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The US-Japan 2+2 Joint Statement on April 27th has offered new initiatives proposed by Japan, one of which, most significantly, is helping to build the capacity of coastal states in Southeast Asia through the use of Japan's official development assistance (ODA).

As the stability of the maritime order in the South China Sea is far from assured, the coastal states of the Association of Southeast Asian Nations (ASEAN) seem to be suffering from unprecedented strategic instability. First, there is a rapidly growing capability gap between the China Coast Guard and the PLA Navy and Air Force on the one hand and their ASEAN counterparts on the other. China's rapid procurement of patrol ships, surveillance vessels and aircraft, submarines and new-generation fighters is bound to consolidate its maritime and air superiority vis-à-vis its Southeast Asian neighbors. Second, the ongoing efforts to generate a rule-based maritime order in the South China Sea have not achieved visible success. The negotiations over establishing a legally-binding Code of Conduct are likely to be long and daunting since China has not shown an accommodative stance on discussing sea disputes in a multilateral context. Third, more ASEAN countries have been leaning toward inviting third parties, most importantly the United States as well as Australia and Japan, to become involved in the maritime balance of power game. However, defining the US role as an external balancer against China is still too naïve an agenda for most ASEAN countries in view of the deep economic interdependence between the US and China.

In dealing with these difficult conditions, ASEAN obviously needs to increase its own strength to deal with a rapidly changing strategic landscape, and it requires equally rapid capacity-building of its own. Japan also desires to maintain a favorable balance of power in the South China Sea, not only because it contains sea-lanes that are vital for the Japanese economy but also because maritime disputes and agreements between China and ASEAN could serve as prototypes for dealing with maritime interests in the East China Sea. Hence, helping to build ASEAN's maritime security capacity is becoming a key policy focus for the Japanese government. For many long years, Japan's basic policy approach toward ASEAN has been to support ASEAN's consolidation and resiliency. Japan's engagement toward ASEAN is now being reformulated in line with a regional security-oriented approach.

First, Japan is more actively engaging in joint military exercises and training in Southeast Asia. In the past several years, Japan has increased its profile to participate in joint exercises, humanitarian assistance, disaster relief and non-combatant evacuation operations. The Japan Self Defense Force (JSDF) has participated in the US-Thai Cobra Gold joint/combined exercises since 2005 and joined in the US-Philippines Balitakan series for the first time in March-April 2012. In July 2011, Japan conducted its first joint maritime military exercise with the US and Australia in the South China Sea off the coast of Brunei. Japan has been an active participant in the Pacific Partnership, a dedicated humanitarian and civic assistance mission in Southeast Asia. With increased participation in multilateral joint military exercises and training, Japan is significantly increasing its networking, communications and security cooperation with regional states. Starting from this fiscal year, the Ministry of Defense will embark on an assistance program for security capacity-building in ASEAN countries in such fields as humanitarian assistance, disaster relief and counter-piracy operations. Although the current budget is rather small, it is expected to expand over the longer term.

Second, Japan has become more vocally supportive of ASEAN's security capacity by boosting its ODA. During the Japan-ASEAN Summit Meeting in November 2011, Prime Minister Yoshihiko Noda pledged $25 billion to promote flagship projects for enhancing ASEAN connectivity. At the Japan-Mekong Summit in April 2012, Japan also pledged $7.4 billion in aid over three years to help five Mekong states' infrastructure projects. Aspects of ASEAN's critical infrastructure such as airports, ports, roads, power generation stations and electricity supply, communications, and software development are important, and often highly compatible, components of their security sectors. Foreign Minister Koichiro Gemba is now conspicuously promoting the "strategic use of ODA" to seek connectivity between Japan's aid and regional security. If Japan's financial assistance is more strategically oriented to support these functions, it can serve as a major tool for ASEAN to build up its defense infrastructure.

Such capacity could also support an effective US military presence in this region. As former Secretary of Defense Robert Gates mentioned, the importance of "building the capacity of others," enhancing the capacity of US allies and friends in Asia, is a major component of the rebalancing strategy. If the ASEAN coastal states are able to perform effective intelligence, surveillance and reconnaissance (ISR) operations and develop their low-intensity operation capabilities, escalation management at the initial level of tensions would be dramatically improved. This infrastructure could also provide potential alternative access points for US forces in Southeast Asia. In pursuing a "geographically distributed, operationally resilient and politically sustainable" presence, capacity building in Southeast Asia would bring about cohesive guidelines, as stated in the latest 2+2 Joint Statement, for the Japan-US alliance.

Finally, the government of Japan is seeking to promote direct arms exports to support the defense infrastructure of ASEAN countries. In December 2011, Japan decided to ease the restrictions imposed under its Three Principles on Arms Exports. While maintaining the basic philosophy of restraining exports, overseas transfers of defense equipment are now allowed in principle in cases related to contributing to peace and advancing international cooperation. For example, Japan is considering providing the Philippines with patrol vessels for its coast guard and maritime communications systems through ODA in the coming years. Building upon the eased restrictions, Japan is gearing up to consider exporting patrol vessels, aircraft and multi-purpose support ships to enhance ASEAN's maritime security capabilities. If this hardware assistance is coupled with technical support and training by the Japan Coast Guard and the SDF, Japan's support will more effectively contribute to their maritime security.

Although these moves indicate a new policy direction of Japanese engagement toward ASEAN, Japan may need a clearer strategy to promote capacity building in ASEAN. Helping to build ASEAN's defense capacity while avoiding an unnecessary security dilemma with China requires Japan perform a delicate balancing act. Japan also needs close coordination among domestic institutions such as the Ministry of Defense and the SDF, the official development assistance (ODA) strategies of the Ministry of Foreign Affairs and the Japan International Cooperation Agency (JICA), and the financial functions of the Japan Bank for International Cooperation (JBIC). Each institution obviously has a different perspective on capacity building in ASEAN. In the meantime, joint military exercises/training, the strategic use of ODA and arms exports will constitute important pillars of Japan's policy toward ASEAN.

Dr. Ken Jimbo is an Associate Professor in the Faculty of Policy Management, Keio University. He is concurrently a Visiting Research Fellow at the S. Rajaratnam School of International Studies, Nanyang Technological University, and a Senior Research Fellow at the Canon Institute for Global Studies.

The views expressed in this piece are the author's own and should not be attributed to The Association of Japanese Institutes of Strategic Studies.