Columns

Many Japanese companies keen on Sri Lankan market: Japanese envoy

12 May 2015 - {{hitsCtrl.values.hits}}

Following are excerpts of an interview with the Japanese Ambassador to Sri Lanka, Nubuhito Hobo.

The Prime Minister Shinzo Abe promised the most drastic reforms since the end of the Second World War. What are these reforms and how does it help raise Japan’s long term growth?
“Abenomics”, the “three arrows” revitalization strategy of Japanese economy is underway which led to a remarkable turnaround from deflation in three years since the inauguration of the Abe administration.

The average annual growth rate from FY2013 through FY2022 is projected to reach approximately 2 percent in real and 3 percent in nominal terms. The key is the “Third arrow”, a growth strategy, centering around i) restoring Japan’s earning power, ii) cultivating human resources, and iii) reviving long-idle industries and promoting entry of new participants. The 10 key reforms are : i) Enhancing corporate governance, ii) Reforms of public and quasi-public funds, iii) Promotion of venture business, iv) Corporate tax reform, v) Stimulating innovation through science, technology and a “Robotics Revolution”, vi) Enhancing women’s participation, vii) Attracting talent from overseas, viii) Reforming working practice, ix) Proactive agricultural policy, and x) Reviving healthcare industry and high-quality healthcare services.

Prime Minister Mr. Abe’s goal by 2020 is to raise by 5% the number of employed women age 25 to 44 to cope with a falling population and raise economic output. How can the government ensure it can achieve this target and also not run up against a demographic challenge?

The Abe administration started with securing additional childcare facilities and expanding childcare leave benefits to create an environment in which women can work while raising children.

The next set of measures are regarding creating an environment to encourage the promotion of women’s positions to executive and management level. It is aimed at increasing the promotion of women in management positions to 30 percent by 2020 in national and local governments and companies.

The third set of measures to be introduced is to revise tax and social security systems to be neutral with regard to how women choose to work. Actually, Sri Lanka played a role in this initiative of the Abe government by holding the Opening Ceremony of Shine Weeks during an exhibition of products manufactured by female entrepreneurs with participation of Mrs. Akie Abe, the Spouse of the Prime Minister of Japan in September 2014.

The government plans to push bold changes in the labour and one of them is to shift from a system in which graduates join a single company for life to one in which people can switch easily. How does the government plan to achieve this change?
Reforming working practices and attracting talent from overseas are at the core of labor market reform. Regarding the former, new measures are geared towards developing an environment where performance is evaluated based on achievement and not number of hours worked, and also towards diversifying employment models, and making working hours flexible.

As a part, initiatives are taken such as shifting subsidies to support outplacement and strengthening public job-matching facilities. As a whole, mobility is expected to be enhanced in the labor market in Japan.

The Japanese Government has a lot of debt, which stands at 240 percent of GDP. How does the government plan to reduce public debt?
The Abe administration was on target to reduce the primary deficit to GDP ratio by half from -6.6 percent in FY2010 to -3.3 percent in FY2015, and is moving as planned to achieve primary surplus by 2020.

There is a steady progress on the fiscal consolidation plan and streamlining expenditures. An increase of consumption tax to 10 percent in expected in April 2017.
In FY 2015, dependency on Japanese Government Bonds has declined to 38.3 percent. Therefore, the ratio of public debt to GDP is expected to decline steadily.

What is the current status of Japanese exports and FDI into Sri Lanka?
Japanese export to Sri Lanka drastically increased to 910.7 million dollars in 2014 from 203.3 million dollars in 2009. Japanese FDI to Sri Lanka also increased to 37.6 million dollars in 2013 from 19.3 million dollars in 2009.
Japanese investment to Sri Lanka has expanded to new sectors such as finance and logistics. Particularly since the visit by Prime Minister Shinzo Abe in September 2014, strong interests are shown by Japanese companies to enter into Sri Lankan market. I wish to see this positive trend continue.

How strong are Sri Lanka diplomatic relations?
Japan and Sri Lanka have over six decades of diplomatic relations grounded in shared values and historical ties over centuries.
Japan has over the years been a committed development partner that has supported Sri Lanka in achieving a remarkable progress in the area of socio-economic development, as well as in peace and reconciliation. The official visit of Prime Minister Shinzo Abe in September 2014 has elevated the bilateral relations to a new stage of cooperation in the context of the stability and prosperity of the Pacific and Indian Ocean regions.
I am confident that this partnership will continue to flourish under the leadership of the new President Maithripala Sirisena and the Prime Minister Ranil Wickremasinghe
.

What is the Japanese strategy of assistance for Sri Lanka?
Sri Lanka is the birth place of the 61 years history of Japan’s Official Development Assistance (ODA). Our assistance in Sri Lanka started in 1955, one year after Japan joined the Colombo Plan.
Sri Lanka has a geopolitical significance of being strategically located in the Indian Ocean sea lanes, with growing economic potential especially after the end of the conflict in 2009. Given the history of the conflict and the current state of economy , Japan has set 3 main pillars to its Country Assistance Policy to Sri Lanka, namely 1. Promotion of economic growth, 2. Development of emerging regions and 3. Mitigation of vulnerability.
First, with the aim of further enhancing economic development, Japan has provided active support to infrastructure development in the country which spans in sections including transport, energy and water. The important recent projects in this area include high ways, airport, bridges, hydro power plants, transmission lines and water supply facilities.
Second, Japan contributed towards rebuilding of the conflict affected Northern and Eastern areas in order to address regional disparity. Japan’s assistance in the emerging regions includes financing micro-finance programs to promote income generation, construction of socio - economic infrastructure – e.g. portable water supply system, irrigation facilities and rural roads, as well as capacity building of field level officers in charge of rural/community development.
Third, in mitigating vulnerability, Japan’s assistance in Climate Change and Disaster management are focuses on strengthening both structural and non-structural disaster management for prevention.

What is the role played by Japanese agencies in Sri Lanka?
Japan International Cooperation Agency (JICA) the implementing agency for Japan’s Official Development Assistance is working closely with the Government of Sri Lanka in line with the Country Assistance Policy just mentioned. During the past 60 years, JICA has provided various kinds of financial and technical cooperation, totaling about 1,000 billion Japanese Yen.
Japan’s annual assistance to Sri Lanka averages around 400 – 500 million Japanese Yen. In the area of technical cooperation, JICA dispatched nearly 1,000 volunteers to the country so far, in addition to experts of various professional fields. Currently, there are nearly 10 long-term experts and 80 volunteers working in Sri Lanka.

(The writer is a graduate in financial management from the University of Buckingham United Kingdom and a CIMA passed finalist.)

Columns

Many Japanese companies keen on Sri Lankan market: Japanese envoy

Most Popular Articles

Struggling Pizza Hut chain to be sold for $2.7bn

Iran war casts fresh shadow over Sri Lanka’s recovery

‘Two leaves and a bud’ becoming fiction as climate change hits tea: Dilmah Chief

Middle East conflict puts global spotlight on Colombo Port, World Bank tells government

Market stages strong recovery as ASPI surges over 740 points on renewed buying interest

Early rally fades as profit-taking leaves market mixed

Latest News

Which teams have qualified for the FIFA World Cup 2026 knockouts, round of 32?

Fuel price relief possible by August or September if global prices remain stable: Bimal

Three-month concession given for vehicles without seatbelts

Pakistan cuts petrol price by Rs74 after US-Iran peace deal eases oil costs

Iran closes Strait of Hormuz over ceasefire violations - MEHR