Romanian exporters need to be beyond reproach to access Japan

• Interview with Mihai Prundianu, the chairman of the Romanian-Japanese Chamber of Commerce and Industry

Reporter: What is the current stage of the relation between Romania and Japan?

Mihai Prundianu: Romania and Japan have a traditional friendship relationship. After the revolution of 1989, Japan has actively supported the democratization process in Romania and the switch to a market economy, and because of that reason it has been very deeply appreciated by the Romanian people. After the accession of Romania into NATO and the EU, Japan and Romania have tightly cooperated on regional and global matters, as important partners which share the same fundamental values, such as democracy or human rights. In 2009, there was the 50th anniversary of the resumption of diplomatic relations between Japan and Romania. On this opportunity, it has been mutually agreed that the bilateral friendly relationships should develop further. The principles which underlie Japan's foreign policy, according to Japanese PM Aso Taro, are "Diplomacy based on values" and "The Arch of Freedom and Prosperity", which are the political concepts which the Japanese PM enunciated in his official visit in Bucharest at the time when he was at the helm of the Japanese diplomacy and through which Japan will attempt to bring its own contribution to shaping the relationships with Romania.

Reporter: Japan is one of the countries which has granted the Romanian state several loans...

Mihai Prundianu: Japan is one of Romania's main economic partners in Asia, as it has massively supported, with financial and technical aid, the reformation process in Romania. Loans with 30-40 years of maturity have been granted for:

- the construction of the subway line Piaţa Victoriei - Otopeni, with a loan in yen which amounts to the equivalent of about 320 million Euros (which in the process of becoming operational, after the loan agreement was signed on March 10th, 2010, on the occasion of the official working visit of the Romanian president);

- the rehabilitation of the South-West segment of the 6th national road, costing 80 million dollars;

- the modernization of the Feteşti-Constanţa railway, which will cost approximately 220 million dollars;

- the rehabilitation of the Turceni thermoelectric plant (Groups 3, 4, 5 and 6), to the tune of 280 million dollars;

- the construction of the container terminal in the Constanţa Sud port, through a loan of 120 million dollars.

I have to emphasize the need to boost the economic partnership, which is currently far less significant than what the economies of the two countries would allow. A hurdle to the development of the bilateral economic development comes from the differences between the two countries from a cultural, functional, social, economic and political point of view.

Reporter: What actions is the Bilateral Chamber of Commerce taking to expand the cooperation between the two countries?

Mihai Prundianu: The Romanian-Japanese Chamber of Commerce, through its strategy, has planned to gradually eliminate this barrier and to become a bonding factor which would promote the cooperation between the two countries. We want to familiarize the Romanian investors with the Japanese environment, with the Japanese social and business practices, with all the "protective" norms and mechanisms imposed by the Japanese market, and at the same time to promote our national values in Japan. Our expertise in the relationship with Japan has made us understand the importance of the cultural approach in the development of the bilateral relationships. That is why, on the agenda of the Chamber for this year, aside from the specific economic activities, we have included several events intended to bring Japanese and Romanian culture to the foreground, and why not, merge them into the most pleasant and attractive manner possible.

Reporter: How did the Romanian-Japanese relations evolve lately?

Mihai Prundianu: Last year's tragic events have placed Japan at the forefront on an international level. Japan's international approach has been extended to cover the human and social side, which has intensified the continuation and the development of the bilateral human relations. The Romanian-Japanese Chamber of Commerce has come to the aid of Japan through a fundraising humanitarian concert called "Give Hope", for the population which was affected by the disaster. It is amazing how successful they were in mobilizing and overcoming the effects of the disaster, setting an example for the entire world, not just for us. Another piece of good piece of news for us was also the decision of the Japanese government that Romanian citizens would be allowed to enter Japan without a visa for trips lasting up to 90 days, which facilitates the cultural relations between Japan and Romania.

Reporter: What is the total amount of Japanese investments in Romania?

Mihai Prundianu: Japan has really made its presence felt in the Romanian perimeter, with the Japanese capital invested in Romania exceeding 300 million dollars. In 2011, there were 19 Japanese companies (a total of 24 plants) which have invested in Romania. According to the latest statistics of the Japanese Finance Ministry, the main areas of investments are the car industry (TAKATA-PETRI, "Yazaki" România, "Calsonic Kansei", "Fujikura Automotive" România), tobacco (JTI), drugs ("Terapia" - which has a research base in Romania). Other projects with Japanese investors include: the rehabilitation of the DN6 national road (Craiova - Timişoara); the modernization and the rehabilitation of the Bucharest - Constanţa railway; the installation for the desulphurization of the exhaust gas of the Turceni Energy Complex; the rehabilitation of the Işalniţa Thermoelectric Plant; the rehabilitation of the Paroşeni Thermoelectric Plant; the installation for switching to inert gas (The Brazi Vest thermoelectric plant).

