H.E. Ambassador Junichi Maruyama is convinced that economic cooperation between Japan and Serbia has great potential, highlighting Serbia’s special qualities in terms of a highly educated workforce with competitive labour costs. Serving as a recommendation to future investors could also be the good experiences of Japanese companies that have already arrived on the Serbian market – from Japan Tobacco International (JTI), which was the first Japanese investment in the country, via the famous Panasonic to the latest cooperation in the city of Šabac, where company Yazaki has opened a production plant.The Japanese ambassador also confirms that his country remains a donor, as it has been recognised in Serbia since 1999, to secure stable society and sustainable development. Japanese donations to Serbia are today focused primarily on the development of the private sector and environmental protection, as well as healthcare and education, stresses Ambassador Maruyama.
The end of 2017 has been marked by U.S. President Donald Trump’s five-nation visit to Asia, where Japan was an important port of call. What were the key messages of this meeting?
– Prime Minister Abe and President Trump had fruitful discussions on various challenges being faced by the international community. Above all, the most important topic was the issue of the DPRK (Democratic People’s Republic of Korea). Both leaders took sufficient time to analyse the current DPRK situation and agreed on the way in which the two countries should move forward. Moreover, the two leaders also discussed Japan–U.S. bilateral economic relations. Both sides agreed to continue and deepen our dialogue, to revitalise trade and investments, and also to strengthen our cooperation in the fields of energy, infrastructure and law enforcement.
You will be serving as Ambassador to both Serbia and Montenegro, in a region that is regularly mentioned as a potential conflict flashpoint. How do you see the Western Balkans?
– I am aware of such a view of the Western Balkans that you mentioned. But my view of the Western Balkans is different. I would rather pay attention to the geopolitical importance of the region, which is uniquely located between Europe and the Middle East. Due to the geopolitical importance of the region, I am also confident that the EU integration of the Western Balkans contributes greatly to stability – not only of Europe, but also of the entire international society. Based on those ideas, Japan is actively engaged in this region and provides various forms of assistance. The January 2017 opening of new embassies in Albania and Macedonia demonstrates our commitment to this region.
How would you assess bilateral relations between Japan and Serbia at present?
– Our two countries traditionally enjoy cordial bilateral relations. We have seen some new developments recently, such as the visit by Mr Nakane, State Minister of Foreign Affairs, the contract signing for the first yen-loan project, worth €200 million, to install flue gas desulphurisation equipment for the Thermal Power Plant Nikola Tesla, the grand opening of Yazaki SRBIJA production lines in Šabac, representing the first greenfield investment by a Japanese company, and the contract signing between the City of Belgrade and the ITOCHU-SUEZ consortium on waste management using the PPP scheme. I am also glad to see an increase in the number of Serbian people practising Japanese martial arts and studying the Japanese language. However, coming back to your question, there is still room for development, and my goal as Ambassador of Japan is to further strengthen our existing relations.
I appreciate the Serbian Government’s efforts to improve the investment and business environment, including effective macroeconomic results, such as budget consolidation, which is praised by the international community
Despite good political relations, economic cooperation remains at a modest level. Your Embassy’s website also contains a message in which you state that you are convinced there is still plenty of room to further develop our relations in the domain of the economy and the exchange of human resources. Which areas do you consider as being the most attractive?
– First, I would like to stress that our bilateral economic exchange has huge potential. I would also like to add that Serbia has advantages in terms of attracting Japanese investments compared to the neighbouring countries in the region, due to its highly educated workforce with competitive labour costs. Having said that, I have to admit that investments from Japan to date have remained at a modest level, but I can see some promising new investments, like in the aforementioned case of Yazaki.
The Government of Japan is also keen to support such private sector efforts in various ways, including dispatching the Japan External Trade Organisation (JETRO) mission in June 2017. On the other hand, as a friend of Serbia, I would like the Serbian people to understand that efforts exerted by the Serbian side are also indispensable. Unfortunately, a lot of Japanese people are mistaken about Serbia’s current situation. Many Japanese people still think Serbia isn’t perfectly safe, due to the wars that the entire Western Balkan region went through in the 1990s. In that sense, the challenge for the Serbian side is to disseminate the correct information on Serbia to Japanese people for the purposes of erasing such a stereotyped image of Serbia. Please be assured that the Embassy of Japan in Serbia is always on your side and that we are more than happy to work with you, the Serbian people.
Company Japan Tobacco International was the first direct investment linked to Japan to arrive in Serbia after the year 2000. Can Serbia interest investors from Japan today, and in which areas do you see such opportunities?
– Japan Tobacco International, JTI, celebrated its 10th anniversary of doing business in Serbia last year, with then Prime Minister Vučić in attendance. I am glad to hear that JTI is broadly accepted here in Serbia, and that their business has been improving. It is great news that JTI also contributes significantly to the country’s budget, as the fourth biggest tax payer in Serbia.
I believe Serbia has a lot of potential to attract even more Japanese investors in the future. I have heard of some Japanese companies considering investing in Serbia, and also companies interested in Serbia’s geographically-favourable location and its quality labour with reasonable costs. Of course, it is in the hands of businesspeople who carry out deep and thorough analysis of new markets to make the final decision on their investment.
I appreciate the Serbian Government’s efforts to improve the investment and business environment, including effective macroeconomic results, such as budget consolidation, which is appraised by the international community, including the most important international financial institutions, such as the World Bank and the International Monetary Fund.
