Cooperation with the Global South instead of a debt trap.
The Japanese government plans to invest more than 13 billion U.S. dollars over the next five years in expanding relations with the global South, the Japanese newspaper Nikkei (paywall) reported on Friday. On the one hand, this is intended to find solutions to the social challenges of emerging countries, such as reducing carbon emissions and digitalization, and, on the other hand, to improve relations with states, some of which have large reserves of raw materials. The Japanese Minister for Economy, Trade and Industry, Yasutoshi Nishimura, emphasizes that the project is profitable for all parties involved.
A similar project, albeit much more significant, is the Chinese “New Silk Road” infrastructure project. However, this is coming under increasing criticism because states that China connects to the trade network take out extensive loans and thus become indebted. As a result, dependence on Beijing and refinancing loans is growing.
Japan also heavily depends on the Middle Kingdom for critical raw materials for industry and the energy transition. This is probably also the motivation for the investments that have now been announced. Cooperation in “urban mining,” i.e., the recovery of raw materials from electronic scrap, but also in the field of digital technologies in medicine and education sound – at least on paper – profitable for the countries of the global South. It also wants Japan to play a more significant role in the production of green energy; to this end, the government has joined forces with the World Bank to establish the RISE (Resilient and Inclusive Supply-Chain Enhancement) initiative. Italy, Korea, Canada, and the United Kingdom have already joined the partnership (we reported).