201d<\/p>\n

Longstanding ties<\/strong><\/h4>\n

Indeed, Japan\u2019s engagement with the wider continent is historical. Relations between Japan and Latin America date back to the late 19th century, when settlers from Asia first arrived to remote Amazonian outposts. While the vast majority of immigrants settled nearby Brazil and Peru, Japanese people arrived to Argentina in the form of labourers. Today, the Nikkei community in Argentina (Japanese emigrants and their descendants who formed communities in foreign lands) is more than 23,000-strong, according to statistics from the Association of Nikkei and Japanese abroad.<\/p>\n

Now, aided by EPAs with Mexico, Chile and Peru and its observer status with the Pacific Alliance, Japan is looking fondly toward Latin America once more. In 2015, trade with the continent totalled more than US$44 billion and with a more favourable political climate for the Japanese government, this figure looks set to grow even further. Prime Minister Abe has extolled his hunger to deal more with the continent, declaring a \u201cvigourous march forward\u201d was in the sights during a speech in S\u00e3o Paulo in 2014 and upgrading Argentina to a \u201cstrategic partner\u201d during his joint press conference with Macri in Buenos Aires last year.<\/p>\n

In the 1990s, a high of 120 Japanese firms were operating in Argentina. That figure slumped to as low as 54 at the end of the Kirchner years. But in the last year and a half, things have picked up, with 78 companies from Japan currently in operation here.<\/p>\n

Ambassador Fukushima is aiming higher. \u201cThere should be more than 200, even 300,\u201d he told the Herald<\/em> this week.<\/p>\n

A JETRO-led consultation carried out last year found that Japanese firms already in Argentina had a generally positive outlook on the business environment. Thirteen percent of firms based in Argentina who responded said they had increased their number of employees over the next year, while 21.7 percent expected to increase hirings next year \u2014 the third-highest in the continent after Mexico and Colombia. For Latin America in general, 14 percent of Japanese firms based in the region expected the same. Forty-three percent of Japanese firms in Argentina, meanwhile, said they expected to increase hirings of domestic employees in the coming year too, compared to 26 percent the year before.<\/p>\n

But while those numbers should cheer the Macri administration, the government needs assistance sooner rather than later. Ambassador Fukushima, while pointing out that macroeconomic conditions still need to improve, acknowledged the lack of \u201cconcrete projects\u201d in the works.<\/p>\n

How \u201cconcrete\u201d the promises of investment are is an interesting question. President Macri has faced criticism from some corners, who accuse him of overplaying promises of investment. So what\u2019s the reality of the situation today?<\/p>\n

Since December, investment from Japan totalling US$1.2 billion has been announced, Ambassador Fukushima confirmed this week, with the largest amount, some US$600 million stemming from the automobile giant Nissan, which will begin production on a new pick-up in C\u00f3rdoba from next year, with targets aimed at 70,000 units. That, the ambassador believes, is a clear sign that Japanese firms are ready to do business here again.<\/p>\n

But are Argentine firms as interested in Japan? In two separate meetings, representatives from the Japan-Argentina Business Cooperation Committee and the Japan Assocation of Latin America and the Caribbean (AJALAC) told the Herald<\/em> that while discussions between companies from the two countries were fruitful and productive, there needed to be a stronger commitment from larger Argentine firms to bilateral meetings. AJALAC members commented that business-to-business summits such as the Japan-Argentina committee often involved executives from huge Japanese firms such as Mitsubishi and Toyota, yet their Argentine peers represented smaller firms that operated on a different scale.<\/p>\n

Security and stability<\/strong><\/h4>\n

The most key issue at hand for Japanese firms it seems is security and long-term viability of any investment. Multiple sources consulted by the Herald<\/em> in recent weeks acknowledged that while there were a considerable number of projects that were intriguing in Argentina \u2014 including projects related to infrastructure \u2014 many could not be \u201cguaranteed\u201d by the national government, meaning Japanese banks were unwilling to back them, with Argentina\u2019s reputation for economic instability preceeding it. The \u201cstability\u201d of the Macri administration was regularly mentioned as a key consideration too as, inevitably, was inflation.<\/p>\n

Representatives from AJALAC \u2014 whose leadership is composed of ex-business executives, academics and former diplomats with extenstive experience of terms in Latin America, said that the Argentine government\u2019s efforts were set against a backdrop of years of neglect, unlike other nations in region.<\/p>\n

