ABSTRACT
Japan, because of its constitutional limitations, had engaged with nations through economic activities of trade, investment and aid. It prospered by cultivating Southeast Asia and contributed positively to its regional growth. For Japan, changing optics of the current account from trade surplus to investment surplus necessitates crafting a sound economic diplomacy. Along with the traditional aid program, Japan enhanced its role in building an environment for foreign direct investment (FDI) and worked on creating a robust trade architecture. In economic parlance, a Free and Open Indo-Pacific (FOIP) translates into rule of law, freedom of navigation, connectivity and seeking peace and stability for economic prosperity. This chapter will look at the economic engagements that Japan is pursuing in this region through its trade, Overseas Development Program and FDI. These three arms of economic diplomacy tie themselves with the FOIP’s three pillars in addressing areas of economic prosperity, connectivity, capacity building and the rule of law to enable stability and prosperity.
