Partnering with the Global South to Co-create Win-Win Situations

In a rapidly changing world, the Global South is making its presence felt

The term “Global South” is used collectively to include both emerging and developing countries, and the use of the term “South” is very interesting. Look at a map, and you’ll see that not all the nations of the Global South are located in the geographical south.

Why then do we refer to them as the South? I think this is because we have learned to think of the “North-South problem” and “South-South cooperation” in the context of world history, regarding the “South” as having been excluded from world development and as an area that demands serious attention.

Over the course of history, “South” became a concept signifying a disparity in economic status and rights within the international community that calls for correction—and this corresponds to that of emerging and developing nations.

Why is there so much attention on the Global South today? For one thing, its presence has grown enormously. According to the United Nations framework, the Global South comprises 133 of the 193 official UN member states (but does not include China).

By 2050, these nations are predicted to account for two-thirds of the world’s population. Economically, the Global South is expected to produce more than 30 percent of the world’s GDP—a percentage comparable to those of China and the United States today.

Secondly, the world situation is in flux. Following World War II, the economically developed nations of the world—exemplified by the G7—made key decisions regarding world governance and acted as its leaders. Today, however, the advanced nations face serious divisions within their own borders and struggle to focus on global matters. Looking toward the future, a system in which the advanced nations alone stand at the helm of global governance seems increasingly unrealistic.

Japan respects the diversity of nations and sees the Global South as “partners”

In considering the future of global governance, it is clear that the Global South has become a significantly larger presence on the world stage. Given its growing influence, it is essential to take this presence into account when assessing the international situation.

Japan has recognized these global changes and is making efforts to bolster its partnership with the Global South. Japan’s fundamental position is that it imports energy and food from Global South nations rich in these resources, and can continue to thrive as a nation only in a stable world. Therefore, it is necessary for Japan to actively engage in global affairs.

Even with regard to the sustainability of Japan itself in the future, it is important that we meet the Global South head on an equal footing and work together with them. The reality is that “Japan First” is not a viable approach.

In June 2024, the Japanese government announced a policy to enhance collaboration with Global South nations, highlighting an important shift in its stance. The key point was that it views these nations as “co-creative partners on an equal basis.”

As a peace-loving nation, Japan has refrained from forcing its values on other nations when cooperating in their development, and has been repaid with their trust.

In the future, Japan’s relationship with Global South nations will not be one of “we give” and “you depend on us,” but one where “partners” work together to create an economic community for the future, jointly identifying problems and working toward solutions. The benefits of this will extend to Japan, and I would like to say loud and clear that this will enhance its national interest.

India’s business environment has changed and a key factor is energy transition

In line with the Japanese government’s policy of boosting collaboration with the Global South, the Japan Bank for International Cooperation (JBIC) is undertaking projects tailored to the circumstances of individual countries and regions.

India is one of the countries with which we are most actively expanding collaboration. In the past, the central government and individual states often had different laws and systems, making it difficult to coordinate business deals and solve problems. As a result, even if businesses were established in India, it was difficult to generate profits. I myself had a number of frustrating experiences.

But the situation seems to be changing. Reforms under the Modi government have significantly improved the business environment, making India a country where it is easy to establish business partnerships, and a promising market.

An area of particular interest is that of energy transition—the shift away from fossil fuels toward sustainable new energy systems.

India has pledged to achieve carbon neutrality by 2070. This may seem far in the future, but my intuition—and that of much of the business world—is that India is ahead of any other country with regard to initiatives in energy transition. Alongside the development of renewable energy projects, private investment systems are being put in place to build power grids.

JBIC has been working these past ten years to establish an environment conducive to investment in this field, and we are finally seeing tangible results. For example, the National Industrial Corridor Development Programme (NICDC), a joint venture with the Indian government, supports industrial development across the country, with four industrial parks already built. One of these is powered by state-of-the-art green energy to attract the semiconductor industry.

Furthermore, the Japan-India Fund was established in cooperation with the Indian Government in 2023 to provide an investment platform for Indian businesses and projects relating to renewable energy, electric vehicles, and environmental conservation areas such as waste disposal and water treatment, as well as ventures that can work with Japanese firms. The goal is to foster innovation and collaboration between Japan and India.

