Newsletter No. 702
News-Analysis
August 8, 2007

 

OZAWA UPS THE ANTE -- TARGETING THE ASDF MISSION IN IRAQ

Today DPJ leader Ichiro Ozawa is meeting with US Ambassador Thomas Schieffer. Yesterday, however, he was sounding very tough on the eve of this meeting. Not only did he reiterate in very strong terms his opposition to the extension of the MSDF Indian Ocean mission, but he also suggested that his party might proactively target the ASDF Iraq mission this fall.

In terms of Afghanistan, Ozawa explained his opposition by asserting: “The United States started the war in Afghanistan, calling it 'a war of self-defense'… It has nothing to do with the United Nations or the international community.”

It sounds like Ozawa understands something that most LDP members either don’t know, or simply won’t admit in public -- that the “international community” is not always synonymous with Washington policy. Readers of this newsletter know that I’ve been pounding on that point for a long time, so I’m pleased to finally see it being said by a key Japanese leader as well.

On the other hand, I will also repeat what I said in Shingetsu Newsletter No. 696 -- recognizing that US policy may be flawed is one thing, but the DPJ also has a responsibility to create a new positive vision of Japan-Afghan (or Japan-Iraq) relations that is not just the flipside of the LDP policy. All of the DPJ leaders’ comments so far have focused on their attitude toward US policy, but what will be their own independent Japanese policy? I want to hear something about that too.

As for Iraq policy, Ozawa was asked if the DPJ was planning to actually submit its own bill canceling the ASDF mission. He responded as follows: “We will think about which subjects we should take on in the next parliament session, but I can say that's one of them.”

In sum, the DPJ is now contemplating pulling the plug on both the MSDF Indian Ocean mission and the ASDF Iraq mission simultaneously. No doubt, MOFA and the Defense Agency must be horrified at this prospect, and the anti-DPJ fear-mongering is probably right around the corner.

Still, it’s not clear whether the DPJ can really pull off these maneuvers legislatively -- especially on Iraq -- and it is also unclear whether they will hold tough under the extreme political pressure they are certainly about to face.

MOFA AND IRAQ

Despite the uncertainty over the future policies in Tokyo, MOFA is still continuing to operate as before. There have been two recent announcements in regard to Iraq.

The first of these noted that Gotaro Ogawa -- the MOFA point man on Iraqi aid -- met in Baghdad on July 30th with Prime Minister Nuri al-Maliki. Ogawa promised that Japanese aid would continue. In response, Al-Maliki expressed his country’s thanks for Japanese assistance and made some sunny comments about how security conditions in Iraq were getting better all the time.

On the day following this meeting Tokyo agreed to provide more yen loans to Baghdad. Notes were exchanged by Ambassador Kenjiro Monji and Minister of Finance Bakr Jabr al-Zubaidi on two projects as follows:

Basra Water Supply Improvement Project: Up to US$360 million to repair and improve the water supply system in Basra and nearby Hartha city.

Electricity Sector Reconstruction Project in Kurdistan Region: Up to US$123 million to supply machinery and stabilize the power supply system in the Kurdistan region.

RECENT OPINION PIECES ON JAPAN AND IRAQ

In the past few weeks there have appeared two interesting new opinion articles which are related to Japan and Iraq. They are now offered here:

Linkages between North Korea and Iraq for Japan
By Robert Dujarric (Temple University Japan Campus)
Glocom Platform

East Asian countries have witnessed a gradual decline in US commitment in the region since 9-11 and even more since the launch of the Iraq War. More and more, US military, intelligence, and diplomatic resources are being shifted to the Middle East, especially Iraq. Therefore, if North Korea collapses, where would the US get ground forces to augment to the US forces in Korea? The unfortunate answer is that it would be very hard as Iraq and, to a much lesser extent, Afghanistan, is absorbing such a large portion of US Army and Marine Corps manpower. Until the United States realizes that withdrawal from Iraq is the best option, there will be no solution to this problem. Moreover, even after the US departure, the nefarious consequences for regional stability of Saddam Hussein's ouster will force the US to earmark considerable resources to the region.

Of course, this is not to say that the US is out of East Asia. America remains, by far, the most powerful East Asian power. But the US presence in the region is not where it should be. Moreover, after countless tirades about the evils of Kim Jong-il, the Bush administration finally decided to make major concessions to the DPRK. This surprised Japan's government, which had taken the administration's discourse about the "Axis of Evil" at face value. But though some Japanese may have felt betrayed, the US could not escape the consequences of its self-inflicted Iraqi wound, namely that America must make concessions in other theaters.

Japan's surprise at the US about-face regarding North Korea was due to its government's lack of understanding of the extent of the catastrophe unfolding in Iraq and its impact on American power. Unfortunately, Iraq is not the only crisis facing the US -- and therefore Japan -- in the region. Many Americans today are as hysterical about Iran as they were about Iraq in 2003, opening the door for a possible Iranian-American War from which no good will come for the United States. Moreover, Pakistan is in a very precarious situation. A further deterioration of the situation there could create another enormous challenge for the US in the region. These developments have not really registered in the minds of many people in Japan as well as in other East Asian countries, leading to the sense of anxiety, frustration and disappointment toward the US in this region.

