Talks focus on unprecedented growth in Japan’s trade with Latin America and the Caribbean, new opportunities for collaboration
Luis Alberto Moreno, President of the Inter-American Development Bank (IDB), met yesterday with Yoshihiko Noda, Prime Minister of Japan and Jun Azumi, the nation’s Minister of Finance, to explore new opportunities for trade and cooperation created by unprecedented prosperity in Latin America and the Caribbean (LAC).
Moreno visited Tokyo to launch the Japanese version of his recently published book, “The Decade of Latin America: A Real Opportunity,” and to exchange ideas with representatives of government and the community.
“I am deeply grateful for the commitment that Japan has shown to the development of our region and to the IDB,” Moreno said during his meeting with the Prime Minister. “It’s remarkable that only a few weeks after the catastrophic natural disasters of last March 2010, in the midst of attending the emergency, the government of Japan approved its contribution to the Bank’s Ninth General Capital Increase.”
Moreno also conveyed his hope that Japan would continue playing a vital role in Latin America’s near-term future—both as a commercial partner and a source of development assistance and technological expertise.
“Japan has high expectations for the role of the Bank in the LAC region contributing to poverty reduction and also in addressing global challenges such as climate change and disaster prevention,” said Prime Minister Noda.
During the meeting with Mr. Azumi, Moreno manifested his conviction that the growing dynamism of the LAC region represents a unique opportunity for Japanese companies as poverty levels continue to decrease and local markets continue to expand.
Between 2005 and 2009, Japanese exports to Latin America and the Caribbean increased by 34 percent—more than exports to any other region. During the same period Japanese imports from LAC rose by 26 percent, the second highest percentage increase in relation to imports from other regions.
“Japan will continue to support IDB and the LAC region,” Minister of Finance Azumi said. He added that Japan has been a strong supporter of LAC both directly and through the IDB. Japan has been the leading Asian donor to LAC for several years, and it is also the country that has recently made the most substantial contributions to the Aid for Trade initiatives.
Japan is the IDB’s oldest Asian Member, having joined the institution in 1976. Prior to the GCI-9 agreement, Japan had already contributed $5.05 billion to the IDB’s Ordinary Capital (OC) and $592 million to the Fund for Special Operations (FSO). As part of the GCI-9, Japan pledged to contribute $3.5 billion to Bank’s Ordinary Capital stocks and $31 million to the FSO. Japan has also provided more than $333 million to several trust funds administered by the IDB and helped create some of the most important tools available to the IDB, including the Multilateral Investment Fund (MIF). Japan contributed $547 million to the MIF, which promotes inclusive growth through private sector development and focuses on microfinance especially.
This collaboration has created multiple market opportunities for Japanese companies and consulting firms. In addition to the co-financing opportunities that allow Japanese financial intermediaries to better tap into emerging markets and diversify their portfolios.
Some of the IDB’s closest Japanese partners are the Japan Bank for International Cooperation (JBIC) and the Japanese International Cooperation Agency (JICA), which have jointly contributed more than $5 billion in co-financing to IDB projects in LAC.
“Japan will always find a strategic partner in Latin America,” Moreno said during the launch of his book, before an audience composed of ambassadors from IDB borrowing member countries to Japan, academic leaders and representatives of the business as well as government sectors. The event, co-organized with the Japan Institute for Overseas Investment, took place at JBIC’s auditorium. “The opportunities in LAC are real and present,” Moreno added, “but at the same time the competition for those opportunities is greater than ever.”
At a separate meeting, Moreno told a group of members of the World Economic Forum that there are noticeable gaps between the reality of LAC and Japanese perceptions of this reality. He said that the region’s recent achievements should lead people to view LAC from a different perspective, one that emphasizes its strengths, without necessarily ignoring weaknesses, and focuses on opportunities.
JBIC is the international wing of the Japan Finance Corporation (JFC) and is one of the largest bi-lateral financial institutions in the world. JBIC has recently launched the Global Action for Reconciling Economic Growth and Environmental Preservation (GREEN) to expand its activities to counteract global warming.
JICA, which administers the Official Development Assistance (ODA) of the Japanese government, is the world’s largest bilateral aid agency with operations in over 150 countries and regions and has some 100 field offices. The organization assists economic and social growth in developing countries and promotes international cooperation.
The Inter-American Development Bank is the largest regional development bank in the world. Established in 1959, it supports efforts by Latin American and Caribbean countries to reduce poverty and inequality while promoting sustainable, climate-friendly investment and development. In addition to providing loans to member countries, the IDB also provides grants, technical assistance, and research.
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