Tarique’s Japan visit to serve bilateral interests

The recent four-day visit of Bangladesh Prime Minister Tarique Rahman to Japan cannot be viewed merely as a bilateral diplomatic engagement. Rather, the visit carries significance in the broader context of the two countries' economic interests, investment needs, industrialisation, energy security and regional geopolitics.

While Japan is looking for new markets, production hubs and investment opportunities, Bangladesh is seeking to utilise Japanese capital, technology, expertise and industrial experience to advance its economy. These mutual needs have featured prominently in discussions during the visit.

Economic Growth: Japan's economy is not entirely stagnant. According to the Japanese government's October 2026 economic assessment, the economy is recovering at a moderate pace. There are signs of improvement in business investment, industrial production and employment. However, concerns remain over rising consumer prices and the impact of developments in the Middle East.

In other words, although overall economic indicators suggest a recovery, the benefits are not reaching ordinary people equally.

Another major problem facing Japan is the weak yen. The yen's depreciation against the US dollar has increased the cost of imported energy, food products and raw materials. This has placed considerable economic pressure on Japan, which is heavily dependent on energy imports.

The Bank of Japan is moving towards a policy of raising interest rates to control inflation. However, while higher interest rates may help contain inflation, they could also put pressure on debt-dependent businesses, investment and consumer spending. As a result, policymakers are facing the difficult challenge of maintaining a balance.

Purchasing Power Declines Despite Wage Increases: One of the major concerns among ordinary Japanese citizens is the rising cost of living. There is growing dissatisfaction over the prices of rice, food products, electricity, gas, housing rents and everyday essentials.

Although wages have increased, many families are struggling to keep pace with inflation. This is reflected in the country's household expenditure statistics. In August 2026, real household spending in Japan declined by 3.1 per cent compared with the same month of the previous year. This marked the ninth consecutive month of decline. In other words, despite wage increases, consumer spending among ordinary people is not recovering.

Against this situation, Prime Minister Sanae Takaichi's government has taken an initiative to reduce consumption tax on food products. From April 2027, the government plans to reduce the tax on food products, takeaway meals and non-alcoholic beverages from 8 per cent to 1 per cent for a period of two years.

However, the initiative has also sparked debate. While ordinary citizens support tax reductions, concerns remain over government revenue and the financing of social security programmes. In various public opinion polls conducted in August, 67 per cent of respondents expressed concern over the financial implications of the proposed tax cut.

Another major source of public dissatisfaction is the ageing population. The number of working-age people is declining, while the elderly population is growing. As a result, labour shortages are emerging in manufacturing, construction, agriculture, services and care sectors. At the same time, government expenditure on pensions, healthcare and social security is increasing.

In this situation, two questions have become particularly important for Japan: how to increase productivity and how to ensure an adequate workforce.

Political Challenges: Japan's current political situation is also experiencing a degree of uncertainty. After assuming office in October 2025, Prime Minister Sanae Takaichi made history as the country's first female prime minister. Her government is now facing major challenges involving inflation control, economic growth, social security and political accountability.

The government's public support has also fluctuated in recent times. According to a public opinion poll conducted by Kyodo News on October 17 and 18, support for the Takaichi administration fell to 49.1 per cent. This was the lowest approval rating recorded in the survey since she took office.

The resignation of Agriculture Minister Kazuo Yana also played an important role in this decline. His remarks about reducing road construction allocations for municipalities that had failed to provide political support at the local level triggered widespread criticism. In the survey, 57.7 per cent of respondents believed that the prime minister had delayed removing him from office. Meanwhile, 81.5 per cent considered his resignation appropriate.

However, not all opinion polls have presented the same picture. Some surveys have placed support for the Takaichi government above 50 per cent. Therefore, it would be premature to reach a definitive conclusion about the country's political situation based on a single set of polling results.

Furthermore, the proposed reduction in food consumption tax, government debt, expenditure on social security and political controversies involving cabinet members are creating additional challenges for the administration.

In other words, the key issues in Japanese politics are no longer limited to political stability. Reducing the cost of living for ordinary citizens and ensuring accountability for government decisions have also become important concerns.

Why Is Bangladesh Important to Japan's Economy?: Against Japan's current economic backdrop, the importance of a populous and promising market like Bangladesh is increasing. Bangladesh has a large consumer market, a young working-age population, opportunities for industrialisation and a strategic location centred on South Asia and the Bay of Bengal.

Japan, on the other hand, has extensive experience in advanced technology, the automobile industry, machinery manufacturing, energy management, railway connectivity and industrial infrastructure development.

Combining the strengths of these two countries could create opportunities for mutual benefits.

For Japan, Bangladesh could become an important hub for expanding production and investment. In particular, Bangladesh's geographical and economic position could prove significant in developing alternative supply chains beyond the China-centric production system and gaining access to the South Asian market.

For Bangladesh, Japanese investment means more than just financial inflows. It also offers opportunities for technology transfer, skilled workforce development, new employment generation and the expansion of export-oriented industries.

Japanese Investment Potential in Bangladesh:  Prime Minister Tarique Rahman’s recent visit to Japan at the invitation of Japanese Prime Minister Sanae Takaichi has added a new dimension to the political, economic and diplomatic relations between the two countries.