Newsletter No. 421
News-Analysis
October 25, 2006

 

The following is a round-up collection of recent stories on Japan-Iraq relations.

TOKYO BETS ON IRAQI OIL

Iraqi Oil Minister Hussain al-Shahristani has been visiting Tokyo amid the news that the Japanese government will extend a large part of its planned US$3.5 billion in loans to Baghdad to upgrade its oil infrastructure. This does not represent a new commitment of money, but rather part of the package announced earlier. Concretely, some of this aid is now expected to finance a refinery in Basra (US$17.6 million) and a fertilizer plant (US$153.5 million) among other projects. The full US$3.5 billion is expected to be allocated by the end of 2007 (assuming, of course, that the “New Iraq” lasts that long).

Iraq is currently exporting 2.4 million barrels of oil a day, and is aiming for 3 million by the end of the year. These levels are comparable to Iraqi oil production on the eve of the 2003 invasion. Oil Minister Shahristani made clear what Iraq intends to do with any increases: "Our increased production will be for the Asian markets." However, Iraqi oil is not yet reaching the Japanese market.

In regard to the current visit, Deputy Press Secretary Tomohiko Taniguchi made the following comments: “The prime purpose for his visit of course is to sell the possibility that there is hope in the oil industries in Iraq, and therefore you must invest in our oil industry; that is the powerful message that he has promised to give to the business community here in Japan… You must have an economic engine that is working in order for you to stabilize the situation, so we understand that his visit is going to be an important one, and I hope that the Japanese business community is going to be even more supportive of Iraq developing the oil industry.”

For background on Japan’s involvement in the scramble for Iraqi oil since 2003:

Arabian Oil Company signs technical support contract with Iraqi Oil Ministry
June 2005 -- Shingetsu Newsletter No. 15

First indications that Japanese ODA will focus on the oil and gas sectors
June 2006 -- Shingetsu Newsletter No. 313

Indication that JAPEX extended a technical support contract with the Oil Ministry in March
July 2006 -- Shingetsu Newsletter No. 343

METI officials admit that Japanese aid is tried to a hunt for future oil contracts for private companies
August 2006 -- Shingetsu Newsletter No. 352

MOFA OFFICIALS “NOT VERY OPTIMISTIC” ABOUT THE FUTURE OF IRAQ

An exchange between a reporter and the MOFA spokesman on October 20th has given the first public indication that the Foreign Ministry isn’t completely out of touch with the realities in Iraq. The current policy seems to be “publicly, we still have hope; privately, we expect disaster.” That’s not much of a policy, but for Tokyo it is more about the US alliance than anything else. Things may change quickly in November, depending on the results of the US midterm elections.

Reporter: I have a question about the Republic of Iraq and the analysis of the Iraqi situation here… What is the feeling here about this developing situation in Iraq, specifically Baghdad?

Tomohiko Taniguchi: Overall, in general terms, I must say that some people within the Ministry of Foreign Affairs are not very optimistic, but at the same time we do see a situation where hope still exists. There is the possibility that the fledgling administration of Iraq may grow with the help and support of the international community. You may call it wishful thinking, but we still hope that that is a remaining possibility… But I should not deny the obvious fact that there still have been suicide bombings and terrorist attacks in Iraq, especially, as you point out, in Baghdad, so we have heightened our effort to provide, for instance, security to the Japanese Embassy people. That testifies that we are not relaxed at all in looking at the situation, which I admit is deteriorating, not ameliorating.

LADIES AND GENTLEMEN, WE GOT HIM! -- THEN LOST HIM

Shingetsu Newsletter No. 204 announced the capture of Husain Fahmi Badr, the alleged killer of the Japanese backpacker Shosei Koda. Back in March there were congratulations for the Iraqi government on its success in taking a rather gruesome killer off the streets, and creating the prospect of accountability in the Koda case.

Well, the Asahi Shinbun reported on the 7th of this month that the suspect seems to have “disappeared” from Iraqi government custody. Badr was expected to have been put on trial by now, but he hasn’t been seen in public for a long time. Official Iraqi sources have been giving contradictory stories. The Asahi report speculates that Badr may have escaped somehow -- Oops!