Newsletter No. 352
News-Analysis
August 5, 2006

 

FOREIGN MINISTER ASO IN BAGHDAD AS TOKYO EYES IRAQI OIL

Taking a page out of the Bush Administration guide to "surprise" diplomacy, Foreign Minister Aso hopped on a commercial jet and made an unannounced visit to Baghdad. Like President Bush, Tony Blair, and Donald Rumsfeld before him, Aso appeared in Baghdad to show his "commitment" to the rebuilding of the country.

During his visit, Aso was able to meet briefly with Prime Minister Nuri al-Maliki and Foreign Minister Hushyar Zibari. The highlight was his announcement of a new US$30 million loan to Iraq.

The Yomiuri had an interesting take on Aso's surprise visit. They suggested two motives were behind it:

1) To buoy Aso's candidacy to succeed Koizumi as Prime Minister in light of Abe's commanding lead.

2) To secure goodwill in Baghdad so as to land oil contracts later for Japanese companies.

In regard to the second issue, the Yomiuri wrote as follows:

"Tokyo is facing the question of how it will maintain its influence and presence in Iraq -- a country geographically distant and with few historical ties to Japan -- a senior Foreign Ministry official said. The government wants to maintain a presence in Iraq because it believes involvement in the reconstruction of the war-torn nation would help secure stable supplies of crude oil. Iraq has abundant oil and natural gas reserves -- a factor that has not gone unnoticed in Japan, which relies on the Middle East for about 90 percent of its crude oil needs. 'Strengthening the relationship with Iraq would bring immeasurable benefits to Japan, which has few natural resources,' an Economy, Trade and Industry Ministry official said."

In related news, Tokyo is now ramping up its efforts to expand the ASDF mission in Iraq. This will include flights to Baghdad Airport, which Defense Agency Chief Fukushiro Nukaga now claims is a "non-combat zone" in accordance with the SDF deployment law -- passed in July 2003 along strict party lines -- that enabled the dispatch. Simultaneously, a source in the Japanese Foreign Ministry told the Japan Times that this same location was the "area with the highest level of security risk in Iraq."

We may infer, therefore, that a "non-combat zone" may be most usefully defined as any place that the SDF happens to be. Of course, logical consistency has never been the strong suit in this great Iraq adventure.

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The following is the Yomiuri's current take on Iraq, published today:

JAPAN'S COMMITMENT TO IRAQ MUST NOT WAVER
By the Yomiuri Shinbun

Foreign Minister Taro Aso's surprise visit to Iraq on Thursday may indicate Japan's strong determination to support Iraq's reconstruction efforts. This was the first time a Japanese Cabinet member had been to Baghdad since the Iraq war started in 2003. Aso was quoted by a Foreign Ministry official as telling Iraqi Prime Minister Nuri al-Maliki that the government remains committed to supporting reconstruction efforts and stressing its intention to continue transportation activities by the Air Self-Defense Force and other support, mainly through yen-loan-financed projects.

It is natural for Japan to be actively involved in Iraq's reconstruction in terms of its national interests, as it depends on the Middle East for about 90 percent of its crude oil supply.

The foreign minister's surprise visit to Iraq was made immediately after Ground Self-Defense Force personnel completed their withdrawal from the southern Iraqi city of Samawah, where they helped rebuild water supply facilities and distribute water, as well as provide medical support. The visit could cast away Iraqi concerns that support would be petering out from now.

Yen Loans Pillar of Support

The pillar of Japan's support for Iraq is the up to 3.5 billion dollars in yen loans it is providing. So far, the loans have been allocated for use on four projects: improvement of port and harbor facilities; refurbishment of thermal power plants; supply of irrigation-related materials; and machinery and construction of bridges and roads in Samawa. They are all important pieces of social infrastructure supporting Iraq's economic activities.

Through the official signing of the projects, the government will make international tenders for them with consulting and construction firms. But the yen loans for the four projects account for only 20 percent of the 3.5 billion dollars. To begin full-scale efforts in Iraq's reconstruction, it is necessary to further narrow down which projects to cooperate on and make them a reality.

