Newsletter No. 1446
News-Analysis
August 30, 2009

 

THE IRAQI INHERITANCE

Today is the day that will send the Liberal Democratic Party (LDP) to its well-deserved doom, and we will report tomorrow about how widely or narrowly they are defeated. At this point, just about nobody expects the Taro Aso administration to survive. Today is therefore a good opportunity to consider what the Democratic Party of Japan (DPJ), in coalition with its much smaller allies, is inheriting in Iraq.

The truth of the matter is that the LDP is passing along an unexpectedly strong legacy in Iraq. I have been a pretty merciless critic of Japanese policy toward Iraq for some years, but in fact, as we stand here at the end of August 2009, the situation for the Japanese in Iraq is more positive than one might expect.

Don’t ask me how, but somehow the GSDF spent two-and-a-half years in Samawa and the ASDF operated for five years in Iraq and not a single Japanese soldier was lost. Of course, a couple of Japanese diplomats and several civilians did indeed lose their lives in the Iraq conflict, but only a few ordinary Japanese are still concerned with that. All the Japanese soldiers are now back home, so the DPJ will not have any Iraqi military mission hanging over their heads.

Moreover, the current government in Baghdad seems grateful for Japan’s support, so the government-to-government connection is actually quite good. I’m not aware of any significant bilateral diplomatic crisis that the DPJ will immediately have to face.

Energy Relations

It appears that Japan and Iraq are going to be major partners in the oil and gas industries. The Japanese may prove to be one of the big winners in the scramble for Iraqi petroleum resources. If the Iraq War was a “war for oil,” then Japan appears set to be one of the winners in that war.

Less than a week ago, it was announced that the Mitsubishi Corporation accepted an invitation issued by the Iraqi Ministry of Oil to take a 5% stake in the proposed South Gas Utilization Project (SGUP) joint venture, now under development. This project will gather, treat, and process raw gas produced in Basra Province and sell the processed natural gas and associated products, such as condensate and liquefied petroleum gas, for use in the Iraqi and export markets. (We originally reported about this project in Shingetsu Newsletter No. 1304.)

A Mitsubishi statement said, “By capturing and processing this natural gas, the joint venture aims to create an important and reliable supply of domestic energy, reduce unnecessary greenhouse gas emissions, and create significant value for Iraq.” Presumably, the joint venture—in which Shell has a 44% stake—will also “create significant value” for Mitsubishi, although the approximate value of this deal was not reported in the media.

Of course, the really big fish that Japan is trying to net is the massive Nasiriya oil field. The latest spate of reports from earlier this week suggests that the consortium of Japanese companies led by the Nippon Oil Corporation, and including Inpex and JGC, have almost wrapped up the deal. Iraq’s Deputy Oil Minister Abdul Karim Louaibi has said that they are “very close” to signing the contract. In fact, all major issues are said to be resolved, and the big announcement is expected to come next month.

Production at the Nasiriya field is expected to reach 600,000 barrels per day, and if the deal is finalized, it would be the largest oil field development plan ever undertaken by a Japanese-led consortium. If all goes according to plan, the Nasiriya field alone is expected to supply no less than 10% of Japan’s total annual oil needs within a few years.

Last year, Iraq as a whole supplied only 1% of Japan’s oil and was thus the 12th largest national oil supplier to Japan. If Iraq should gain a 10% share of the Japanese market, that would put it in the top five oil suppliers on par with Iran or Qatar.

Japanese Aid and Investment

The reasons for Japanese companies’ interest in Iraqi oil are obvious, but why are Iraqi officials willing to consider Japan for such an important project?

It appears that Iraqi officials are trying to work out a sort of “grand bargain” whereby Japan will continue to provide Iraq with massive amounts of aid and loans, and also encourage private sector investment as much as possible. An Iraqi delegation led by Oil Minister Husain al-Shahristani and Industry and Minerals Minister Fawzi Hariri came to Tokyo in early July to secure such a bargain. Among others, they met with METI Minister Toshihiro Nikai.

The specifics of what the Iraqis have in mind were not reported, but we will no doubt hear more about these matters in the coming months.

The Gamble Continues

Junichiro Koizumi laid a long-shot bet on the new Iraqi government back in 2003. Six years later, that bet is faring much better than I, for one, would have expected. The relative success of Japan’s position in Iraq probably owes more to luck than anything the Japanese government did to ensure that success, but nevertheless it is difficult to argue with success.

But the gamble hasn’t ended. Having pulled out of Khafji and then Azadegan, the leading Japanese oil project in the Persian Gulf region by far will soon be the Nasiriya field in southern Iraq. Japanese companies—backed by public financing—are about to pour big money into Iraq, not even including the US billions in aid and loans. For this gamble to really pay off, it means that Iraq must remain relatively stable for the next decade or so. It is far from clear that this is going to happen.

