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Japan infiltrates the Middle East

Foreign Policy In Focus | May 24, 2007

Japan Infiltrates the Middle East

Shirzad Azad

Japanese Prime Minister Shinzo Abe’s recent Middle East tour was the second trip to the region by a Japanese prime minister in less than 16 months. By visiting five Arab nations in a single trip and pursuing a wide range of economic, political and strategic objectives for his country, Abe opened a new chapter in Japan’s Middle East policy.

Tokyo’s desire for a stable supply of energy has run up against its other foreign policy objectives. While Tokyo was a big supporter of the Bush administration’s invasion of Iraq, it is uncomfortable with Washington’s hard-line approach toward Iran. After all, Iran is Japan’s third-largest supplier of crude oil. As it angles to become a more moderating influence in Middle East politics, Japan may find itself butting heads more often with the United States.

Thirsty Japan

Topping Abe’s agenda on his recent trip was seeking new ways of securing energy supplies for Japan. Tokyo has long been dependant on the Middle East for most of its oil imports, and Japan’s increased demand for natural gas is likely to deepen its dependence on that turbulent and volatile region. Japan is the world’s largest importer of natural gas, and roughly 90% of its oil needs come from the Middle East. Japan is worried that the emergence of newly energy-hungry economies of Asia, especially China and India, may challenge its long-term access to crude oil and natural gas in the countries surrounding the Persian Gulf area.

Japan has many good reasons to worry about the supply of its economy’s lifeblood. It may face serious consequences from the new energy rush and the prospect of reaching peak global oil production, particularly in the face of rising competitors in Asia. For example, China alongside India and Iran form the triangle of Asian ancient civilization. China has a long history of trading with the Middle East that goes back many centuries to the Silk Road era. Many Chinese citizens are now working in oil-producing Arab countries. And China’s rising political power, stemming from its economic growth, has tempted autocratic rulers of Middle East countries to develop their relationship with Beijing, hoping to balance the West’s long-term interference in the region.

Japanese companies have lost part of their Middle East markets to Chinese goods. For instance, according to current trends, China will likely replace both the United States and Japan as Saudi Arabia’s top trading partner by the end of this decade. Other countries in the region may also follow the suit, in the same way that Iran replaced Japan with China as the biggest importer of its oil.

Like China, India has a considerable labor force working in the Middle East, and the influence of its cultural affinity and soft power in the region outweighs other East Asian countries. After all, the symbol of India, the Taj Mahal built in 1631 in memory of Iranian princess Mumtaz Mahal, is but one example of the historical connections between the Indians and Middle East nations.

Such concerns have forced Japan to reconsider its Middle East strategy and broaden its involvement in the region to include non-oil investments. Abe went to the region, for instance, with a large delegation of 175 businessmen led by Fujio Mitarai, head of the Japan Business Federation. This symbolic gesture indicated just how eager Japan is to forge multi-layered ties with the region that go far beyond energy deals and economic necessities. Trade officials in Tokyo have also voiced support for a free trade agreement (FTA) with six oil-producing countries of the Gulf Cooperation Council (GCC) in the Middle East, starting in 2008 with Saudi Arabia and the United Arab Emirates. Japan’s Asian arch-rivals, China and India, have already started negotiations on FTAs with the GCC countries, while the Japanese only launched such negotiations in September 2006 with a focus on agriculture and goods.

Japan has developed other tactics. For instance, Abe’s visit to Saudi Arabia, followed by Trade Minister Akira Amari two days after, included an offer to King Abdullah that Saudi Arabia’s state-run oil company use part of Japan’s oil-stockpiling facility in Okinawa prefecture as a base for export to other Asian countries. Due to the rapid growth in its mostly oil-based national income, Saudi Arabia is likely to be excluded from receiving Japan’s official development assistance (ODA) in 2008. So Japan is scrambling to find other ways to sweeten economic deals with the world’s number one oil exporter.

Burnishing a Tarnished Image

Prime Minister Abe’s trip to five Muslim countries of the Middle East was driven, at least in part, by a desire to improve Japan’s tarnished image in the region. Japan’s staunch support for what has internationally been recognized as an illegal and illegitimate war in Iraq came as a shock to many people in the Middle East. By giving its full-fledged endorsement, Japan far outstripped some key Western allies like Germany and France in recognizing the U.S. invasion and occupation of Iraq in 2003.

