Thursday, August 15, 2013

Manila, Tokyo brothers in arms

Japanese Prime Minister Shinzo Abe and Philippines President Benigno Aquino agreed to comprehensively enhance the two countries' strategic partnership during last month's bilateral meeting in Manila. While the two sides have plenty of economic reasons for closer ties, a mutual desire to counterbalance China has widened the scope of bilateral relations.

Abe announced major initiatives after the meeting that will bolster Tokyo's alliance with Manila, including plans to advance maritime cooperation, enhance bilateral economic cooperation, extend a stand-by credit loan for Philippine disaster preparedness and assist the southern island of Mindanao peace process, among others.

While territorial disputes with China were among the regional security challenges discussed, Beijing's perceived threat is not the only pillar of the two sides' burgeoning ties. First established in 2011, the Japan-Philippines strategic partnership initially aimed to facilitate the exchange of goods, services, people and investment through the implementation of the Japan-Philippines Economic Partnership Agreement.

However, since the start of Abe's second term late last year (he previously held the office in 2006-7), maritime security cooperation has become a dominant feature of the budding relationship. Abe reaffirmed Japan's assistance for strengthening the Philippine Coast Guard by providing it with ten patrol vessels through a loan agreement. That assistance will go some way in bolstering the Philippines' claims to territories it contests with China in the South China Sea.

Stronger maritime cooperation with Japan is part and parcel of the Philippines' broader strategy of enhancing cooperation with allies to help compensate for its limited military capability and rising maritime insecurity. It likewise underscores Manila's determination to internationalize the South China Sea disputes and counter Beijing's insistence on bilateral talks rather than multilateral mechanisms to resolve the spats.

Aquino recently announced that the United States and Japan will be given access to the Subic Naval Base, a former US military facility that faces the South China Sea. The Philippines will thus play a key role in Japan's nascent defense strategy of deploying Marines and surveillance drones to protect its remote islands and broader foreign policy strategy of re-engaging the 10-member Association of Southeast Asian Nations (ASEAN).

The bilateral initiatives intend to project an image of a more dynamic relationship and deter China from its recent assertive moves in the East and South China seas, including a tense standoff with the Philippines last year over the contested Scarborough Shoal. However, the Philippines would be mistaken to consider Japan as a sufficient counterweight to China's military build-up, including significant outlays towards bolstering its naval muscle.

A raft of new patrol vessels and allowing Japan access to Philippine bases will not shift the balance of naval power in the South China Sea. Allowing the US access to Subic will undoubtedly have a bigger impact. The initiatives will, however, boost the Philippines' maritime domain awareness and help Japan monitor China's maritime activities and naval build-up.

To be sure, the revitalized strategic partnership is also being driven by economics. Abe and Aquino also pledged to bolster bilateral economic cooperation at a time both countries are undergoing an economic renaissance of sorts. Both have won international investor confidence through economic policies that combine fiscal stimulus with structural reforms.

Japan's economic revival will reply in part on developing more linkages with ASEAN's vibrant economies. As the fastest growing economy in the region, the Philippines is poised to win more Japanese business through its comparatively competitive investment incentives and friendly marketplaces.

Those both compare favorably with the frequent disruptions of Japanese business operations in China, including due to nationalist, anti-Japan protests. According to Japan External Trade Organization, the Philippines is currently regarded as the top profit center for Japanese firms operating in the region.

Meanwhile, Aquino has said Japan can be a major driver of future Philippine economic growth. His administration is increasingly turning to foreign direct investment (FDI) to drive the expansion of the country's manufacturing sector and achieve his public policy goal of more inclusive economic growth.

In 2012, Japan was the Philippines' top trade partner with roughly US$16 billion in bilateral trade. Tokyo was also last year the Philippines' leading source of official development assistance and the second-largest source of FDI.

Japanese investors are now actively courted, including during Abe's recent visit, to take stakes in Aquino's ambitious infrastructure development plans. Tokyo has poured significant aid into resource-rich but underdeveloped Mindanao, where the Philippine government has been negotiating a peace pact with the Moro Islamic Liberation Front rebel group.

While Aquino clearly views a final peace accord, expected to be concluded within this year, as key to his legacy, Japan has contributed significantly to the process through its development projects under the so-called Japan-Bangsamoro Initiatives for Reconstruction and Development, or J-BIRD.

The two sides have drawn closer despite their bitter history. The Filipino survivors of Japanese military imposed sexual slavery, commonly known as "comfort women", during World War II urged Aquino to raise their demands for an official apology from Abe.

However, Aquino did not raise the issue during their bilateral meeting and even suggested that the Philippines has moved on from its historic conflict with Japan. His government earlier stated that it would staunchly back a re-armed Japan shorn of its pacifist constitution to help counterbalance China in the Asia-Pacific.

The convergence of geo-strategic and economic interests has helped both countries overcome the bitter memories of the past and build a dynamic new strategic partnership. Since the end of World War II, the two countries have grown closer due to robust economic ties and more recently as brothers in arms against China's perceived threat to their security and interests.

Trajano is a senior analyst at S Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

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