While Japan has knowingly topped the list of bilateral donors to Cambodia over the past two decades, Japanese private investment is low compared to FDI list leaders China and South Korea. While Japanese companies only invested $331 millions between 1994 and 2011, ranking 11th, China and South Korea invested $8.9 billion and $4 billion in this period of time respectively, according to JETRO (Japanese External Trade Organization).
But Japan is catching up two its neighbour countries – rapidly, as JETRO figures state. In 2012 alone, Japanese investment was $212 million, which rankds third, following China and South Korea with $263 million on $287 million, respectively.
Apart from the recently opened Aeon Mall – home to 49 Japanese businesses alone – nowhere is that change more striking than Kizuna street, a strip of Street 63 between Mao Tse Tung Boulevard and Street 462 in the heart of Boeung Keng Kang district.
Since November 2013, seven Japanese restaurants have opened up within spitting distance of each other, creating a street picture that could have almost been taken out of a city in the Land of the Rising Sun itself.
Japanese paper lanterns hang in front of some restaurants; a huge pink octopus with closed eyes smiles above another, inviting passerby to try octopus dumplings. Pleasantly dimmed lights, a typical element of Japanese interior design, shine out of all the venues, while oversized signs covered in Japanese characters overwhelm their neighbours.
The only obviously Cambodian element about these restaurants is the Phnom Penh Beer that is served nearly everywhere. Could this be the nucleus of a “Japan town” growing right in the middle of Cambodia’s capital?
It seems likely, not least because of the efforts of ambitious Japanese social entrepreneur Jiro Kurokawa. The 35-year-old CEO of HUGS (Humanity United by Giving Support) is seeking to create a commercial space for Japanese small- to medium-sized enterprises, or SMEs, in Cambodia as a broker – and also help Cambodian society develop by facilitating the organic growth of both Japanese and Cambodian businesses along Kizuna Street.
HUGS’s formula for healthy growth seems simple, but it involves patience.
“Every morning , our staff walk around the neighbourhood, bonding with the local building owners to build trust,” Kurokawa explains.
This way, the Japanese entrepreneur encourages locals to rent out locations that are not necessarily being put to their highest potential commercial use.
The Nagomi fashion boutique that will open as the first of its kind on Kizuna Street this October, for example, is currently still just a garage.
Local business owners are also benefiting from the economic boost, as the growing number of customers for the Japanese restaurants boosts foot traffic and landlords are able to increase rents as the businesses on the street grow. The new enterprises also offer locals well-paid employment under Japanese-standard working conditions.
To strengthen a feeling of a Japanese-Cambodian street community HUGS started a joint initiative.
“Every Monday morning at 9am, you can see the Japanese restaurant owners and Cambodian residents pick up trash from the street,” Kurokawa says.
This way, the community builds an appreciation for what they are building together in business and between people.
This simple Monday morning ritual stands as a metaphor of the entire philosophy behind Kizuna Street.
The Japanese feeling of self-responsibility for the good state of one’s environment is quite new for some. When littering is a way of life, the habit of dropping anything you don’t need any more where you happen to stand can die hard. But the force behind the “Japanisation” of Street 63 realises that it’s an ongoing process.
“We provide Japanese culture, but we cannot forget that we are in Cambodia, so we have to change our approach,” Kurokawa explains.
“If we want to pull through Japanese style, we won’t succeed. We need to understand Cambodian people, because they don’t necessarily receive as much education as Japanese, so we have to keep doing things with people together. Then they can receive and understand.”
Of course, this doesn’t only apply to the benefits of picking up trash from the street where you do business.
Decades of peace and prosperity made the development of all kinds of skills and behaviour that most people from industrialised countries take for granted.
Kurokawa, who was born in Iraq, played football semi-professionally in England, and tried business in Japan as well as in Africa, does not take it for granted.
He knows that it takes time for people from different cultures to understand and learn from each other. That process is the same for him as anyone else, Kurokawa admits.
“Like most Japanese people, I thought that Cambodia is a poor little country full of landmines.”
Before he came here, he didn’t know that Angkor Wat would fascinate him or that the warmth of Cambodian culture would make him want to stay, he says.
The social entrepreneur spent two weeks of this August in Japan advertising the long-term life and business adventure that is Cambodia, where growth and opportunity are omnipresent, unlike in his home country that has been fighting recession for decades.
“I want more Japanese people to come to Cambodia and do business with Cambodians,” Kurokawa says, adding that Kizuna Street itself has been a beacon for just that.
“There isn’t a China town or Korea town in Phnom Penh yet. We feel we entered the competition with these countries by creating a symbol with a Japanese street.”
The approach HUGS takes seems to be working.
By the end of 2014, seven more Japanese businesses brought into the country by HUGS will open on Kizuna Street, bringing the total number to 14 businesses and brought Kurokawa that much closer to his dream of a growing Japanese-Cambodian melting pot community.
The Japanese businesses new and old will celebrate with a street festival on January 18. They will drink Phnom Penh Beer, and the next morning, they’ll probably pick up the trash.