Newsletter No. 454
News-Analysis
December 3, 2006

 

A NEW ERA IN JAPAN'S PERSIAN GULF POLICIES?

Unless I'm greatly mistaken, some change may be afoot in Tokyo as regards their Persian Gulf policies. A series of articles below seem to indicate that some Japanese policymakers are finally beginning to awaken from their slumber and realize that quietly riding on the back of US policy is not the panacea for all their troubles in that region.

The quote that excites me is that of Nihon Keizai Shinbun editor Yuzo Waki: "China is aggressively trying to spread its influence in the Gulf. Japan underestimated the importance of the region. We must re-establish our relationship with Gulf countries." -- Hallelujah!

Although it may be regrettable that it took a challenge from China to finally awaken Tokyo to realities that should have been apparent to them long ago; at least I can say, "Better late than never!"

But if a significant change from the post-9.11 policies really is underway, then how did that actually come about? Where is it heading? Here at the Shingetsu Institute, we will certainly have time and occasion to address these questions in detail in the future, and the thoughts of the larger Shingetsu membership will be quite welcome.

The first two articles below were carried in Gulf News of the UAE. One thing I would like to point out is that my prediction that the "Japan-China Cold War" would endure under Shinzo Abe's premiership is clearly being fulfilled. At the time of Abe's visit to Beijing, some commentators rushed to proclaim that a truly new era in Japan-China relations was dawning which would leave the political strains of the Koizumi Era behind. The logic of these articles doesn't reflect such a positive change, does it? These articles are consistent with my own analysis that Abe wishes to challenge China, but will do so in a more "strategic" manner than Koizumi was ever capable of.

The final article regards Japan-Kuwait relations. The Kuwait News Agency now seems to have a full-time reporter in Tokyo -- Miyoko Ishigami -- and so we may expect better coverage of Japan-Kuwait relations from now on.

JAPAN TO CHALLENGE CHINA IN THE GULF
By Shakir Husain

Dubai: Japan wants to use its "soft power" to fight China's growing influence in the Arab world. Offering help in developing industrial technologies and education systems will be the main Japanese weapons in its new battle with China in the Middle East. "Japan's traditional relationship with Arab countries is based on importing oil and exporting electronics goods. We want to change it," Yoshifumi Sato, director of planning at the Japan Cooperation Centre for the Middle East (JCCME), told Gulf News during a recent Dubai visit.

Re-establishing a Relationship

He said Japan cannot offer military help to Arab countries because such a move would violate the country's pacifist constitution. However, it is keen to help the Gulf countries in diversifying their economies through technology transfer. Japan also wants to encourage people in the Gulf to learn more "about Japan," beyond their knowledge of Japanese products.

"China is aggressively trying to spread its influence in the Gulf. Japan underestimated the importance of the region. We must re-establish our relationship with Gulf countries," said Yuzo Waki, an editor with Japanese media corporation Nihon Keizai Shinbun. Japan's strongest ally the United States has similar concerns as China is developing new alliances with energy producing countries in the Middle East and Africa. China is investing in Iran's energy sector despite American opposition, while Japan's biggest oil explorer Inpex reduced its stake in Iran's Azadegan oilfield from 75 per cent to 10 per cent.

Waki believes people in the Mideast may be looking for "some counterbalance" as the US has had "too much presence" in the region since the 1991 Gulf War.

TOWARDS A JAPAN-GCC PARTNERSHIP
By Abdullah al-Madani

According to several Japanese and Gulf officials and non-officials who participated in a recent symposium organised by Japan Bank for International Cooperation (JBIC) in Dubai, Japan and the Gulf Cooperation Council (GCC) could sign a Free Trade Agreement (FTA) in the first half of 2007.

Such speculation is based on the fact that the two sides have already launched negotiations to have the FTA in place. The first round of negotiations was held in Tokyo in September and a second round could be held in Riyadh by the end of this year. It is also based on reports confirming the absence of serious differences between the two parties during the first round of talks, and saying that all issues to be discussed in the second round are only of a technical nature. In other words, there is no issue of dispute that may block the road or delay the agreement. In the FTA negotiations between Japan and other countries, for example, the Japanese fought to keep import tariffs for farm products to shield their weak and uncompetitive farmers from a flood of cheaper agricultural imports. This, of course, is not valid in the case of Japan-GCC talks, simply because the GCC states are not agricultural exporters.