Reporter: What investments do we have in Japan?

Mihai Prundianu: Over the last five years, the level of Romanian investments in Japan has gradually increased, but it is not as big as we want it to be. The level of exportable resources is very high, but the strategy for penetrating the Japanese market is not well implemented. Japan has an extremely well regulated economy and like I said, we need to learn the norms and regulations imposed on the Japanese market. The ones who have the necessary resources to export to Japan need to be first of all receptive to the needs of the Japanese. It is a extremely important factor in order to allow success. I am going to give you a concrete example: you can't export Romanian "palinca", since they do not drink strong spirits, and we can't export sizable furniture, like we are used to, to a country where the homes are extremely tiny and the available space is more than limited and very well organized. The Romanian exporter needs to convey the image of a safe and reliable company, competitive, resolute, capable of innovation and reaching superior quality, beyond reproach, to promptly and professionally answer to all the demands of the Japanese business environment. In spite of all this, we have areas in which we have successfully entered the Japanese market: clothing and accessories, raw materials, wood, chemical products, drugs, cosmetics, wines, IT.

Reporter: What is the volume of the bilateral trade?

Mihai Prundianu: As for the commercial exchanges between Japan and Romania, in 2010, the total value of our imports from Japan has amounted to more than 290 million dollars, higher than last year. In spite of the global economic crisis, in 2009 we have seen a slight increase of exports to Japan, compared to 2008. The statistic data shows that exports have remained on an upward trend, in terms of amounts, as in 2010 they reached 186.5 million dollars, compared to 112.2 million dollars in 2009.

Reporter: How do you estimate that the economic relations between the two countries will evolve?

Mihai Prundianu: The Ministry of the Economy has launched up for public debate a new Romanian Export Strategy valid for the 2011-2015 period. This focuses first of all on automotive, furniture, apparel and IT industries. But we are also considering the new trends of the global trade demand, and in this regard the areas which have the highest potential could be the bio agriculture, the processing of agricultural commodities, the industry of low carbon emissions, professional services, nanotechnology, design or those concerning the exploitation of the renewable energy sources. According to the strategy, the target markets include those of Russia, Japan, India, North Africa, and the Arab states.

Reporter: What stage are the projects of the Japanese to build nuclear plants currently at?

Mihai Prundianu: Japan is one o the largest consumers of electricity in the world. Before the disaster of March 2011, in Japan there were 54 commercial reactors. Now, one year after the disaster caused by an earthquake at the nuclear plant of Fukushima, Japan is getting ready to shut down all of its nuclear reactors. All but two of the 54 commercial nuclear reactors in Japan, have been rendered nonfunctional and it is unclear when they are going to be restarted. The disaster from one year ago has left Japan with many questions over the nuclear security. In December, the Japanese government has announced a plan to dismantle the nuclear plant, but said that it would take from two to three decades to do so completely. So far, the plant has only been stabilized. In spite of all this, the energy strategic plan of Japan drawn up by the Ministry of the Economy, Trade and Industry mentions promoting nuclear energy by building nine new nuclear plants, by 2020, and more than 14, by 2030. But the nature of the disaster of 2011, was huge for Japan and has caused it to revise its nuclear policy, first of all in terms of security. The National Nuclear Regulatory Authority will issue new regulations in this regard, which will be included in the legislation. These include the taking into consideration with all the implications, of measures, from prevention to controlling damage, accidents and unpredictable situations. The Japanese have become aware of the fact that regardless of how cautious they may be, there is always the possibility of something happening that you can't control.

Reporter: What is Japan's development strategy?

Mihai Prundianu: The impact which Japan had on the modern world is enormous, as it is a huge player on the world stage. Even though it takes up less than 3% of the total dry land, it nevertheless accounts for one sixth of the world's economic power. Japan's economy is supported in all areas, from IT to tourism. It went from being a distant and exotic land 150 years ago to being an economic superpower. I feel that one of the secrets behind the spectacular development of Japan, is its large workforce, which is very well-schooled, extremely disciplined, obedient and focused, a capital which was accumulated in the private sector. Japan missed the train of the industrial development, but profited from the fact that it has developed late. As a result, it succeeded in using the latest technology which other nations got to use only after a century or more of costly failures. Japan's development strategy is first of all based on balance and consequences. The strategy is looking at a perspective which not only involves the establishment of a position, but also a perception of reality which is reflected in its actions, which concern the market and the technology.

Reporter: Thank you!