By leading energy transition efforts and supporting the development of power grids and industrial parks, as well as innovation and collaboration, we have entered a phase where we can establish a multi-layered and co-creative relationship with India.

Following the AZEC concept in Southeast Asia and supporting individual nations in renewable energy

Energy transition is equally crucial in Southeast Asia, and also an opportunity to develop new industries.

The Asia Zero Emission Community (AZEC) proposed by the Japanese government is based on a “shared vision among Asian nations to press forward with decarbonization and work together to promote energy transition.” Based on this concept, JBIC has established platforms in individual countries for private and public entities to discuss the creation and promotion of renewable energy projects, and is involved in the management of those platforms.

This initiative is expected to create a huge market and attract new industries. At the same time, each country faces unique challenges. Our approach is to engage in direct discussions and co-create plans as partners.

We have held talks with leading actors in energy transition from both the public and private sectors in Indonesia, the Philippines, Vietnam, and recently Malaysia. We are now beginning to work on the financial aspect of providing Japanese technology and solutions.

South America holds great potential for development in resource acquisition and sustainability

I think South America presents significant opportunities for sustainable resource development, not only as a stable supplier of resources to Japan, but also as a region where Japanese technology can enhance sustainability. For example, the electrification of mining machines can add value in resource extraction.

In Chile, JBIC has added its support to a copper mine development project with Japanese investors, stabilizing the supply of copper. JBIC has also signed an agreement with Chile’s Ministry of Energy to promote cooperation in sectors using hydrogen and ammonia, thus cooperating with Chile on decarbonization efforts.

Beyond resources, Japan possesses advanced know-how in water resource management and efficient food production. Through such collaboration in these fields, we can engage in broader innovation-driven partnerships.

The Middle East and Africa face multiple challenges, but JBIC can make a difference in small-scale projects

Making inroads into the Middle East and Africa may seem difficult, but the world is already linked to these regions in many ways. In particular, North Africa’s proximity to Europe is expected to promote the development of clean, renewable energy supply networks, from which electricity can be exported to Europe.

Japanese companies continue to develop wind farm projects in Egypt, and JBIC provides financial backing. JBIC has also recently signed a memorandum of understanding (MOU) with Morocco to strengthen cooperation in energy transition and sustainable development.

Sub-Saharan Africa is rich in resources, but difficulties remain as to how the wealth from those resources can be distributed more widely and equally. Legislation and investment systems must certainly be established to develop the infrastructure needed for resource development and transportation. What is needed is a readiness to face these obvious problems with genuine seriousness.

In the small African nation of Benin, JBIC has provided loans for projects including solar power generation. This kind of support is impossible when misgivings about investment risks and return rates are prioritized, but numerous small-scale projects eventually lead to larger ones. We believe that JBIC should have a hand in projects such as these, which take time and are difficult for the private sector to take on.

As can be said for business development in the Global South as a whole, the key point is to strengthen partnerships with numerous financial institutions in the public and private sectors and to work in multinational collaboration.

We should take the numerous means of support available in the world and apply them at the necessary stages, arranging them where needed, and making breakthroughs in the way we collaborate. Rather than the old “all-Japan” way, what is needed here is the power to create and lead a global consortium.

Collaboration with the Global South will be a historical turning point for Japan

Global governance is a matter of fine-tuning our vision for the future of our planet, and the presence of the Global South is indispensable in that vision.

The role of JBIC is to be perpetually future-oriented and sensitive to changes in reality, to retain the image of what we want Japan to be in the long term, and to respond appropriately to situations in individual countries and regions. To accomplish this, we should continuously engage in serious discussion and keep in mind that speedy action toward solutions is the approach that will bring the greatest returns for Japan.

What should we do for Japan to continue to thrive and for the Japanese to live happily? We need to live in a stable world, but today we face the problem of how to keep the world sustainable and the importance of ordering our priorities to that end.

Japan is neither a country that merely “gives” nor “receives.” These things are bidirectional. I think we live in an era where we must think of creating a win-win situation through co-creation. I think that in a later age, people will look upon collaboration with the Global South as a huge turning point in the way Japan finds its way to live in the world.