Speech by Dr. Kiyohiko Toyama, Vice-Minister (Parliamentary) for Foreign Affairs of Japan at the "MENA-OECD Investment Ministerial Meeting"

13-14 February 2006
Dead Sea-The Hashemite Kingdom of Jordan

(draft)

Thank you, Chair,
Your Excellencies,
Distinguished Delegates,
Ladies and Gentlemen,

1. Introduction

First of all, I would like to express my heartfelt gratitude to His Majesty, King Abdullah II bin Al Hussein, for hosting this historic meeting. I would also like to thank the Jordanian government officials and all those whose hard work brought this meeting into being.

I am honoured and delighted to be here, not only as a representative of the Japanese government but also as a private individual, because, as an academic specialising in international relations, I have come to this part of the world several times. I recall with fondness the discussions I had with my friends from across the Middle East on what the region's future might hold. The Declaration to be adopted today embodies a firm commitment to create an advanced investment climate throughout the MENA region. This is indispensable for the region's economic development and, both as a representative of the Japanese Government, and as someone who shares your dream, it is my real honour to join you in witnessing its adoption.

2. Importance of Investment

Ladies and Gentlemen

Investment is perhaps best described as "a trigger for economic development". Investment brings employment, new businesses, and promotes the transfer of new technological and managerial know-how to the host countries. In the long run, it thus makes the host country a huge winner.

To attract new and greater investment, one has to motivate investors with an inviting environment. Essential for that purpose is market liberalisation to encourage greater competition and lighter regulation. In other words, the free movement of goods, people and capital. A comprehensive policy package to accomplish this, including the development of human resources, is therefore needed to invite investment.

For the last three to four decades, in East Asia and South East Asia, private investment has played a significant role in enhancing economic development. At an early stage, people in these two regions recognised the importance of private investment and they designed their industrial policies to complement it. The two, policy and investment, worked in tandem, as it were. As a result, East Asia and South East Asia got the lion's share of foreign direct investment: From 1980 to 2004, out of the 2 trillion US dollars invested in developing nations, these two regions received more than 50%.

Now your turn has come. I believe the MENA region, where some of the world's greatest cultures and civilisations have existed for thousands of years, will also benefit from foreign direct investment for a better and brighter future.

3. Importance of Investment Promotion in the MENA Region and Japan's Contribution

(1) Importance of Investment Promotion in the MENA Region

The younger population is increasing rapidly in the MENA region. I believe that in any society, the best way to establish a better future is for young people to have the necessary skills and to work with the hope that tomorrow will be better than today.

Just prior to this Ministerial Meeting, I visited Dubai, where I spoke with government officials and Japanese business people working there. I also visited an advanced free zone, the Jebel Ali Free Zone. I am now convinced that the MENA region has great potential to become a favoured destination for foreign investment. You CAN attract capital, information and technology.

(2) Japan's Contribution

Ladies and Gentlemen

The Government of Japan has supported the efforts of Asian countries to promote their economic growth by providing ODA for infrastructure development. Japanese companies, by investing in Asian nations and thereby creating two million jobs, have also helped them grow. It is based on these experiences that the Japanese Government proposed a project, called "Investment for Development", at the 2003 OECD Ministerial Meeting. We are very pleased to see that the MENA-OECD Investment Programme is making good use of the outcomes from this project and that the Japanese initiative is contributing to the economic development of the MENA region.

Japan has been deeply involved in the MENA-OECD Investment Programme. From the time it was launched until April last year, Japan Co-Chaired the Steering Group meetings for OECD member countries. Japan also made a financial contribution of 230,000 euros to ensure the smooth start-up and implementation of the first phase of the programme. I am pleased to announce that Japan will continue its contribution for the second phase of the programme. For the Governance Programme, which is the other pillar of the MENA-OECD Initiative, Japan has made contributions both financial and in kind by providing 100,000 US dollars through the UNDP and Co-Chairing the programme's Steering Group meetings.

In Japan, my home country, it is said, "Stones do not make castles or walls, people do". This saying, taken from a famous 16th Century Samurai war lord, emphasises that human resources are essential for any society. In other words, a nation is like a castle, it can only be built by people. The people's hope is the strongest engine for nation-building. In today's context, it is important to improve infrastructures, industries and, most importantly, human capital to achieve the best possible synergy among the three.

Based upon this philosophy, Japan contributed 10 million US dollars to the International Finance Corporation (IFC) in order to support the MENA region's small and medium-sized enterprises. Also, to assist the region's efforts in tackling unemployment, Japan provided vocational training for 10,000 people and, last September, co-hosted a job workshop with the Jordanian government. In addition, for the MENA government officials dedicated to promoting investment, the Government of Japan has provided them with opportunities to brush up their skills by inviting them to Japan. May I also note that we have helped MENA nations financially to create basic infrastructures crucial to encourage investment, such as electric power and transportation.

4. Comments on the Ministerial Declaration and Expectations of Future Activities

Ladies and Gentlemen

The Ministerial Declaration to be adopted today is the historic culmination of MENA's ownership of this programme. Thanks to the involvement of a wide range of business leaders, the Declaration reflects many practical considerations,. It cherishes diversity, which is at the heart of MENA values. We respect the achievements of MENA leaders and wish to continue cooperating with them in their advance towards a brighter future.

In closing, it is my sincere desire that the MENA region will continue on the path towards economic development and become a symbol of its peoples' hope.

Thank you very much indeed.