Lecture No.7
The Japan–Malaysia Relationship:
Current Dynamics and Future Prospects

Noriyuki SHIKATA 

Ambassador of Japan to Malaysia

This imbalance is also observed in other ASEAN countries such as Indonesia and Thailand. Mr. Oya expressed the hope that more Malaysian companies would acquire equity in Japanese companies or build partnerships with them, particularly in the medical sector, and asked whether the Japanese Embassy or JETRO was taking action to promote Malaysian investment into Japan.

Amb. Shikata responded that Malaysian business people have already been investing significantly in Japan. He cited Berjaya Corporation, which has invested in Four Seasons hotels and acquired land in Yokohama and Okinawa for resort projects. Another company, YTL, has been investing in the resort of Niseko. Malaysian investors are increasingly putting money into Japanese resorts and hotels as travel destinations diversify beyond traditional locations like Kyoto. He also suggested future potential for Malaysian restaurants in Japan, noting the popularity of the Malaysian Pavilion at the Osaka Expo, where Malaysian cuisine attracted long queues. 

Amb. Shikata observed that Malaysia has successfully overcome, or is overcoming, the middle-income trap and is becoming an upper-income country, potentially eligible for OECD membership following Singapore and Brunei. He noted his support for Malaysia becoming an aid donor, which would create opportunities for Japan-Malaysia collaboration on health-related issues. As an example, he mentioned Takeda Pharmaceuticals’ dengue fever vaccine, which is approved in Malaysia but not in Japan due to the higher prevalence of dengue in tropical regions. He noted that the Japanese embassy has been collaborating with Takeda to promote the vaccine’s use.

A student from Myanmar asked about the current biggest issues facing the country. 

Amb. Shikata acknowledged the difficult domestic situation, noting that Japan has been supporting Myanmar’s economic development and democratization, but the military coup and subsequent junta rule have created deep concerns. The current political landscape makes it difficult for Japan to support sustainable economic development, and from Japan’s viewpoint, efforts to introduce democratic processes are needed. Japan has not sent a new ambassador under the current government, though it remains prepared to extend humanitarian assistance when opportunities arise, such as after the earthquake in Mandalay earlier in the year. He expressed the hope that Japan could contribute to the restoration of democracy in Myanmar.

Discussion on Energy Transition and Commercial Viability

Mr. Oya raised questions about the Asia Zero Emission Community(AZEC) initiative and the commercial viability of technologies such as the 100% ammonia combustion gas turbine. He noted that ammonia is harmful and costly to store, transport, and produce, but expressed anticipation at seeing Petronas as a partner, suggesting that ammonia could potentially be produced locally at low cost using Petronas’s coal or oil resources. He asked whether the Malaysian government was prepared to provide subsidies, whether carbon credits could be counted on, or whether external financing from institutions such as the Japan Bank for International Cooperation (JBIC) or international bodies would be needed.

Amb. Shikata explained that under the green transformation strategy formulated during the Kishida administration, the Ministry of Finance began issuing green transformation transition bonds for the first time, targeting green transition projects rather than general purpose projects. These bonds, to be issued over ten years in the order of 20 trillion yen, would be combined with private sector investment. The Japanese government examines private sector efforts and provides financial support for emerging technologies that may take 10 to 15 years to become commercially viable.

Regarding Malaysia specifically, he noted that states like Sarawak have huge hydropower potential, with discussions taking place on generating five gigawatts of hydropower. The challenge lies in utilizing this green energy effectively. While hydrogen requires much lower temperatures for transport, ammonia is easier to transport by comparison. Ammonia, traditionally used for fertilizer, requires treatment to avoid environmental issues but is regarded as less costly for transportation than hydrogen. Additionally, efforts are being made to convert existing coal-fired power plants to use 100% ammonia. Amb. Shikata emphasized that the Japanese government views all types of energy solutions as worth pursuing, with different pathways available. Nuclear fusion, while promising, will take longer to realize, but startup companies from Kyoto and Osaka working on fusion technologies are also worth supporting. Japan is working with ASEAN countries and Australia on these various approaches to energy transition.

