Japan has contributed to Colombian development since 1924. Japanese brought novel techniques to grow crops in Valle del Cauca in 1924. Moreover, they taught techniques to grow grain, the uses of new technology such as tractors and ceramic techniques also. Yuso Takeshima was an important Japanese in Colombia during first half of the XX century; he contributed to develop ceramic industry in Cali and translated Maria novel from Jorge Isaac colombian writer. Nowadays, there are 369 Japanese in Colombia; they settled down in Bogotá, Medellín, Cali and Pereira; most of Japanese residents in Colombia work in real estate sector and education sector. In addition, big Japanese firms are based in Colombia; they add value to vehicles sector, wholesales and retail sales sector also. Nonetheless, international trade between these two countries shows a decline because lack of competitiveness in Colombia; the trade balance has been in favor to Japan since 1962. Finally, the economic cycles between these countries is contra-cyclic, therefore there are huge economic opportunities to diversify firms’ portfolios.
Author: Humberto Bernal,
Economist,
e-mail: zhumber@gmail.com
Twitter: Humberto_Bernal
Japanese started to come to Colombia in important volume since 1923. Japanese came to Colombia a bit late compared with other immigrants such as French, Germans and Americans who started to come in XIX and beginning of XX centuries. Japanese were so interested on Colombia geography because the Colombian writer Jorge Isaacs described it in detail in his book called Maria; this novel was translated to japanese by Yuso Takeshima. When Japanese arrived to Colombia, there were lot of them that settled down in Valle de Cauca region; it is close to Cali city. The volume of Japanese reached 223 in 1938 as figure 1 shows. Most of them worked in agrarian sector as farmers and others worked for La Manuelita sugar factory. Those who were independent workers taught agrarian techniques to locals such as growing rise and other types of grains. Japanese were so laborious; in few years they got the latest technology to grow grains in Colombia and set up grocery stores to keep prices affordable. The most important Japanese in Colombia was Yuso Takeshima who translated Maria novel, brought the ceramic technique called Nihon Toki and set up an important ceramic factory in Cali. There were other important Japanese such as Escipión Isoji Kuratomi, Pedro Suejoro Nakamura, Tsuchizo Yoshioka, and many others. By 1990, there were 796 Japanese in Colombia, but this group showed a strong reduction because internal conflict in Colombia; by 2006 Japanese in Colombia declined to reach 288 people.
Figure 1. Japanese in Colombia 1938-2011
(number of people)
Source: Colombia census, World Bank and Colombia migration office.
Japanese enjoy Colombia. By 2011, the volume of Japanese increased to reach 369; this increase can be explained by better security conditions in Colombian and economic opportunities. They settled down in Bogotá city mainly with 32% of total Japanese in Colombia, but there are other places where they found proper conditions to live on such as Medellín with 9% of total Japanese, Pereira with 12% and Cali with 18% as figure 2 shows. Most of Japanese in Colombia are men with 77% of total Japanese in Colombia, moreover most of them are single, separated or widower. Most of them finished secondary school and there are few that count with technical studies or university education. Japanese work as employers and employees; in the first case there are 15% of total Japanese, and most of them work in real estate sector or educational sector. Unfortunately, there are 2 Japanese in troubles with Colombia Law in 2013. This information come from Colombia census in 2005, migration office and Inpec.
Figure 2. Japanese residents current location in Colombia
(Share % of total Japanese in Colombia 2005-2011)
Source: Colombia census and Colombia migration office.
Big business between Japan and Colombia
Japan started to make important business with Colombia since second half of XX century. The volume of Foreign Direct Investment as stock (FDI) started to come since 1968; for instance, Mitsubishi Electronic Corporation opened its office in Bogotá in 1969, Mitsui de Colombia opened its office in Bogotá in 1970, Itouchu Corporation opened in 1974 and Sony Corporation opened its office at the beginning of 60’s. The volume of FDI as stock went from US$2.5 millions of 2012 in 1968 to US$523.4 million in 2012 as figure 3 shows, therefore it means an annual average growth of 12.9% between 1968 and 2012. The number of big firms went from 11 in 1995 to 14 in 2012; they are located in Bogotá mainly with 79% of total big firms; there are others located in Cotá, la Estrella (Antioquia) and Pereira. Most of these big firms are in industrial sector; for instance, by 2012, there were 6 firms in this sector where Comapañia Colombiana Automotriz S.A based in Bogotá leads the list, followed by Industria Colombiana de Motocicletas Yamaha S.A based in La Esterella, Suzuki Motor de Colombia S.A based in Pereira and Hino Motors Manufacturing Colombia S.A based in Cotá. There are other Japanese big firms in wholesales and retail sales; for instance, in 2012, one can find Sumitomo Corporation Colombia S.A; Itochu Colombia S.A and Melco de Colombia Ltda; all of them are based in Bogotá. There are others in real estate sector and transport and store sector.
Figure 3. Japanese FDI stock in Colombia 1968-2012
(US$million 2012 chained British Petroleum prices)
Source: De Lombaerde 1997; Central Bank Colombia.
Japan and Colombia international trade took relevance since 1962. Since 1962, trade between these two countries showed an increasing trend, but this trend started to decline after 1983 as figure 4 shows. This trade behavior can be explained by the new trade partners for Japan. Japan found other countries to get primary products such as China, the United States, Australia and Saudi Arabia. However, Colombia carries exporting coffee, cut flowers, crude oil, coal and few basic chemicals, iron and steel. On the other hand, Colombia imports lot of added value products from Japan; for instance, vehicles, computers, rubber, machines for factories and others. The balance of trade between these two countries has been in favor to Japan; it reached US$1,294 million in 2012.
Figure 4. International trade Index* Japan-Colombia 1962-2012
(Japan and Colombia exports plus imports divided by total exports and imports of Colombia, % percentage)
Source: United Nations Data.
Japan and Colombia Gross Domestic Product cycle are contra-cyclical; it means when Colombia shows high economic activity, Japan shows low economic activity; the contrary way is true also. Therefore, business men can take advantage of it to diversify their portfolios; for example, Japanese can improve their investment in transport sector in Colombia (Public Transport in Cali or Bucaramanga) to mitigate their low economic activity faced in these days, and Colombians can open dairy firms (firms that produce desserts to takeaway) and chocolate firms in Japan to take advantage of good economic activity faced by Colombia. The contra-cyclical effect can be measured through correlation coefficient of -0.04.
Figure 5. Colombia’s cycle and Japan’s cycle
(1979-2013 quarterly normalized data)
Source: Bureau of Statistics Colombia (DANE), interamerican Bank of Development, Federal Reserve Bank of San Luis USA and Cabinet Office Japan.
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