Newsletter No. 673
News-Analysis
July 12, 2007

 

JAPAN AND IRAN -- DIALOGUE AND MORE DIALOGUE

The Bush Administration may be reluctant to have a dialogue with the Iranian government, but Japan is engaged in a series of ongoing dialogues, with new announcements appearing frequently.

The two most recent of these dialogues are as follows:

Iran-Japan Committee on Nuclear Disarmament and Weapons of Mass Destruction

The 7th meeting in this series was held at the Foreign Ministry building in Tokyo for no less than five hours on the 10th. The main topic was that “the two sides discussed ways to send back Iran's nuclear case to the IAEA.” According to IRNA, the talks may not have been that smooth as “the Iranian delegation dismissed the UN Security Council resolutions, reiterating that sanctions against the country over its nuclear activities are illegal.”

(It is the Iranian government’s contention that its nuclear program is purely for civilian energy purposes and therefore it is their right to pursue nuclear development as guaranteed under Article IV of the 1968 Treaty on the Non-Proliferation of Nuclear Weapons (NPT). They therefore view the imposition of UNSC sanctions -- in the absence of any clear evidence that they have broken the terms of the treaty -- as an illegal act.)

The Japanese side was led by MOFA’s Director-General for Disarmament Takeshi Nakane and the visiting delegation was headed by Deputy Foreign Minister and Director-General of Political and International Affairs Hamid Baeidinejad. In addition to the main issue, they also discussed regional and international cooperation on nuclear disarmament and the 2010 NPT review conference.

They agreed that the 8th meeting of the joint committee would be held in Tehran.

The 4th Japan-Iran Human Rights Dialogue

The 4th Japan-Iran Human Rights Dialogue was held on July 6th at the same Ministry of Foreign Affairs building. In this case, the Japanese side was led by Ambassador in charge of UN Affairs Masato Kitera and the Iranian side by Advisor to the Minister of Foreign Affairs and Director-General for International Women Affairs and Human Rights Tahereh Nazari. Although this dialogue is the fourth in the series, it hadn’t been held since June 2004.

Nazari is said to have “outlined achievements and developments in the fields of women rights and Islamic values for women in Iran.”

She was quoted directly by IRNA as follows: “Holding the 4th session of Iran-Japan Human Rights Committee is an appropriate opportunity to continue talks and exchange views between the two countries on human rights… Improvement of women’s position in the Islamic Republic of Iran is an instance of the achievements of the Islamic system of human rights.”

For his part, Kitera “expressed Japan's readiness to bolster cooperation with Iran on various fields of human rights and stressed the importance of holding such regular talks. He said difference between various cultures and states is normal but countries should prepare the ground for getting acquainted with each other through discourse. He added developments in the Middle East and the Persian Gulf regions are very important to Japan.”

They also agreed that the 5th session of Iran-Japan Human Rights Committee would be held in Tehran.

AZADEGAN: THE DOG THAT DIDN’T BITE

I think that it is time to mention one issue about which we have not seen any headlines lately -- and it is the very absence of those headlines that is noteworthy. I am speaking, of course, about the Azadegan oil field which so dominated our attention last year.

In truth, there has been a small story on Azadegan this week. Tehran announced that the first of six exploration wells drilled in the Azadegan oil field became operational at a rate of 3,000 barrels per day. An Iranian oil official also said, “Within the next four months, five more wells will become operational. It is forecast that in three phases of this field, 300 oil wells will be drilled.”

This oil extraction is being carried out by the National Iranian South Oil Company. Inpex still maintains a 10% stake in the project, but they are no longer the operators.

The story here is that neither China nor France nor anyone else has quickly swooped down on the giant Azadegan field as many -- including me -- were predicting last year.

During the intense negotiations last year, Iranian negotiators hinted relentlessly that Chinese investors were more than willing to step in if Japan pulled out. Some Japanese officials accepted this line, and others were skeptical. I myself felt that in light of the high prices for crude oil and the growing international competition over upstream resources, that the Iranian threat was very credible.

But it doesn’t seem to have turned out that way. No one has rushed in. Apparently, India’s Essar Group is currently talking with Tehran about Azadegan, but it is not clear if this is going to lead anywhere.

The problem for Tehran is twofold. Most importantly, it seems that the US-led sanctions effort is having a serious effect by driving away those international oil companies that otherwise would be happy to work in Iran. American and Israeli talk of strikes on Iranian nuclear facilities and the possibility of war is spooking everyone, and this means that Iran cannot effectively recruit the foreign help that it needs.

Secondly, there is some evidence that the Iranian government is itself mismanaging its oil development. It seems that the Ahmadinejad regime is pretty incompetent, and has a tendency to appoint ideological allies to important positions over qualified professionals. I would speculate that Iran’s oil problems may be related to gross mismanagement rooted in corruption and political cronyism.

A senior Iranian oil official recently told the press that Iran’s oil production capacity will fall by five percent a year without new investment.

What all this means is that Tokyo seems to have been given a reprieve on political punishment for its decision to pull out of Azadegan. It could have been much more embarrassing if a Chinese company in particular had quickly taken over the Inpex stake. As it is, it now seems apparent that the Iranian position is much weaker than we had earlier believed. Perhaps Japanese companies will not find it very difficult to reenter the Iranian market when they choose to do so. Iran now looks like they will need help in this sphere.

JETRO MAY HELP IRAN ENTER THE JAPANESE AGRICULTURAL MARKET

A short report from the Mehr News Agency says that Gen Shimada of the Japan External Trade Organization (JETRO) promised in a meeting with Trade Promotion Organization of Iran Director-General Mehrdad Jalalipur that he would help Iranian foodstuffs to enter the Japanese market. The report is no more specific than this, but it did state that Iran would participate in two international food fairs in Japan within the current year.