Former Japanese Prime Minister Koizumi even resorted to the same kind of sophistry as the Bush administration to justify the invasion. “Just because we cannot find Saddam Husein, it doesn’t mean he doesn’t exist,” Koizumi said, at a time when the Iraqi leader was still at large. “Therefore, we cannot say that there are no weapons of mass destruction.” Japan had long boasted of a relatively neutral role in Middle East affairs, but siding with the United States damaged Tokyo’s slight advantage in the region.

Japan’s policy toward the Iraq War has been full of many ironies. The primary purpose of dispatching Japanese troops to Iraq was to offer humanitarian support and help the Iraqi people reconstruct their country. Japan withdrew its Ground Self-Defense Forces (GSDF) from Iraq last July and has kept about 200 members of Air Self-Defense Forces (ASDF) there. Japan’s rationale for its reconstruction mission to Iraq might have been stronger if the GSDF had direct contact with Iraqis and if the ASDF were not stationed at Ali Al Salem Air Base in Kuwait mainly to serve the American occupying forces in Iraq.

At a speech in Kyoto in early February, Japanese Foreign Minister Taro Aso called U.S. policy in Iraq “immature,” just days after Defense Minister Fumio Kyuma said that the war was a “mistake.” Despite such genuine statements, the cabinet of Prime Minister Abe, in which both ministers are members, unanimously approved the deployment of Japan’s ASDF in Iraq for two years beyond the current July 31 deadline.

Quandary over Iran

By avoiding the country altogether, Shinzo Abe’s Middle East tour sent a signal to Iran. With 11.5 percent of the total, Iran is still Japan’s third largest provider of crude oil. Saudi Arabia and the United Arab Emirates stand in first and second place with 31.1 percent and 25.4 percent, respectively. Despite a friendly relationship and close ties between Tokyo and Tehran, however, no Japanese prime minister has visited Iran since the Islamic republic came to power in 1979.

Former Iranian President Mohammad Khatami, visited Japan in 2000, but Japan has so far been reluctant to pay back the visit. During his visit to Tokyo in 2000, when he announced that his government would give Japan preference in negotiations over the development of the Azadegan oilfield, it was as if Khatami had given Japan special access to one of the biggest untapped reserves as a hostess gift. Japan enthusiastically welcomed this proposal and in a matter of month the Japan National Oil Corporation signaled its agreement to participate in the project. But when Japan’s Inpex Corp signed the $2 billion deal in February 2004 to develop Azadegan, the United States tried to block the contract, which was so crucial to Japan’s energy security. To develop and ship its own oil needs has become one of the key objectives of Japan’s energy policy.

With the United States pushing for greater isolation of Iran, however, Tokyo had no option but to cancel the Azadegan contract. It continues to hope for a peaceful settlement to Iran’s nuclear stalemate so that Inpex can regain its lost stake in the Azadegan oil project. “Japan today enjoys good relations with Iran,” Abe told The Washington Post in April, “and would like to exercise whatever influence it has on the Iranians to try and work toward a peaceful resolution of the (nuclear) issue.”

Japan has shown a keen desire to play a role in defusing the standoff and has employed its diplomatic skills and economic muscle to dissuade Iran from going nuclear. Japanese Foreign Minister Taro Aso has used a special diplomatic channel with his Iranian counterpart Manouchehr Mottaki, who once served as Tehran’s ambassador to Tokyo from 1994 to 1999. He invited Mottaki to Japan last year and sent Deputy Foreign Minister Mitoji Yabunaka to Iran last month. On the stick side, Tokyo has cancelled some loans, frozen financial transactions with Tehran, and applied punitive UN measures such as sanction resolutions.

The United States is pushing Japan toward greater engagement in the Middle East. Despite its support of the Iraq fiasco, Japan’s reputation in the region is far better than that of the United States, and many people in the Middle East still feel positively about the role it can play. Washington wants Tokyo, a trusted ally, to shoulder some of the economic and security burdens. More importantly, Japan is the preferred U.S. candidate among Asian powers to penetrate an increasingly eastward leaning Middle East. In providing advanced technology and investments that the region desperately needs, Japan has an advantage over India and China in this new rivalry for Middle East influence.

Shirzad Azad is an East-West Asian relations researcher at Aoyama Gakuin University Graduate School of International Politics, Economics and Communication in Tokyo.

 source: FPIF