Embassy in Malaysia – Makio Miyagawa, Ambassador
Japan invested a record sum of USD 23 billion in Malaysia since 1980. EnergyBoardroom talks to Ambassador Dr Makio Miyagawa about Japanese involvement in Malaysia and the country’s role in helping Malaysia achieve the goal of becoming a ‘high income nation’ by 2020.
This is the second round for you in Malaysia, after your first experience as the counsellor for political affairs/head of chancery at the Japanese Embassy 20 years ago. In your opinion, how has Malaysia evolved over these past two decades?
When I arrived in Kuala Lumpur six months ago to assume this post, I was amazed at how rapidly this country had developed since I was posted here twenty years ago. I badly missed old familiar houses and views in the same city. On the other hand, I feel relieved and glad to note that the relations between the two countries have remained very cordial and friendly as before and are ever thriving. In terms of trade, Japan is still one of the three biggest trading partners of Malaysia, and is the top investor to Malaysia. Prime Minister Abe successfully reinvigorated the economy of our country, which has revitalized investments inside and outside Japan. This has led to the growing of investment to Malaysia. In contrast with other countries in Southeast Asia, such as Thailand, Indonesia and the Philippines, Malaysia entertains political stability and is attractive to Japanese investors. The number of Japanese companies who have created partnerships with the Malaysian private sector has been increasing. We now have more than 1400 companies doing business actively in Malaysia in a variety of sectors and I look forward to seeing more of our companies join in Malaysia during my tenure.
Japan is currently Malaysia’s biggest investor, with over USD 272 million being invested last year. What makes Malaysia such an attractive investment proposition for Japan and what are the key areas of investment which Japan is looking at?
Malaysia has critical areas it needs to improve on if it wants to achieve ‘developed nation’ status by 2020. Malaysia has started to realise that it lacks sufficient industrial infrastructure, such as electricity, water, telecommunication networks, financial networks and public transport networks. As a result, these are the key areas where Japan and Malaysia can achieve co-ordination.
Japan has been Malaysia’s biggest investor for a number of years, and I believe the two countries will continue to celebrate this accolade.
Along with the clear economic benefits and investment opportunities which the Malaysian industry has long entertained through the partnerships with Japanese firms, there is also a cultural affiliation between the two nations.
Malaysians are very compassionate and hospitable people; many are Japanofiles. This makes doing business in the country and the region a pleasure for the Japanese industry, and also makes Malaysia increase the attractiveness as an investment destination from Japan.
You have now been the Japanese ambassador to Malaysia for roughly eight months. What does success look like to you as the ambassador in five years’ time?
My goals are to reinvigorate the bilateral relations and also facilitate long lasting and sustainable partnerships not only in business but also in diplomacy. Particularly, the business partnerships can flourish, specifically in areas such as infrastructure building, energy, high-technology, telecommunication and financial services, and transportation.
Malaysia has been growing at an annual growth rate of 5 percent per annum: its GDP per capita has just exceeded USD 10,000. It appears that Malaysia can quite comfortably achieve its goal to become a developed country by 2020. However, it is in danger of getting stuck in the middle income trap. One way to avoid this trap is to improve the industrial infrastructure, ranging from electricity, water, transportation, high technology, service networks. Our private and public sectors have accumulated experiences and a proven track record in those fields, and I would wish to see greater collaboration between our two nations to see Malaysia improve in these critical areas.
Secondly, I would also like to intensify bilateral collaboration in the field of security. Malaysia’s adjacent oceans such as the South China Sea and the Malacca Strait are key trading routes linking between Asia and Europe. These routes links Japan with Europe, Southeast Asia, South Asia and the Middle East. As a result, security collaboration of both governments should be very pertinent to ensure the sea lines of trade and communications remains safe and open.
There has been much Japanese interest in the Malaysian oil and gas sector. RAPID project, which is estimated to cost US 16 billion, has attracted the attention of Japanese companies such as Toyo Engineering and Itochu Corporation. Could you please elaborate upon the collaborative efforts between the two countries in the oil and gas sector?
Our business is in continuous collaborations with Petronas. Japanese companies, such as JX Nippon Gas and Oil Exploration, have a production sharing contract in place with Petronas. Greater co-operation and collaboration is highly expected and desired, specifically in exploration and production activities.
Rapid is another area of collaboration between the two countries. Toyo Engineering Corporation has been awarded a contract for a steam cracker complex project and Itochu are working in collaboration with PTT and Petronas on the development of several petrochemical downstream projects within the Rapid project.
Currently, 20 percent of Japan’s natural gas is imported from Malaysia. How will this relationship evolve over the coming years?
Malaysia currently exports over 60 percent of its LNG to Japan. For the time being, we rely on natural gas for half of our energy requirements. The reason for this is due to the Japanese nuclear power programme being temporarily suspended in the wake of Fukushima. Areas of energy collaboration may hopefully expand to joint exploration fields, as nuclear power plants resume operation in Japan and this exceptional high demand for LNG import to Japan subsides.
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