(4) Presentation: Advice for Working on Policy Briefs and Working Internationally

Mr. Oya delivered a presentation drawing on his experience as former Director-General at the Asian Development Bank in charge of human resources and budget, his 37-year career at Japan’s Ministry of Finance, and his current role as Chief Economist at DeNA. He had also previously served as Alternate Executive Director for Japan at the World Bank from 2003 to 2006.

His first piece of advice concerned policy implementation. He urged students working on policy briefs to think beyond creating new ideas and consider how policies can produce actual results on the ground. Drawing from his experience with telemedicine projects in Asia, including ongoing work in Palau and the Philippines, he outlined three key considerations. First, check carefully how policy measures will be implemented, as reliable local partners are crucial and support from international institutions can make a significant difference. He noted that in small island countries like Palau, finding capable local partners is particularly difficult. Second, identify potential risks by reviewing the implementing agency’s capacity and the financial sustainability of plans, including who will fund them. Third, weigh the balance between potential risks and returns, then adjust the design accordingly, recognizing that good partners may reduce risks.

Mr. Oya’s second piece of advice addressed those wishing to work internationally, such as at the World Bank or Asian Development Bank (ADB). He shared a group photo of his diverse staff at ADB, comprising people from the Philippines, France, the United States, Pakistan, Korea, and Japan, with his deputy being Chinese. This diversity, he emphasized, matters greatly in international institutions.

Mr. Oya’s key message was to try to make a difference. Having interviewed more than 100 candidates for ADB staff positions over three years, he emphasized that candidates must demonstrate something they can do that others cannot. Without this differentiation, there is no reason to select one candidate over another. He suggested two approaches to making a difference. First, learn about various areas beyond one’s major, such as civil engineering, finance, and economics, which enables offering creative package solutions for Asia. Being digitally minded and able to discuss AI and semiconductors for 30 minutes would be a valuable weapon. Second, learn about foreign countries outside one’s home country, as respect for other cultures provides a good basis for collaborative teamwork. He reassured students that if they cannot make a difference now, nothing is too late to learn, and they have time to start the journey.

(5) Discussion

When asked for advice for international students wishing to work or live in Japan, Mr. Oya recommended learning Japanese but noted that students who can read Chinese characters have already cleared the first hurdle. He observed that many Japanese companies, including trading companies and the tourism industry, are keen to hire people with knowledge of engineering, semiconductors, and AI. Being digitally minded is valuable, and learning about the Japanese economy including market developments is useful. He cautioned against following market trends excessively, noting his personal view that stock prices in Japan and the US appear too high, and advised students to maintain their own priorities and believe in themselves. While semiconductor company stocks are rising sharply, students should focus on their own area of expertise first, then learn about additional fields such as digital technology, engineering, or economics.

A student questioned what specific skills Mr. Oya looked for when asking candidates to demonstrate something unique, given that hundreds of graduates hold the same qualifications. 

Mr. Oya clarified that he was not focusing solely on expertise areas. Language combinations can make a significant difference, as the ADB works with countries like Kazakhstan where Russian is spoken, and there are not many renewable energy specialists who speak Spanish, English, and Russian. Such combinations provide additional weapons in job applications. He also noted that learning economics does not take long and that understanding technical terms and jargon at a basic level is sufficient for interviews with international institutions.

Asked about his observations of recent students, Mr. Oya noted that while he lacks extensive teaching experience, he has visited universities in Japan, China, Germany, Georgia, and Italy for recruitment. He found foreign students at Japanese universities such as Kyushu, Nagoya, and Kyoto to be very keen to work for international institutions. In Beijing and Shanghai, students showed great interest in learning about the ADB, with dozens surrounding him after each session to ask questions. He offered to provide further help and advice about the ADB and World Bank Group to interested students. The session concluded with an invitation for students to visit DeNA as part of the course’s engagement with Japanese companies.