Will the current Iraqi government maintain itself against the continuing insurgency? Will the political system break down under the competition for power among different factions? Will the national government in Baghdad and the Kurdistan Regional Government reach a stable modus vivendi without the nation falling back into civil war?

Japan is betting heavily that everything will work out reasonably well—and that’s the position that the DPJ is about to inherit.

APPENDIX ONE: RECENT MOFA STATEMENTS

Statement by Mr. Hirofumi Nakasone, Minister for Foreign Affairs, on withdrawal of the United States Combat Troops from Urban Areas of the Republic of Iraq
June 30, 2009

1. The Government of Japan welcomes the completion of withdrawing the US combat troops from urban areas of the Republic of Iraq by the deadline, June 30 (Tue), in accordance with the agreement between the two countries. This is a significant step forward for Iraq to be self-reliant, ensuring its own security.

2. The security situation in Iraq has seen overall improvement, however sporadic terrorist attacks continue, and Japan strongly hopes that Iraq achieves further consolidation of stability.

3. Japan will work for strengthening of bilateral relations with Iraq in wide-ranging areas including economic and business relationship, while continuing making efforts for reconstruction of Iraq through Yen Loans and technical assistance.

Dispatch of Monitoring Team for the Elections in the Kurdistan Region of the Republic of Iraq
July 24, 2009

In response to the request from the Independent Electoral Commission of Iraq (IECI), Japan will dispatch two diplomats of the Embassy of Japan in Iraq including H.E. Mr. Shoji Ogawa, Ambassador of Japan to the Republic of Iraq, to monitor the elections in the Kurdistan Region of the Republic of Iraq (the Presidential election and parliamentary election of the Kurdistan Region), which will be held on July 25 (Sat).

The monitoring team from Japan, in cooperation with other election observers, will be engaged in such activities as monitoring the situation of polling stations on the election day.

Statement by the Press Secretary on the bombings in Baghdad, Iraq
August 20, 2009

Japan is greatly shocked and indignant at the bombings on August 19 (Wed) in Baghdad, Iraq, which caused hundreds of casualties of civilians as well as Iraqi Government officials. Terrorism cannot be justified for any reason, and Japan reiterates its firm condemnation of these atrocious acts of terrorism that victimize innocent people.

Japan expresses its deepest condolences for those who have been killed by the attacks and to the families of the victims. It also expresses its heartfelt sympathy toward the injured and prays for their earliest recovery.

Japan expects Iraqi people mutually respect ethnic and religious groups and continue making efforts toward nation-building while promoting national reconciliation. Japan will keep its proactive support towards such efforts of the Iraqi people.

APPENDIX TWO: RECENT EDITORIALS

U.S. Pullout from Iraq
Asahi Shinbun
July 4, 2009

The June 30 deadline for American troops to leave Baghdad and other Iraqi cities and towns has been met. This represents the first step of U.S. President Barack Obama's promised withdrawal of all U.S. troops from Iraq by the end of 2011.

Six years after war broke out in Iraq, Iraqis are finally responsible for maintaining law and order in urban areas. This is an acid test of Iraq's ability to become truly independent. However, the pullout was accompanied by a series of terrorist bombings in and around Baghdad and the northern city of Kirkuk. Anti-U.S. militants, including armed groups affiliated with the al-Qaida network, are apparently trying to make their presence felt.

Iraqi voters will go to the polls at the end of this year or in January for the third Council of Representatives election since Iraq regained its independence.

It is no easy task to heal the deep wounds left by the war and terrorist attacks, which claimed more than 100,000 civilian casualties. Iraq will only be able to stand on its own feet if the election is held smoothly and all U.S. troops, numbering more than 130,000, leave the country. The success of this process must be ensured at all costs. That requires securing public safety. The task has been entrusted to Iraq's 650,000-strong security force.

While its members have received training by the U.S. military, many problems need to be ironed out. For one, the security force is composed mainly of Shiites, the majority group that holds control of the government. That is causing anxiety among Sunnis. On the other hand, the paramilitary force of about 100,000, which the United States organized in Sunni areas, largely remains to be integrated into the security force.

There is deep-rooted antagonism and distrust among Sunnis, who supported the regime of Saddam Hussein, and Shiites, who were oppressed by the regime, as well as Kurds. In 2006, intensified conflict among religious groups brought Iraq to the brink of civil war. The Iraqi government of Prime Minister Nouri al-Maliki needs to unify fragmented security organizations quickly and promote national reconciliation.

The U.S. forces, which organized the Sunni paramilitary force, have an obligation to work with the Iraqi government and promote its integration into the security force. At the same time, ensuring stability after the withdrawal of U.S. troops requires the engagement of Iraq's neighbors.