But it is the worsening security situation in Iraq that is hampering the smooth implementation of these yen-loan projects. The clash between Shiites and Sunnis has intensified mainly in Baghdad and terrorist incidents are frequent. The United States, which once tried to reduce military forces stationed in Iraq, recently decided to increase its forces in Baghdad. Some high-ranking U.S. military officers have voiced concerns over the situation in Iraq. One of them said there is the possibility of the current situation developing into civil war.

It is presently difficult for Japanese companies to directly take part in Iraq's reconstruction efforts and expand economic support. But Japan should promote its preparation for full-scale support as much as possible, such as by conducting a project in neighboring Jordan to train Iraqi technical experts.

ASDF Still Key Player

In addition to the yen-loan projects, another pillar of the government's support is ASDF transportation activities. On Friday, the government decided to revise the basic plan for deployment of the Self-Defense Forces for reconstruction assistance to Iraq to include Arbil, a city north of Baghdad, as one of the destinations of ASDF airlift operations. The change of the basic plan is aimed at helping the transfer of U.N. workers engaged in support activities in Baghdad and Arbil.

The United Nations significantly scaled down its activities in Iraq after terrorist bombings targeted its Baghdad headquarters in 2003. But with the start of the Maliki administration, the United Nations intends to expand activities in Iraq.

It is the responsibility of Japan as a member of the international community to actively support such U.N. activities.

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VISIT TO BAGHDAD BY FOREIGN MINISTER TARO ASO
August 3, 2006

On August 3, Mr. Taro Aso, Minister for Foreign Affairs, visited Baghdad, Iraq, and held talks with Mr. Hoshyar Mahmud Zebari, Minister of Foreign Affairs, and then with Mr. Nuri al-Maliki, Prime Minister of Iraq. The gist of the talks are as follows.

Talks with Mr. Hoshyar Mahmud Zebari, Minister of Foreign Affairs of the Republic of Iraq

Time: about 35 minutes starting at 18:20 (13:20 local time)
Place: Ministry of Foreign Affairs of Iraq

At the beginning, Foreign Minister Zebari said:

(1) The Government of Iraq and its people heartily welcome the visit of Foreign Minister Aso. I think that his visit is quite timely for further development of Japan-Iraq relations, which have entered a new stage after the redeployment of the final contingent of the Japanese Ground Self-Defense Forces.

(2) The Ground Self-Defense Force completed its mission without firing a single shot and carried out their redeployment safely. The Self-Defense Forces did wonderful work. I again express my gratitude and pay tribute to them. Their contribution was very important in attaining the trust of the Iraqi people and made a favorable impression on the Iraqi people. The fact that the SDF engaged in reconstruction activities, mixing with the local people, will set a good example for the reconstruction process by the international community in coming years in Iraq.

(3) I highly value Japan's leading role for the reconstruction of Iraq. The people of Iraq will never forget Japan's support.

(4) The Iraq Compact, which was formally launched late July, is very important to systemize the assistance of the international community for Iraq, and I would like to ask Japan for further contributions.

(5) I once again express my appreciation to Japan for the debt-relief measures of about six billion dollars, implemented when I visited Japan in November last year.

(6) On the present situation of Iraq:

(a) The Iraqi people are leading a reasonable daily life, and public order is stable in the regions except for Baghdad.

(b) Although the stagnant petroleum industry is a problem, the foreign investment bill has been deliberated at our parliament and the economy is anticipated to recover in the future.

(c) The success of the National Reconciliation Plan is important as it not only leads to the improvement of public order but also enlists support from the neighboring countries including the Gulf States and Syria.

In response to Mr. Zebari's statement, Mr. Aso stated:

(1) I have visited Baghdad for the first time as a Japanese cabinet minister to come here since the exercise of force in March 2003, to convey to Iraqi leaders Japan's strong will to maintain its commitment to assisting Iraq after the withdrawal of the GSDF. I regard as timely this visit right after the full withdrawal.

(2) I am pleased that the Iraqi side highly appreciates the contribution made by a total of 5,500 members of the SDF. In addition to expanding the transportation assistance by the Japan Air Self-Defense Force (JASDF), Japan intends to proactively support Iraq's reconstruction efforts through assistance, mainly maximum 2.5 billion dollar yen-loan projects focusing on the development of infrastructure for economic activities.