I am confident that further efforts will be exerted to bring new investments, such as improving the efficiency of the judicial system and extending the fight against the grey economy. I want to stress the point that present and potential investors seek stable and predictable economies, especially in terms of a reliable tax system.
There are now five Japanese companies that have factories in Serbia, and these companies employ nearly 3,000 local people. Their contribution to the Serbian economy is obvious when viewed in terms of JTI’s tax contributions and the amount of exports by Yazaki and Panasonic
How would you assess 2017 for the Japanese business community in Serbia?
– I think 2017 was a very successful year for the emerging Japanese business community in Serbia.
First of all, the Yazaki Corporation – a globally renowned Japanese company in the car parts industry – launched mass production at its first factory in Serbia, in Šabac, in June, and this is considered the biggest greenfield investment in Serbia. The company currently employs 500 workers, though it is planning to employ a total of 1,700 workers by the end of 2019. At the grand opening ceremony of the factory in September, President Vučić showed strong support to potential Japanese investments, which encourages us very much. This investment has sent a positive signal to attract potential Japanese investors to Serbia.
In September we witnessed the signing of the largest Public-Private Partnership agreement in Serbia, between the City of Belgrade and the ITOCHU-SUEZ consortium for constructing the new waste management system in Vinča. September also saw the consortium represented by Mitsubishi Hitachi Power Systems and ITOCHU conclude an agreement with the Electric Power Industry of Serbia (EPS) for the installing of a flue gas desulphurisation unit at the Thermal Power Plant Nikola Tesla.
ITOCHU has been very active in Serbia this year: it purchased about half the shares of the Master Fruits frozen fruit factory via its subsidiary.
We have had two brownfield investments by Japanese companies this year: Kansai Paints acquired Slovenian company Helios at the global level, adding its factory based in Gornji Milanovac to its portfolio of factories worldwide. Furthermore, Japanese company Hi Lex, producer of car window regulators, acquired a 100 per cent of the shares of Italian company Lames Group, including its factory in Sremska Mitrovica.
As previously mentioned, in June this year JETRO organised a three-day visit to Serbia for about 20 Japanese companies, in order to provide them with an in-field overview of Serbia’s investment potentials. The Japanese IT company that participated in this event actually started doing business in Serbia in November. I sincerely hope that this visit could bring more new projects in the future.
Panasonic is the second Japanese investor in Serbia, following JTI. And like JTI, Panasonic is already recognised as an example of a good investment in Serbia – not only from the business perspective and contributions to the development of the domestic economy, but also from the perspective of co-existence with local communities.
There are now five Japanese companies that have factories in Serbia, and these companies employ nearly 3,000 local people. Their contribution to the Serbian economy is obvious when viewed in terms of JTI’s tax contributions and the amount of exports by Yazaki and Panasonic.
We can hear about efforts of the Serbian Government to introduce dual education and a model of cooperation that would offer students and scientists a chance to cooperate with private companies and create mutual added value… Japan will seek a model to support your country’s efforts in expanding this cooperation
Japan is recognised in Serbia as a major donor, which is not surprising given that since 1999 assistance worth more than €500 million has been forthcoming. Statistics show that Japan directs most of its donations towards health and education. Can Serbia find an interest in the Japanese model that implies close cooperation between science and the economy, financed not only by the state but also by the private sector?
– Since 1999 Japan has been providing economic and technical assistance to Serbia in order to secure a stable society and ensure sustainable development, and also to promote Serbia’s efforts in its accession to the EU by using Japan’s advanced technology and experience. The main areas of assistance are based on three pillars: development of the private sector, environmental protection, healthcare and education. The total value of Japanese assistance to Serbia to date exceeds €500 million.
Certainly, cooperation between science and the economy is very important, and not only for Japan – given that scientific institutions continuously create additional value for the business sector. This consequently improves the quality of lives of the citizens in your country, and that is where we can see a fine line of mutual interests. This is definitely a model that all countries should follow, but it largely depends on economic strengths and the tradition of such cooperation in each individual country. We understand that Serbia’s economic development only recently started recovering, but it still remains at the level of 50 per cent of the EU average. Despite this, we can hear about efforts of the Serbian Government to introduce dual education and a model of cooperation that would offer students and scientists a chance to cooperate with private companies and create mutual added value. Companies also need to individually recognise their interests in cooperating with scientific institutions and the academic community, which, as I have already noted, would create a fine line of mutual interests for the benefit of your country’s citizens.
Japan will seek a model to support your country’s efforts in expanding this cooperation, and we will offer our vast experience to the stakeholders of projects.
There is great interest in Serbia for the scholarships that are granted for young people to study in Japan. Are you satisfied with the quality of applications and how do you see the future of scholarship students?
– Every year, the Japanese Ministry of Education, Culture, Sports, Science and Technology (MEXT) encourages foreign students wishing to study at Japanese universities – in courses such as the Japanese language, teacher training, undergraduate or graduate level studies etc. – to apply for MEXT scholarships. With this programme, the Government of Japan aims to foster human resources and for these people to become bridges of friendship between the grant recipient’s country and Japan, and for them to contribute to the development of not only the respective countries, but the world as a whole. When it comes to Serbia, we have around 50 highly qualified applicants every year, and the selection is very hard. However, we always try to choose candidates who will make an effort to promote relations between Serbia and Japan upon their return home by maintaining close ties with the universities they attended in Japan, and by cooperating on all relevant projects and events conducted by our Embassy.