Abe upbeat on markets after Latin America trip

Abe upbeat on markets after Latin America trip
Japan Prime Minister Shinzo Abe.

Prime Minister Shinzo Abe was on his way back to Japan after promoting Japanese technology and products in five Central and South American countries together with about 70 Japanese business leaders.

Central and South American countries have gigantic markets, with a total population of 600 million and growing economies.

With the trip this time to Mexico, Trinidad and Tobago, Brazil, Chile and Colombia, the prime minister, whose foreign policy reflects a panoramic perspective of the world, has visited a total of 47 countries, including most of the major countries in the five continents, since the launch of his second Cabinet.

Abe stressed at a press conference in Sao Paulo on Saturday that he successfully developed market opportunities for Japanese companies in the region, a major aim of his latest trip abroad.

The prime minister also said Japan had agreed to cooperate with Mexico in oil development. Until now, only local companies have been able to participate in Mexican oil projects.

"A Japanese company is also likely to win a contract to construct a subway line in Sao Paulo," he said. "The top-level government involvement in sales [through this trip] has moved some specific projects forward, and I certainly feel a sense of achievement."

Abe considers exports of infrastructure and development of new markets by Japanese corporations crucial to the continued growth of the Japanese economy.

The economies of the five countries Abe visited this time are growing stably and are very attractive markets for Japan.

In Central and South America, there is a large demand for development of railroads and ports, and development of natural resources such as oil is also very active. For instance, Mexico plans to spend a total of more than ¥60 trillion (S$728 billion) in five years on development of infrastructure.

Among the 70 business leaders who accompanied Abe was Sadayuki Sakakibara, chairman of the board at Toray Industries, Inc., who also chairs the Japan Business Federation (Keidanren), and Akio Mimura, advisory honorary chairman of Nippon Steel & Sumitomo Metal Corp., who also heads the Japan Chamber of Commerce and Industry.

They joined Abe in his talks with leaders of the countries to promote Japanese technology and products together with the government.

When Abe held talks with Brazilian President Dilma Rousseff on Friday, the business delegation encouraged her to help Japanese companies win contracts to build very large floating structures known as megafloats.

In response, the Brazilian president reportedly said she welcomed the idea.

Japan and Brazil also announced a joint statement on technological cooperation in development of marine resources.

They also exchanged a memorandum of understanding on cooperation in the fields of medical and health care, which is expected to shorten the examination period for medicine and medical equipment manufactured in Japan when Japanese companies want to market them in Brazil.

In Mexico, which has the world's sixth-largest reserves of shale gas, Abe paved the way for imports of the country's natural gas to Japan.

In Chile, Abe attended the opening ceremony for Caserones Copper Mine, whose development was wholly funded by Japanese firms. It was the first time that Japanese firms had wholly capitalised an enterprise in Chile.

The mine is able to produce 180,000 tons of copper annually, equivalent to more than 10 per cent of Japan's annual demand.

Following in China's shadow

No Japanese prime minister in the past 10 years has visited countries in Central and South America. In that same period, China has intensified economic activities in those countries, considering them as sources for natural resources and food.

China is Brazil's largest trading partner and exports five times more goods to Brazil than Japan does.

After his inauguration in March 2013, Chinese President Xi Jinping visited seven countries in Central and South America last year and again this year.

During his trip in July, Xi announced huge aid projects in Brazil and other countries, flaunting China's enormous financial power.

Nonetheless, Central and South American countries still look at Japan favourably because a total of 1.8 million people of Japanese descent live in those countries.

The presence of Japan is felt overwhelmingly in Brazil where about 1.6 million ethnic Japanese live. China seems to be playing down its anti-Japan campaign there, although it continues to play it up in other countries.

On Saturday morning, his last day in Brazil, Abe offered flowers at a memorial monument for Japanese immigrants who died with no relatives in the country. The emigration of Japanese people to Brazil officially started in 1908.

"Trust built by six generations of people of Japanese descent is indeed the foundation of trust for Japan in Central and South Americas," Abe said in a policy speech after he visited the monument.

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