An international framework needs to be created among key players, including Arab nations, the European Union, Russia and Japan. The initiative should be led by the Obama administration, which has pledged to promote international cooperation. In particular, cooperation from Iran, which has strong influence over Shiites in Iraq, is essential. The United States and Europe have stepped up their criticism of Iran over the country's turmoil following the presidential election. It would be wrong, however, to shut the door to dialogue with Tehran over issues involving Iraq because of the election dispute.

The United Nations must also play a greater role. The organization was targeted for bomb attacks during the U.S. occupation of Iraq, causing it to pull out of the country. But the United Nations should draw on its experience in supporting national reconciliation and elections and other nation-building activities in countries torn by conflict.

The war against Iraq, led by the United States and Britain, created a rift in the international community, and it is still hampering postwar efforts to rebuild Iraq. Fresh diplomatic efforts should be made to build up international cooperation, in tandem with the withdrawal of U.S. forces.

A Challenge to Mr. al-Maliki
Japan Times
August 26, 2009

A series of bomb attacks in downtown Baghdad have exposed the weakness of the new Iraqi government. It is not clear who or what is responsible for the bombings, and the list of suspects is long. But a government's first responsibility is to provide for the safety and security of its citizens: By any measure, the Iraq government is not measuring up.

The explosions last Wednesday struck the very heart of the Iraqi state. A series of coordinated explosions — truck bombs and mortar fire — hit the most important ministries in the government, killing nearly 100 people and wounding more than 1,000 others. Two massive bombs targeted the finance and foreign ministries, a devastating rejoinder to the government's plan to remove most of the concrete barriers remaining in the city and restore some sense of normalcy. The scale of the attacks and the prominence of the targets suggest life in Baghdad will not be returning to normal anytime soon.

The question now is whether the savagery is intended to warn the government, to re-balance the political equation in the runup to parliamentary elections scheduled for next January or to turn the clock back to the virtual civil war that raged four years ago. Prime Minister Nouri al-Maliki blamed Sunni extremists and backers of former dictator Saddam Hussein for the attacks. Others see the hand of Shiite groups — co-religionists of the prime minister — who are battling Mr. al-Maliki for political supremacy.

No matter who is responsible, the attacks are a direct challenge to Mr. al-Maliki. They force all Iraqis to question whether the prime minister's government can secure peace. One of the first decisions taken by the government after the attacks was to suspend its plan to take down most of the concrete barriers that dominate the city.

Was Mr. al-Maliki's decision to push U.S. forces to withdraw from Iraq's major cities by June 30 premature, a political ploy to assert a sovereignty that the government, in reality, is not prepared to assume?

Two months ago, the answer seemed cleared. The surge of violence that followed the "surge" of U.S. forces two years had receded. Mr. al-Maliki's call for redeployment of U.S. forces made sense — as well as appealed to the political instincts of leaders in Baghdad and Washington. U.S. President Barack Obama had campaigned on a pledge to get the United States out of Iraq. Mr. al-Maliki saw a U.S. withdrawal as proof that his government was making progress and was indeed capable of governing. As the man who oversaw the restoration of Iraqi sovereignty, he was then positioned to capitalize on the success in elections next year.

More intense scrutiny raised serious questions about Mr. al-Maliki's government, however. Most obvious were concerns about the numbers and capabilities of Iraqi forces, both among the police and the military. They had little stomach for law enforcement or making peace. The decline in violence over the last year has encouraged carelessness and a false sense of confidence. When they did intervene, it was usually in sectarian clashes, promoting the image of a partisan and biased security force. The arrest of a dozen police officials in the aftermath of the attacks indicates that the danger is internal, rather than an external terrorist threat as the government had insisted.

Moreover, there is little indication that the government has made genuine efforts to promote reconciliation among the various Iraqi factions, or ethnic and religious groups. Instead, cohabitation within the halls of power reflects a division of spoils, rather than a genuinely nonpartisan approach to governing. The various groups have their fiefdoms; rewards hold the government together, not some shared sense of national purpose. The foreign ministry is run by a Kurd, lending credence to the notion that the violence is being triggered by conflicts over the spoils of power. Critics charge the government has not followed through on deals it has struck with Sunnis, and the attacks could be a warning to honor those arrangements.

It is not clear what Mr. al-Maliki can do. He needs an efficient and effective security force. The Iraqis do not seem capable of providing it yet. But he cannot ask the U.S. to come back into the cities and re-establish a presence. That would be too much of a retreat and could fatally undermine the prime minister. It would show that his initial decision was wrong and that he cannot govern on his own. In the strong-man culture of Middle Eastern politics, such an admission would be fatal to his political future.

The other option is working to establish a genuinely national government, one that transcends the sectarian mentality that has dominated Iraq for some time. That is a difficult, if not impossible, assignment, especially since it goes against Mr. al-Maliki's own instincts. But that is the only way that an enduring peace can be established in Iraq.