What can Japan do about this situation? For one thing, the Japanese have to live with the fact that "solution" of the North Korean problem will be hampered by the situation in the Middle East in the foreseeable future. Needless to say, Japanese influence in the Middle East is minimal, despite its interest in the region because of its dependence on oil from that region. What the US will do in the region will not be influenced by Japan by any means. Japan is very much in a spectator's position, and this will not change, regardless of who wins the next presidential election in the US. If the United States decides to strike Iran, it will not be stopped by Japanese arguments about the importance of Iran to Japan's energy supplies.

Although there is not much Japan can do to improve the situation in general, Japan should engage the East Asian region in ways that will avoid its isolation and help strengthen its relationship with the US. For that reason, Japan will have to set aside the abduction issue and actively participate in the current negotiation process instead of isolating itself from the Six Party Talks process. By the same token, to engage not only North Korea but also South Korea and China, Japan needs to deal with the history issue more efficiently and more thoroughly. This history issue should not be considered a moral or ethical challenge, but rather a strategic one, and the Japanese government should not repeat the mistakes it made regarding the comfort women issue in the future if it wants to play a great role in Asia.

One might ask what Japan could do in the region with North Korea possessing nuclear weapons. While the Six Party Talks have so far narrowly focused on North Korea's nuclear problem, whether North Korea has nuclear weapons or not is a minor issue, because, for example, the Soviet Union possessed far more bombs and missiles, and North Korea is no more irrational than the USSR was. China acquired nuclear weapons while undergoing the insanity of the Cultural Revolution, but life went on (for China's neighbors if not for the tens of millions of Chinese killed during Mao's rule). In that sense, the possession of nuclear weapons by North Korea is not as serious an issue as many Japanese might feel. Proliferation is not much of a problem either, because it is clear that North Korea is not supporting Al-Qaida in any sense. This is in sharp contrast to Pakistan, where numerous individuals, including members of the elite, are strong supporters for Al-Qaida organizations. So, North Korea's nuclear issue is marginal, and it should be relegated to the ranks of important but non-vital issues.

Instead, Japan might look beyond the current focus of negotiations with North Korea, and try to help turn the Six Party Talks into some sort of regional security organization for East Asia, comparable to the OSCE (Organization for Security and Co-operation in Europe) in Europe. Although the six parties are surely not allies, they can and should meet and discuss common concerns including humanitarian aid, piracy, maritime trade, environmental damage, etc. in the region (other countries might be added to the process, while North Korea's contribution will probably irrelevant in many of these areas). Japan can make a major contribution in these areas and increase its presence and influence to help compensate for the partial power vacuum in East Asia resulting from American policy in the Middle East.

Lessons in Ethics from Doing Business in Iraq
By Katsuyuki Higae (Daito Bunka University)
Asahi Shinbun

The chaotic situation in Iraq is a great destabilizing factor in world politics today. Iraq is a country that poses serious challenges also for businesspeople as I came to know decades ago when I worked there as an employee of a leading Japanese trading company. Iraq's unique characteristics as an Islamic society and its Arab socialist dictatorship enhanced the risk of doing business in the country.

As a person who obtained first-hand experience of hard-driving business competition among trading firms in such a challenging environment, I have some thoughts to share about the work of trading firm employees.

In April 1977, I was ordered by my employer to travel to Iraq and stay there for a while, possibly for a long stint. I submitted documents for my company's participation in bidding for large-scale power projects to the Iranian electricity agency and, after a weeklong stay in Tehran, went to Baghdad. Back then, before the war with Iran, Iraq was beginning to accumulate wealth thanks to increased oil production. The country was embarking on spending newly acquired oil money to improve its underdeveloped infrastructure like power plants and roads.

The day after I arrived at Baghdad, I started my daily visits to the Iraqi electricity agency to find business opportunities. I was in charge of overseas sales of Japanese heavy electric machinery and plants. The only potential client in Iraq was the electricity agency, a government organization. I went to the agency every morning to arrange appointments with the official in charge, but I kept getting turned away at the door. Obviously, I first had to find a way to get my foot in the door to start building up necessary connections within the agency.

On one day, when I returned to the office dispirited after another fruitless visit to the agency, one of my colleagues gave me a piece of advice, quoting a proverb: "If you want to shoot the general, shoot his horse." My colleague's point was that I had to first gain the favor of the female secretary to the official in charge in order to get an appointment with the official and start talking business with him. The colleague told me that one of the things most coveted by women in socialist countries was Japanese-made nylon pantyhose. And he even handed me some pairs -- very precious products in Iraq in those days -- saying, "Good luck." The Japanese nylon pantyhose worked like a magic. On the following day, the secretary, with a smiling face, quickly arranged an appointment for me with the official. From that time on, I could easily communicate with both the official and his secretary. That made it possible for me to get crucial information about what kind of heavy electrical machinery the country needed. This important business connection led to some winning bids for government contracts.