(3) Japan intends to further widen the range of future Japan-Iraqi relations which entered a new stage following the withdrawal of the SDF and the inauguration of the new government by, for example, by strengthening political dialogue and economic relations. To do so, Japan intends to discuss measures at various levels. In this regard, Japan invites Foreign Minister Zebari to Japan following his visit to Japan in November last year.

(4) Japan welcomes the official launch of the Iraq Compact process in accordance with the joint statement issued by Iraq and the United Nations on July 27. Japan intends to proactively participate in and firmly support the process. Iraq can count on Japan.

Talks with Mr. Nuri al-Maliki, Prime Minister of Iraq
Time: about 30 minutes starting at 20:05 (15:05 local time)
Place: Prime Minister's Office

At the beginning Prime Minister Maliki said:

I welcome the visit of Foreign Minister Aso to Baghdad. I highly praise the contribution of Japan including the activities of the Self Defense Forces units. Japan is Iraq's best friend. I hope to enhance the bilateral relationship between Japan and Iraq in wide-ranging fields of politics, economy, and culture, and ask Japan to activate investing in Iraq.

In response to Mr. al-Maliki's statement, Mr. Aso stated:

(1) I have visited Baghdad to convey to Iraqi leaders Japan's strong will to maintain its commitment to assisting Iraq even after the withdrawal of the Japanese Ground Self Defense Forces (JGSDF).

(2) In addition to expanding the transportation assistance by the Japan Air Self-Defense Force (JASDF), Japan intends to proactively support Iraq's reconstruction efforts through assistance, mainly maximum 3.5 billion dollar yen-loan projects focusing on the development of infrastructure for economic activities.

(3) Japan welcomes the official launch of the Iraq Compact process in accordance with the joint statement issued by Iraq and the United Nations on July 27. Japan intends to proactively participate in and firmly support the process.

(4) Japan invites Prime Minister al-Maliki to Japan, and hopes that he will visit Japan.

(5) I would like to hear the results of the vigorous efforts made since Prime Minister al-Maliki assumed his post, including announcements of the National Reconciliation Plan and the security measures.

(6) I would also like to hear the outcome of the Prime Minister al-Maliki's visit to the Gulf countries, the US and the UK.

The Iraqi Prime Minister responded:

(1) The large majority of the Iraqi people support the National Reconciliation Plan, but there are some who refuse to coexist. The Iraqi forces are being strengthened steadily, but some countries are interfering with the stability of national security. I intend to hold a national reconciliation meeting by gathering religious leaders other types of leaders in society.

(2) I believe the negative heritage from the time of Saddam Hussein's administration has been dissolved by my visit to the Gulf States. I have talked with the US and the UK leaders about the Iraq Compact and received their support.

(3) I receive with pleasure the invitation to visit Japan.

Finally, Foreign Minister Aso said "If the security situation is stabilized, investment will also be invigorated. If political situation is stabilized, the economy will also be stabilized. I hope that the initiatives taken by Prime Minister Maliki will be more productive in future."

COMMENTARY

1) From Hossein Ebneyousef of International Petroleum Enterprises on August 9, 2006:

The discrepancy in the size of Japan's promised support for Iraq's reconstruction efforts on what was attributed to Mr. Aso during his recent visit to Iraq and talks with Mr. Zebari and Mr. Maliki raises a number of questions:

1) - Is the 1.0 billion dollar difference the cumulative cost of the SDF operation in Iraq?

2) - Is there an official estimate on the actual cost of the SDF mission in Iraq?

3) - What has been identified as SDF's contribution to Iraq's reconstruction program?

4) - The reason for the discrepancy (the reported $2.5 billion promise to Mr. Zebari and the $3.5 billion dollar promised to Mr. Maliki)?

5) - Are there any additional Japanese commitments to Iraq other than the:

a) - About $6.0 billion debt-relief
b) - The cost of the SDF operation to date; and
c) - The maximum of $2.5 billion or $3.5 billion dollar yen-loan promised by Mr. Aso.