Newsletter No. 368
News-Analysis
August 30, 2006

 

KOIZUMI IN KAZAKHSTAN

On the 28th, Prime Minister Junichiro Koizumi flew from Tokyo to Kazakhstan, and thus became the first Japanese premier in office to visit a Central Asian country. As everyone knows, Tokyo’s growing interest in Central Asia relates primarily to its resource diplomacy, especially in regard to oil, gas, and uranium. Koizumi himself alluded to this when he stated on the eve of his departure that, "It is not good for Japan to be too dependent on the Middle East. Both Kazakhstan and Uzbekistan are blessed with abundant resources." Currently, more than 90% of Japan’s oil is imported from the Arab countries and Iran. Also, Kazakhstan is currently the world’s third-largest supplier of uranium (after Canada and Australia) and is thought to possess the world’s eighth-largest reserves of oil. This makes the country and important player in the world’s natural resource market.

Major Japanese companies currently involved in Kazakhstan include Itochu, Marubeni, Mitsubishi, and Sumitomo. More Japanese investment is on the way: Bloomberg quoted Toru Furihata, a Sumitomo mineral resources manager, as saying, “Development is ongoing. We want to expand our uranium business in Kazakhstan.” In fact, according to state-owned uranium company Kazatomprom Vice-President Malkhaz Tsotsoria, Kazakhstan will be opening twelve new uranium mines within the next few years, and is set to become the world’s largest exporter of uranium by 2010 (see Shingetsu Newsletter Nos. 125 and 170 for earlier reports on Japan-Kazakhstan uranium cooperation).

Photo: Koizumi and Nazarbayev
Source: Kantei

It was in this context that Prime Minister Koizumi met with President Nursultan Nazarbayev of Kazakhstan. During the meeting, the two leaders agreed that Japan should play a major role in Kazakh oil, gas, and uranium development. Nazarbayev reiterated his country’s support for Japan’s bid to become a permanent member of the UN Security Council, and hoped that Japan would also get involved in developing Kazakhstan’s electronics industry. Koizumi pledged to bring 2,000 Kazakhs to Japan for technical training within the next three years.

A new agreement on uranium, however, captured most of the headlines. Kazakhstan will now boost its supply of uranium to Japan to 2,000 metric tons per year, or about 25% of Japan’s total demand. Some have called this Japan’s “consolation prize” for getting largely beat out in the Kazakh oil and gas fields by China and Russia in recent years.

Koizumi’s broad comment in Astana was that, "Japan has scarce natural resources while your country has huge natural resources. This visit signifies that Japan intends to actively develop ties between Japan and Kazakhstan."

Nazarbayev responded: "Your visit is an historic event in our relations, in our strategic partnership. We are witnessing -- and we welcome -- the activation of Japan's diplomacy in Central Asia."

Koizumi’s visit to Kazakhstan has not gone unnoticed in Beijing either. An editorial in the People’s Daily Online asserted that the visit has two major aims: “to seek energy and to keep China and Russia at bay.” The same editorial also proposed a link with the Iran issue: “If the nuclear standoff between Iran and the West explodes, it will severely impact the arrangement between Japan and Iran to co-explore Iran's Azadegan oil fields. In this situation, it has become Japan's top priority to find a new source of oil.”

That’s an interesting interpretation of Tokyo’s motives for making the visit to Central Asia at this current juncture, but the linkage between Kazakhstan and Azadegan is a little shaky in light of the fact that Japan’s major agreements with Astana relate to uranium, not oil.