Malaysia - Japan Ties: Worth a Second  Look

LOOK EAST POLICY 2.0

Malaysia - Japan Ties: Worth a Second Look

Japanese investors have been hesitant to invest in Malaysia in the past, reveals Ambassador Dr. Makio Miyagawa. Tun Dr Mahathir's revival of the Look East Policy might just be the investment tonic the doctor ordered.

“I recently heard from the new ministers that cabinet meeting starts on the dot now,” exclaims Dr Makio Miyagawa with a chuckle.

The Ambassador of Japan in Malaysia says this in a lighthearted manner; not a jab at former members of cabinet. What he was referring to was the wholesale change that has moved the political landscape and brought about a new discipline and urgency in government administration.

The Japanese are, after all, renowned as a society where punctuality is second nature.

For the last several years, the concept of the Look East Policy has been forgotten. The approach of the Malaysian government, vis-a-vis the world, is to take in money and expand its economic activities and to enjoy growth

As such, when talking about the revival of Tun Dr Mahathir Mohamad’s Look East Policy, Malaysia is not just looking to Japan to strengthen trade and investments but also for Malaysians to adopt the country’s esteemed ethics by encouraging knowledge, expertise and cultural exchanges between both countries.

But more pertinent is the policy’s principle goal. Version 1.0, when introduced by Tun Dr Mahathir in 1981, aimed for Malaysia to shift its focus away from the West.

Second time around, the reinvigoration of the policy is widely seen as a sign of a move away from China, which offered much needed funding to developing economies lured by prospects to become high-income nations fast.

“For the last several years, the concept of the Look East Policy has been forgotten. The approach of the Malaysian government, vis-a-vis the world, is to take in money and expand its economic activities and to enjoy growth.”

“But we wonder if the money that comes in could really help the capabilities of Malaysian industries? And whether the expansion and growth have lead to the strengthening of the foundation of Malaysian industries?” says Miyagawa, who has served in Malaysia for slightly over four years.

To put things into context, the former government in April revealed that Japan’s cumulative foreign direct investments in Malaysia is at RM71.6 billion as of 2017, compared to China at RM65 billion. Singapore, according to the report, topped investments into Malaysia; valued at RM116.3 billion.

Nonetheless, the contention is the foreign debt Malaysia has accumulated from its business transactions with other sovereigns.

And whether the nature of these investments would eventually benefit locals in creating employment and transferring of technology and knowledge to a certain degree; or if the investments were merely direct acquisition of key strategic assets in the country, funded by debt.

Malaysia’s debt, according to Tun Dr Mahathir, is almost 60 percent higher than previous estimates at one trillion ringgit. How much of it are foreign debt, and to whom it is owed, has yet to been revealed.

‘Our assistance is not simply to offer money, not simply to purchase lands or properties.”

In June, Tun Dr Mahathir picked Japan for his first trip abroad after taking office. During the visit, the prime minister and his counterpart Shinzo Abe emphasised human resource development through expanding Japanese education and strengthening youth exchange programmes. 

“Our government and private sectors have been inviting Malaysian youth to our nation to offer opportunities to study and to acquire values. Those students, when they return to Malaysia, have worked closely with the government to the increase levels of production and contributing to development of Malaysia,” says Miyagawa.

Our government and private sectors have been inviting Malaysian youth to our nation to offer opportunities to study and to acquire values

(This week, Tun Dr Mahathir made his second official visit to Japan, together with Education Minister Dr Maszlee Malik and Transport Minister Anthony Loke Siew Fook.)

The ambassador also did not mince his words over the hesitation from his country’s private sector in deepening investments into Malaysia previously, over concerns of rising political risks.

“The Japanese industrialists for the last several years hesitated to invest and hesitated to expand investments in Malaysia. I think this is due to political turbulence which got them worried," says Miyagawa, who observed similar pushback from other countries too.

“We looked at the statistics and found that that investments from Japan, European countries,America and also Singapore had stagnated over the last several years. This is very conspicuous.”

“But with the birth of the new administration, confidence has increased.” Miyagawa says that this is due to the government’s pledge to be more transparent in its governance.

“It is highly likely there are industries that will increase their investments in Malaysia because of the transparency and stability which they predict for the future of Malaysian economy,” says Miyagawa.

‘I think we are now in the right direction.”


AWANI Review spoke with the Ambassador Makio Miyagawa to get his thoughts on diplomacy. We start by asking him why he went into the diplomatic corp despite having trained in aeronautical engineering.

Miyagawa: I studied aeronautical engineering because I had thought (during high school) that resources on earth is getting limited and the population is increasing. At any time in the future, there will be a shortage of resources and we may have to go to new planet to find resources. That was my ambition as a child.

When I moved to Tokyo at 18-years-old, I entered university and studied spacecraft engineering. Then, I realised that the earth still had abundance of resources. The problem is that countries are fighting each other to grab and monopolise them. How can such resources be equitably distributed? It is based upon reason; not through fighting. So, I decided to go into diplomacy.

You’ve had over 40 years of experience in diplomacy and foreign affairs, having served in many different countries in your career including Malaysia, Switzerland and the United Kingdom. How has diplomacy changed?

Miyagawa: When I entered the foreign ministry, the world was still in a bipolar system; we had the East and West confronting each other.  In the early nineties, the Cold War ended but with some ‘residue’. For example, in the Korean peninsula. So, although the world has changed, stability did not come to fore. Before the end of the Cold War, the bloc leaders controlled its members (so as) not to fight within the bloc. Of course, there were some fightings. There were proxy wars between countries. But after the Cold War ended, the bloc leaders let the members go ahead to do whatever they like. The leadership control decreased. Quite inevitably, a lot of countries start fighting in the region. Internal strifes have started. So, the world has changed (as such).

Now, Japan has been growing very fast then, leading Asian nations. If you compare with the other regions like Africa and Latin America, Asia grew very fast. Before the Cold War ended (in 1991) there was a division of labor in G7. The United States and Canada were responsible for development in Latin America; Britain, Germany and France in Europe, Japan solely looked after Asia. Japan did very well. Our growth rate till the end of the eighties was good. But then, our economy was hit and injured and started to stagnate for almost 15 years. It started to resume par around 2012. Till then, we were ailing. Because of that, we were unable to provide enough assistance to nations. So, that has been our problem; our diplomacy had changed. We have to do our utmost but resources were limited. So now, our resources have started to come back, (we are) re-energized and is able to reach out again.

Among major powers in the region, Japan has enjoyed a rather positive image. What is the philosophy behind Japan’s soft power diplomacy?

Miyagawa: This has something to do with our philosophy of modesty. We were brought that we should not be boastful, that we should try to take a lower posture in front of others. So even in international community, our posture has been quite low profile. Even though we offer some assistance, fairly abundantly, we try not to play up (the fact). So, it may look that the Japanese, has so far has not been widely explained but I think the expansion is very potent. And I’m sure there are many people who understands the philosophy.

What more do you wish to achieve in your career?

Miyagawa: I would be very happy to go beyond the borders of Japan. I also would take a collaborative move with Malaysians, or even Southeast Asians, with whom we share values. Living here for four years, I do not feel that I'm living outside (of Japan). There is a sense of (Asian) identity that has been progressing very rapidly. Year after year, it has been strengthening. In the future, we may be able to claim we are Asians, like European Union. This my conviction. I would like to work towards it.

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