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Japan and South Africa: A Chronicle of 100 Years of Relations
Source: Polity
Source Date: Thursday, October 14, 2010
Focus: Information Access, Government Portal, Citizens’ Service Delivery, E-Government
Country: South Africa
Created: Oct 15, 2010

The aim of the Japan-South Africa centennial celebrations and the various cultural events that will be held throughout the year 2010 in both Japan and South Africa is to "promote people-to-people contacts and a better understanding of the two countries' respective cultures".(5) This discussion paper describes the various levels at which South Africa and Japan interact and covers trade and investment, aid, exchanges of peoples and technology, as well as co-operation between the two states in multilateral fora.

 

Trade and investment

 

Beginning with the export of South African wool and Cape wines to Japan in the early 20th century, bilateral trade between South Africa and the world's 3rd largest economy has expanded to a cumulative total of ZAR 60 million in 2009. Japan was South Africa's principal export destination during three of the past five years (alternatively: during 2005, 2006 and 2008). Bilateral trade volumes have been put under pressure by the global financial crisis however, so that Japan has dropped behind China and the United States (US) and is now South Africa's 3rd largest export destination and 4th biggest import source.(6) Trade between South Africa and Japan comprises a typical North-South pattern in that South Africa exports mainly base metals and agricultural products while the majority of imports from Japan consist of technology-intensive goods.(7)

 

The asymmetric nature of the above described trading pattern is also reflected in Japanese investment in South Africa and on the continent as a whole, with South Africa being the target of 40% of Japanese foreign direct investment (FDI) in Africa between 2002 and 2004. These investments and companies mainly cover the automotive, metals and chemicals industries.(8) To demonstrate, Nissan invested ZAR 1 billion in plant expansion and supply chain efficiency (i.e. enabling the company to acquire components from local sources); Suzuki Motor set up a joint venture to increase the efficiency of vehicle imports and distribution; and Mitsubishi Heavy Industries opened an office in Johannesburg as a hub from which they aim to expand their business into the sub-Saharan African region between 2008 and 2009.(9)

 

The disproportionate investment in the South African market as opposed to the continent elucidates that Japan recognises the country's role as a regional economic powerhouse or ‘hub', which may be utilised by Japanese firms as a springboard into other, smaller African markets, as well as an opportunity to revitalise Japanese firms and thus the ailing Japanese economy.(10) To this end, the ‘Japan-South Africa Business Forum' was launched in 2001 so as to further facilitate business relations between the two countries, as well as promote investment in the Southern African region.(11)

 

Economic and technical assistance

 

A cardinal cornerstone of Japan's foreign policy as applied to Africa is the Tokyo International Conference on African Development (TICAD), which was launched in 1993. As the world's 2nd largest Official Development Assistance (ODA) donor (with gross ODA amounting to US$ 16.5 billion in 2009),(12) Japan's economic assistance has taken the form of ODA loans and grants, as well as technical co-operation. Here, the Japan International Co-operation Agency (JICA), which grants ODA for the purpose of social and economic development, as well as governance-related issues, and the Japan Bank for International Co-operation (JBIC) are the predominant implementing agencies.(13) Since 2007, for example, JBIC has financed South African projects to the value of US$ 1.2 billion. These schemes cover, but are not limited to, vital infrastructural projects where export credit lines and loans have been granted to Eskom, Transnet, Standard Bank and the Development Bank of Southern Africa (DBSA).(14)

 

In addition, events such as the Japan-South Africa Partnership Forum are held regularly - the last one having taken place in 2010 and being attended by the Japanese Foreign Minister Katsuya Okada - and cover topics such as trade and investment, development co-operation and human rights, science and technology, and are ultimately aimed at strengthening strategic co-operation between Japan and South Africa. Under JICA, for example, technical assistance and skills development training are given to South African officials and parastatals.(15) Furthermore, in light of South Africa hosting the 2010 FIFA Soccer World Cup and aiming to move towards digital broadcasts, Japan offered its ISDB-T open-source system that allows for mobile television reception, as well as bi-directional information transmission. Moreover, both countries promote cultural exchanges - through its Japan Exchange and Teaching Programme (JET), for example, Japan has accepted around 340 South African youths to teach English in Japan since 1997.(16)

 

Finally, being the most energy efficient of the world's biggest economies (when plotted as energy consumption by GDP), Japan pledged US$ 15 billion in assistance to developing countries for adaptation and mitigation at the Climate Change Conference held in Copenhagen at the end of 2009. Although no fixed agreements have been reached as yet, a framework on co-operation covering energy, particularly renewable and nuclear energy, has been discussed between Japan and South Africa. (17)

 

Co-operation on multilateral issues

 

In addition to working together on issues related to climate change, Japan and South Africa collaborate on other international concerns, such as nuclear non-proliferation, human rights and the reform of the United Nations (UN).(18) The reform of the institutional framework of the United Nations and especially the composition of the Security Council is of particular importance to Japan, who argues that the current structure does not reflect the seismic shifts in political and economic power that have occurred within the international community over the past 60 years. Japan has thus been lobbying members of the UN to support an expansion of both permanent and non-permanent seats on the Security Council, to include developed, as well as developing countries, so as to ensure the UN's representativeness and thus relevance in the 21st century.(19) In addition, Japan has been attempting to rally support for its own bid to gain a permanent seat at the UN Security Council. Indeed, some critics assert that the Asian country is actively utilising its foreign aid policy and TICAD to entice African states into supporting Japan's bid - in exchange for economic and technical assistance.(20)

 

The validity of the above claim is questionable, however, as Japan has demonstrated reciprocity in supporting South Africa's bid for a non-permanent seat on the Security Council, which it held during 2007 and 2008.(21) Furthermore, considering that Japan is the world's third largest economy, is involved in several peace-keeping operations across the globe and contributes 20% to the UN budget (more than the United Kingdom, France, Russia and China combined), a seat on the Security Council is arguably justified.(22)

 

In conclusion, Japan and South Africa share close relations not only on a bilateral, but also on a multilateral basis. The close political relationship between the two countries has translated into economic and investment benefits. Though this has not yet reached its full potential, the foundation upon which to build a more beneficial relationship has already been established.

 

 

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