Our main domestic rival had already won the contract to help build the Hartha Thermal Power Plant in the southern Iraqi city of Basra. The official at the electricity agency gently hinted that there was a project under way in the government to build a "super grid" -- a network of ultrahigh-voltage transmission lines to supply electricity generated at the plant to major northern cities, including Baghdad. I immediately sent the information to the head office in Tokyo, which told me to get a piece of the pie.

Beating Rivals with Dirty Tricks

While I was working in Baghdad, a rumor floated around that the chief of another Japanese trading firm's office in the Iraqi capital had been arrested by secret police and jailed. At that time, Iraq was under the one-party rule by the Baath Party, which had kept its grip on power in both Syria and Iraq for years under the slogan of "Unity, Freedom, Socialism."

Saddam Hussein, who was executed late last year, was vice president back then. There was no way for us to find out exactly what happened to the branch chief. Still, the news sent a shock wave through the community of Japanese businessmen in the country, especially among people working for trading companies. Jails in Iraq were not equipped with air conditioning, and the meals were far from Japanese tastes. The consensus view among Japanese businessmen in the country was that a one-month stay in an Iraqi jail was enough to cause any Japanese to lose his sanity.

We assumed that the trading company would approach the Japanese Foreign Ministry, the Iraqi Embassy in Tokyo and the Iraqi government and secure the release of the arrested branch chief before long. But things didn't go smoothly, and more than six months passed before the chief was finally released and deported.

Japanese trading companies were jockeying fiercely for big, juicy contracts. All of them made big efforts to cultivate connections with influential people with the power to pick contractors. And they also tried hard to ruin rivals' connections. Because of these circumstances, there was a suspicion that the arrested branch chief may have fallen prey to a rival company's plot to frustrate his efforts to win contracts by telling secret police that he appeared to be engaged in illegal acts. The news made us very nervous and cautious even about our ordinary, completely legal business operations as it alerted us to the possibility that we could be arrested even on a groundless story someone could tell to the secret police.

From April to September, the heat in Baghdad is hard to bear. The temperature rises above 50 degrees in the sun, but it is surprisingly comfortable in the shade because of the low humidity. The temperature fluctuates wildly because of the continental climate. After several months of sweltering weather, the temperature dropped sharply in October. It was quite cool at night, and I caught a cold.

One day, when I returned to my hotel room after a day's work, I suddenly got sick and rushed to the bathroom. After a while, I found myself in a sea of blood. As I later learned, my duodenal ulcer had burst and I had lost consciousness after vomiting blood. Regaining consciousness, I called one of my colleagues and asked him to send a doctor to my room. I was rushed to Baghdad University's hospital. An emergency operation at the hospital saved my life. The duodenal ulcer was apparently caused by the daily stress of working in such a harsh environment and having to eat disagreeable Iraqi dishes day in day out. The imprisonment of the Japanese businessman may have been the last straw.

One week before my hospitalization, I called my home in Tokyo and was told that my second daughter had been born and was in good condition while I was away in Iraq. Before my operation, I realized that my daughter could lose her father before ever seeing his face. I suddenly felt sorry for my daughter and wiped my tears away in bed.

After my collapse, which brought me close to death, I started viewing my remaining life as a special gift. I decided to live in a way consistent with my principles without worrying about what others think.

My stint in Iraq taught me many things. I believe our generation of Japanese corporate warriors during the high growth era made significant contribution to the development of the nation's economy. But it is a different matter whether the method of doing business in our times is still effective, and more importantly, still acceptable. A free-market economy is a dog-eat-dog, winner-takes-all world. But engaging single-mindedly in the relentless competition that is the essence of the free market without paying attention to professional ethics often leads you to cross the line into war without honor.

Teigo Iba, who served as director general of the Sumitomo conglomerate during the early years of Japan's modernization in the late 19th century, liked to say, "A wise man loves wealth, and there is a proper way to get it." This is a motto that could still be good for people in business. People may think "business ethics" and "corporate social responsibility" are Western ideas of corporate governance that were recently introduced into Japan. But Japanese top executives during the early years of modernization were more firmly committed to business ethics and corporate social responsibility than their contemporary counterparts. I hope young Japanese businesspeople learn this fact.

The Right Way to Make Money

The days are long gone when trading companies were locked in war without honor over large international contracts. An important turning point came when Japan ratified the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which made it illegal for Japanese businesspeople to bribe foreign government employees. Now, major Japanese trading companies earn more profits from overseas resources development projects they pursue at their own risk than from the traditional business of selling various products at home and acting as import agents.

After retiring from my company, I started teaching at a university. I really hope many young students will go beyond the traditional sphere of activity of Japanese corporate employees in this globalized world and walk the royal road of business more freely and boldly. By doing so, they can undoubtedly contribute to making Japan a manufacturing superpower that can even compete with the United States, whose economy is driven more by financial capitalism.