More important, however, is Tokyo's eagerness to conclude the pact as soon as possible, something that is largely fuelled by an intensifying rivalry with China over securing energy resources. The latter has succeeded in recent years to cement and diversify its economic cooperation with the GCC states, and has been negotiating a FTA with them since April 2005. Realising Beijing's growing economic position in a region, from where more than 70 per cent of their energy requirements come, the Japanese seem to be very concerned about the inclusion into the proposed FTA of a GCC pledge to preferentially supply crude oil to Japan, especially in the cases of crises and wars. This can be viewed within Tokyo's growing concerns about how the Iranian nuclear crisis will play out. Should international sanctions be applied against Tehran, Japan would be forced to freeze its economic cooperation with Iran, including a $3 billion deal signed in early 2004 to develop and exploit Iran's massive Azadegan oilfield.

Significant Impact

Regardless of what propelled the Japanese to speed up FTA talks with the GCC states, the proposed pact will have significant impact on the two parties' bilateral economic ties. Currently trade between the two regions stands at nearly $90 billion, making GCC Japan's fourth largest trading partner by region. The GCC's investment in Japan accounts for $25 billion, while Japan's investment in the GCC states is around $10 billion. With the elimination of, or reduction in, tariffs and removal of other barriers, these figures are expected to double.

On the other hand, an FTA between the two regions is expected to positively affect cultural, educational, scientific and social exchanges, enshrining two-way openness and technology transfer and creating knowledge opportunities for GCC nationals. This will certainly serve Japan's new Gulf policy initiated in 2002 and aimed at playing a role in the security and stability of the region through developing bilateral cooperation in areas other than commerce and energy.

In line with this initiative, Tokyo launched in 2003 a Japan-Arab Dialogue Forum as an informal means to explore ideas and strengthen cultural and socio-economic ties with the Arab world in general. The forum has so far held three meetings in Tokyo, Alexandria and Riyadh respectively.

However, given the fact that the Gulf region's economies, problems, development requirements, and the nature and scope of its relations with Japan differ from those of other Arab countries, Tokyo is invited now to establish a dialogue forum confined to intellectuals, think-tanks, and NGOs from Japan and the Gulf. Such a forum will definitely facilitate free exchange of views, promote mutual understanding, and consequently boost bilateral cooperation within the FTA.

With the setting up of a Japan-Gulf free trade zone, Tokyo is also called to widen its contribution to development programmes in the Gulf through Japan's bilateral Official Development Assistance (ODA). Since the Middle East has been listed among recipient regions for aid from Japan in 1972, ODA channeled billions of dollars in the form of loans and grants to many Arab countries with the aim of stabilising their economies and ensuring domestic and regional stability.

The Gulf states have been excluded on the plea that that they have a high per-capita GNP, despite the fact that Gulf countries such as Bahrain and Oman do not enjoy such a status. This was changed in 1996 only to allow the GCC states to receive technical aid. However, even such aid has not yet reached the level and scope of that provided to countries like Egypt, Jordan, or Yemen which are strategically and economically less important to Japan.

Dr Abdullah al-Madani is an academic researcher and lecturer on Asian affairs.

JAPAN ATTACHES IMPORTANCE TO RELATIONS WITH KUWAIT
By Miyoko Ishigami

TOKYO, Dec 1 (KUNA) -- Japanese Prime Minister Shinzo Abe's special adviser on national security Yuriko Koike said Friday her country attaches much importance to ties with Kuwait and renewed Japan's commitment to further boost bilateral relations.

Koike made the remarks during her meeting with Wael Al-Sagar, Co-Chairman of the Kuwaiti-Japanese Businessmen's Committee, at the premier's office in Tokyo. She also extended her gratitude for Kuwait's continued support in its troops' reconstruction aid mission for Iraq.

Koike accepted an invitation by Foreign Minister Dr. Sheikh Mohammad Sabah Al-Salem Al-Sabah and Chief of the National Security Apparatus Sheikh Ahmad Fahad Al-Ahmad Al-Sabah to visit Kuwait next year, which was conveyed by Al-Sagar. She last visited Kuwait in 2004 as Environment Minister to discuss bilateral cooperation on environmental issues.

Koike, who is known as an expert on Arab and Islam, who is fluent in Arabic, asked Kuwaiti government for support on Japan's bid to get permanent UN Security Council membership.

In the meantime, she welcomed the recent cease-fire agreed between Palestinians and Israel to end five months of hostilities in Gaza Strip, and expressed hope that the agreement will lead to progress in the peace process in the Middle East.

A 19-member business delegation, led by Al-Sagar, was in Japan for the annual meeting with its Japanese counterpart, at which the Kuwaiti side laid out its new approach to become the financial and investment center of the GCC and mega projects for constructing a network of railways and metro services in the country.

The members also attended a ceremony to sign a memorandum of understanding to implement the environment education program in Kuwaiti elementary schools.