Kasit Piromya on Thailand-Japan Relations: Celebrating 136 Years of Diplomatic Success

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Sumo wrestlers at the ‘Siam Paragon The Wondrous Japan Heritage’ on July 3, 2023, celebrating 136 years of Thai-Japanese diplomatic relations and the 50th anniversary of Asean-Japan ties. Siam Piwat

If one were to review the enduring relationships between the world’s developed and developing countries to identify the most successful donor-recipient partnerships grounded in mutual respect, goodwill, and enduring friendship, the Japan-Thailand relationship would undoubtedly stand out. Amid the intense geopolitics of the Cold War era, Thailand, standing on the frontline against the looming domino effect, aligned with the free-world movement. Japan, stepping in as a dedicated and eager ally, played a pivotal role in assisting Thailand’s transition.

Japan’s technical assistance, soft loans, grant aid, scholarships, and direct foreign investments were critical to Thailand’s socio-economic development. These contributions were instrumental as Thailand transitioned from a commodity exporter and import-substitute industrial state to a thriving export-led economy, joining the ranks of regional “industrial tigers” alongside Japan, South Korea, Taiwan, and Singapore.

Thailand’s successful defiance of the domino theory, essentially a victory over the spread of communism, was largely due to its dual approach—military alignment with the United States and a robust economic partnership with Japan. Throughout the cold and tense periods of the Cold War, both nations shared similar worldviews, a common sense of purpose, and a united resolve to tackle development challenges and counter the expansion of communism.

The historical grievances and differences between Thailand and Japan were not erased but were carefully set aside in favor of moving forward together. This absence of historical baggage allowed both countries to foster a strong and warm relationship, further cemented by the close and personal bonds displayed by their respective royal families at both the personal and official levels.

During the nascent years of Thailand’s industrialization journey, Japan was a crucial player, making significant investments in their import substitution industries. By the late 1970s and early 1980s, as Thailand recognized the need to advance its industrialization, the West was simultaneously pressuring Japan to revalue the Yen to mitigate its competitive impact on Western industries. With rising labor costs at home, Japan found relocating its factories abroad to be a prudent decision.

As Thailand transitioned from import-substitution to export-led industries, Japan was perfectly poised to invest. To prepare for this shift, Thailand prepared a comprehensive white paper on restructuring the Thailand-Japan economic relationship in the early 1980s. This document served as the blueprint for negotiations, with Thailand demanding that Japan actively support their move towards export-led industries. A significant win for Thailand was securing open bidding for projects financed by Japan, irrespective of a company’s nationality.

This success story of Thai-Japanese cooperation continued for nearly two decades, spanning the end of the Cold War and well into the first decade post-Cold War, marked by impressive annual growth rates of about 8-13%. Meanwhile, global economic dynamics were shifting, with China emerging as a global manufacturing powerhouse and India stepping onto the global economic stage after shedding its socialist-oriented economic regime. Vietnam and Indonesia also became noteworthy players, with Vietnam embracing a market economy quickly and Indonesia leveraging its political stability, natural resources, and young population.

As these countries vied for larger roles in the global economic order, Thailand faced increased competition. Consequently, Japan found itself with a broader array of economic partnership options. In this evolving landscape, it became imperative for Thailand to re-evaluate and rethink its economic relationship with Japan. The automotive industry had been a cornerstone of Thai industrialization and Thai-Japanese industrial cooperation, but Japan’s focus on electric vehicles remained insufficient compared to China’s advancements.

The Thai automotive sector seemed to be in limbo, with minimal discussion about potential cooperation in green technology, biotechnology, or information technology industries. This state of uncertainty called for a new white paper to outline updated economic cooperation activities. Yet, there was a perception among the Japanese that Thailand’s interest was drifting towards China, partly due to a perceived lack of attention from Japan.

Compounding the economic considerations were significant political and security concerns. Japan’s economic health relied heavily on safe, free, and secure sea lanes, and threats from China, North Korea, and Russia were particularly alarming. In response, Japan increased its defense budget and invested in its arms industry with the intention of exporting, while reinforcing security alliances with the US, South Korea, Australia, and India. Support for the Philippines in its stand against China’s coercive actions in the South China Sea also highlighted Japan’s strategic focus. Japan even joined the UK and Italy in producing a new generation of jet aircraft and mulled over the AUKUS partnership involving Australia, the UK, and the US on nuclear technology.

From a strategic perspective, Thailand, unlike the Philippines and Vietnam, was not a frontline state concerning the East China Sea and the South China Sea. Instead, it was viewed as a hinterland, protected under the US security umbrella. With shifting regional and international political climates, Thailand had increasingly slipped off Japan’s strategic radar.

Therefore, it was incumbent upon Thailand to reassess and reposition itself, finding niches of activity that might be of interest and utility to Japan. The onus was on Thailand to understand and address the drifting apart of the two nations. But not all hope was lost. With their shared history, intelligence, friendship, and past successes, Thailand and Japan could undoubtedly find new areas for cooperation. It was a shared responsibility to maintain a thriving friendship and goodwill.

Kasit Piromya is a board member of Asean Parliamentarians for Human Rights (APHR) and a former Thai Minister of Foreign Affairs.