There were \u201cbig opportunities\u201d in Argentina, the leadership agreed \u2014 pointing to examples such as the Vaca Muerta shale formation in the north of the country \u2014 and though the government is important, any outreach needed to be backed by firms itself and the conditions for investment, naturally, were keen. While they backed Macri, they said, there was no proof that his political project would continue, only his desire to reshape the economy.<\/p>\n

In Brazil for example, they said Japan had been involved in huge projects under multiple governments, including the Workers\u2019 Party (PT) administrations led by Luiz In\u00e1cio Lula da Silva and Dilma Rousseff. The government was important, they said, but willingness must come from other areas too.<\/p>\n

\u201cOther than (President) Macri, we don\u2019t have any other partner (in Argentina),\u201d said Executive Director Akira Kudo, \u201cThe Argentine partners don\u2019t consider Japan as much.\u201d<\/p>\n

Fukushima, echoing the words of business lobbies and chambers consulted by the Herald<\/em> in Tokyo earlier this month, stressed the importance of a bilateral investment treaty, calling it \u201can important symbol.\u201d The treaty was brought up time-and-time again by specialists and its signing would help convince Japanese firms that the conditions were in place. Negotiations are ongoing, with the Macri administration said to be keen on signing the deal during his trip to Tokyo. Sources told the Herald<\/em> that, however, there were still issues that need to be resolved. The signing, they said, would likely come a month or two later than that.<\/p>\n

Yasushi Takase, the director-general of the Latin American and Caribbean Affairs Bureau at Japan\u2019s Ministry of Foreign Affairs, told the Herald<\/em> that while Japanese firms were financially prudent, taking time to decide on an investment, they were committed once a decision had been made.<\/p>\n

\u201cIn the case of Japanese firms, we have a good reputation that when we say we\u2019re in, we\u2019re in,\u201d said Takase. \u201cIt\u2019s easier for us to deal with (them). It\u2019s true,\u201d he said. \u201cEspecially with President Macri\u2019s government, now they have more interest in international affairs too.<\/p>\n

\u201cThe former government, in terms of diplomacy, was a bit ideological. Now, they\u2019re more neutral, modest\u2026 it\u2019s easier for us to talk to them too.,\u201d he added. \u201cMany, many businesses are interested in the new Argentina,\u201d he confirmed.<\/p>\n

The diplomatic willingness is there, on both sides, to enrich and deepen the ties between Japan and Argentina. But while those ties are obviously important, it will not be Prime Minister Abe or President Macri who will put their company\u2019s cash on the line. It is the firms themselves who will decide how deep the relations between the two countries will truly go. This year\u2019s midterms and the state of the economy look set to be the biggest influence on that in the coming months and years.<\/p>\n

@URLgoeshere<\/em><\/p>\n

This article was originally\u00a0published in the Buenos Aires Herald<\/span><\/a><\/span>, on Friday, February 24, 2017.<\/strong><\/p>\n

Link: http:\/\/www.buenosairesherald.com\/article\/224778\/japanese-gov%E2%80%99t-firms-give-strong-backing-to-macri-administration<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Officials and analysts in Tokyo back president\u2019s attempts to open up economy yet fear midterms may weaken Let\u2019s Change leader\u2019s position TOKYO \u2014 Japan is ready and eager to re-engage with Argentina, with top officials and business experts predicting a sharp rise in trade between the two nations following Mauricio Macri\u2019s first year in office. […]<\/p>\n","protected":false},"author":1,"featured_media":509,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53,215,38,216,37,100,55,391,99],"tags":[517,515,448,102,696,533,43,695,694],"class_list":["post-508","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-argentina","category-asia","category-buenos-aires-herald","category-japan","category-journalism","category-latin-america","category-politics-argentina","category-travel","category-world","tag-argentina","tag-buenos-aires-herald","tag-business","tag-government","tag-international-relations","tag-japan","tag-journalism-2","tag-mauricio-macri","tag-shinzo-abe"],"_links":{"self":[{"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/posts\/508","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/comments?post=508"}],"version-history":[{"count":2,"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/posts\/508\/revisions"}],"predecessor-version":[{"id":519,"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/posts\/508\/revisions\/519"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/media\/509"}],"wp:attachment":[{"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/media?parent=508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/categories?post=508"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.jgrainger.com\/blog\/wp-json\/wp\/v2\/tags?post=508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}