This is a background paper that was prepared for an event held at the Carnegie Endowment for International Peace on Japan and U.S. Perspectives on Southeast Asia Development.

Takashi Shiraishi
Takashi Shiraishi is president of the National Graduate Institute for Policy Studies and president of the Institute of Developing Economies-Japan External Trade Organization.

Three years have passed since Japanese Prime Minister Shinzo Abe came to power in December 2012. Over this period, he has done quite a lot on the security and foreign policy fronts.

The National Security Council (NSC) was established in December 2013 as the country’s security and foreign policy headquarters. A national security strategy was adopted, also in December 2013, to underline what Abe has called the country’s “proactive contribution to peace” and to deepen and expand the Japan-U.S. alliance in such areas as missile defense, maritime security, space security and cybersecurity, and disaster relief. The new defense program guidelines released along with the national security strategy emphasize a defense-posture buildup in the southwest region and give priority to maritime and air capabilities. The government also set out new principles for the transfer of defense equipment and technology in April 2014. The government decided to change the interpretation of Article 9 of Japan’s constitution in October 2014, and a set of national security laws was enacted in August 2015. New guidelines for defense cooperation were also agreed on between Japan and the United States in April 2014.

Prime Minister Abe has also been active in visiting and meeting his counterparts all over the world, especially Japan’s neighbors, with the important exception of its two immediate neighbors, China and South Korea. (Abe met with Chinese President Xi Jinping in November 2014 and in April 2015, and with South Korean President Park Geun-hye in November 2015.) Abe was the first Japanese prime minister to visit all the Association of Southeast Asian Nations (ASEAN) countries in a year. He also visited Australia, Bangladesh, India, New Zealand, and Sri Lanka in 2014. It is clear that there is a geographical focus to his visits in the region stretching from the Pacific Ocean to the Indian Ocean. Abe’s visits also underline the importance of political alignment and security cooperation, as well as rule making and norm making.

Looking at Japan’s foreign economic policy, under Prime Minister Abe Japan decided to join the negotiations for the Trans-Pacific Partnership (TPP), and a basic agreement was reached in October 2015. Japan has also begun negotiations with the European Union (EU) for a Japan-EU free trade agreement. The government decided not to join the China-led Asian Infrastructure Investment Bank (AIIB), for now. But the huge demand for infrastructure funding in Asia and the AIIB’s long-term strategic implications are well understood. Abe announced in May 2015 that Japan would provide $110 billion to the Asian Development Bank for the development of “quality infrastructure” in Asia.

A few important threads run through all these policy initiatives. Japan under Abe is responding to U.S. President Barack Obama’s rebalancing, both in security policy and in foreign economic policy, by deepening and expanding the Japan-U.S. alliance. Japan under Abe is also aligning itself with its partners and building a network for security cooperation, and in so doing Japan is expanding its regional focus from the Asia-Pacific to the Indo-Pacific.

It is understood that China cannot be contained, but Japan, together with the United States and its allies and strategic partners, continues to hedge against the risk that China may unilaterally attempt to change the regional order by force, while engaging China to build multilateral norms and rules as well as cooperate in areas that are mutually beneficial. China over the last six to seven years has done a lot—insisting on its core interests vis-à-vis its neighbors and the United States, becoming assertive on territorial and sovereignty issues, and deploying economic cooperation as a foreign policy instrument. Such actions prompt questions about what it wants to achieve and what the China Dream that President Xi Jinping talks about really means.

Regionally, the Japan-U.S. alliance remains the cornerstone of all security and foreign policy initiatives undertaken in Japan. The newly established NSC makes it easier to coordinate policy with the United States. The new national security laws, combined with the new Japan-U.S. defense cooperation guidelines, make the alliance more effective at promoting defense cooperation, not only for Japan’s national security but also for the peace and stability of the region. The TPP will strengthen and broaden the alliance further. Moreover, the U.S. commitment to the defense of Japan on the Senkaku Islands, as well as massive U.S. support and assistance in the wake of the earthquake, tsunami, and nuclear power accident in the northeastern part of Japan in 2011, enhanced public support for and the credibility of the alliance.

But the government under Abe has also promoted security cooperation with core countries in the Indo-Pacific region, especially Australia, India, and ASEAN states—Indonesia, the Philippines, and Vietnam in particular. It is on the Indo-Pacific region that Japan has staked its future.

It should be clear how important Southeast Asia is for Japan strategically. Japan has been committed to supporting ASEAN unity and providing assistance for ASEAN integration. Japan has provided major funding for the Economic Research Institute for ASEAN and East Asia since its inception in 2008. Japan has been active in economic cooperation—that is, providing official development assistance for infrastructure- and human-resources development and encouraging Japanese foreign direct investment (FDI). Japanese firms have answered the call by focusing their FDI on ASEAN countries.

It should be noted, however, that Japan’s economic cooperation policy has different political implications for mainland and maritime Southeast Asia. In response to China’s initiatives in north-south infrastructure development throughout mainland Southeast Asia with Kunming serving as the hub, Japan’s economic cooperation there is geared toward building highways from east to west, providing support for transborder production networks with Bangkok acting as the hub.

Japan actively promotes economic cooperation with maritime Southeast Asian countries, but equally important, Japan also has initiated security cooperation with maritime Southeast Asian countries and Vietnam. After the Japan-ASEAN summit in December 2013 at which Abe proposed defense cooperation, a Japan-ASEAN defense ministers’ meeting was held in Myanmar in June 2014 with maritime security and nontraditional security as two major areas for cooperation. Japan has expanded its cooperation on maritime safety, providing coast guard patrol ships to Indonesia, Malaysia, the Philippines, and Vietnam, and creating programs for maritime security and safety capacity building. Japan and Malaysia have also recently agreed to start negotiating a legal framework for the transfer of defense equipment and technology.

These initiatives are at least in part responses to current political and economic changes in Southeast Asia: a divergence in the strategic orientations now taking place between mainland and maritime ASEAN states, with Vietnam as a partial and important exception.

One change is economic: ASEAN’s mainland and maritime member states have adopted different economic development strategies. The rapid transborder infrastructure development in the Greater Mekong subregion requires mainland ASEAN governments to map out their economic development strategies in view of the subregional context.

The other change is security. There has been little progress in creating a cohesive security framework in ASEAN because of the crucial difference between those countries engaged in territorial disputes with China in the South China Sea and those without such disputes. The difference has become more pronounced lately due to China’s economic cooperation and its assertiveness in the South China Sea as well as the U.S. rebalancing toward the Asia-Pacific region. In terms of security, these maritime ASEAN states (including Vietnam) need to think about their security strategy in terms of both China and the United States.

Japan’s Southeast Asia policy needs to be understood from this perspective: supporting ASEAN unity and ASEAN integration, enhancing the value of ASEAN as a source of leverage for all its member countries, and supporting the ASEAN Plus processes as an important part of regional architecture building. At the same time, however, it is important to remember that powerful forces are causing a divergence in strategic orientations between mainland and maritime states, with Vietnam as a partial exception.

The future of Southeast Asia depends very much on two states currently adrift: Thailand on the mainland and maritime Indonesia. It depends on whether, how soon, and in what form political stability returns to Thailand, and on how effectively the current administration under Indonesian President Joko Widodo can implement its policy initiatives, in both the economic and security realms. Prime Minister Abe has been working to anchor Japan’s security and foreign policies in the Indo-Pacific region, and Southeast Asia is a crucial strategic partner for Japan. But at the end of the day, what matters are the grand strategic moves each Southeast Asian country adopts to adjust to the changing contexts of geopolitics and international political economy.