Japan and GCC: A mutually beneficial partnership

Japanese Pavilion at Dubai's Global Village at night. (Shutterstock)
Updated 28 October 2019

Japan and GCC: A mutually beneficial partnership

  • Saudi Arabia's sovereign wealth fund PIF is one of the largest investors in SoftBank's Vision Fund
  • A YouGov poll reveals Arab underestimation of Japan's dependence on Gulf energy supplies

LONDON: Japan and Gulf countries are building on their economic ties with new projects of mutual benefit, from headline-grabbing deals to a commitment to long-term partnerships.

An indication of the buzz that surrounds the two countries’ relationship is the speculation that Saudi Arabia is considering Tokyo as the international site for Aramco’s IPO, which is expected to be the largest in history.

A more concrete and equally attention-grabbing example of the growing relationship between the countries has been Saudi Arabia’s investment in SoftBank’s Vision Fund, owned by Japanese businessman Masayoshi Son.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, is one of the largest investors in the Vision Fund, and Son is expected to invest heavily in the Kingdom in the coming years.

Such ventures form part of the two nation’s plans for close economic partnership, which have been formalized under Saudi-Japan Vision 2030 – part of the crown prince’s Vision 2030 that aims to diversify Saudi Arabia’s economy.

Saudi Arabia and Japan have historically been close because of the latter country’s dependence on oil. Japan, which is lacking in natural resources, imports 85 percent of its oil from the Gulf, of which 40 percent comes from Saudi Arabia.

Interestingly, the Saudi public underestimate Japan’s dependence on their country’s oil. A poll by YouGov and Arab News found that only 32 percent of Saudis are aware that in 2018 the GCC produced 85 percent of Japan’s oil, with 49 percent of respondents placing the figure much lower at 40 percent.

All indications are that the partnership between Japan and the GCC will continue to grow. Looking at recent trends, there is reason to be optimistic about prospects for expanding economic cooperation in the future.

For instance, Japan was Dubai’s seventh largest trading partner in 2018, with bilateral non-oil trade increasing by 44 percent to reach $11 billion last year, compared to 2011.

The number of Japanese companies registered with Dubai Chamber has risen steadily to 131. These figures reflect a growing confidence in Dubai as a preferred business hub attracting Japanese firms and investors looking for growth opportunities.

Commenting on UAE-Japan business relations, Hamad Buamim, president and CEO of Dubai Chamber of Commerce and Industry, said: “Dubai-Japan ties have gone from strength to strength in recent years, supported by high-level visits from both sides, the easing of visa restrictions, the expansion of direct flights between the two countries and the signing of strategic cooperation agreements.”

As for Saudi Arabia, its growing relationship with Japan is largely a result of its efforts to transform its economy away from oil, as embodied in its Vision 2030 plans.

When the Saudi-Japan Vision 2030 project was formally announced in March 2017, a publication on the proposals from the Saudi Ministry of Foreign Affairs highlighted Japan as the “ideal partner” for Saudi Arabia as it “seeks opportunities to diversify and strengthen its economy by capitalizing on advanced and cutting-edge technologies,” due to its “knowledge capital, and technological competitiveness.”

For Japan’s part, “the Saudi-Japanese cooperation would help the Japanese economy identify and develop opportunities to further upscale Japanese investments in Saudi Arabia.”

A good example of this type of economic exchange is Saudi Arabia’s investment in SoftBank’s Vision Fund, which in turn will see SoftBank investing in Saudi’s new high-tech city NEOM.

Some commentators see Saudi Arabia looking to Japan as a model as it moves beyond oil toward technology and “knowledge-intensive” industries. Writing in the Japan Times last month, Kent E. Calder, director of the Reischauer Center for East Asian Studies at Johns Hopkins University in Washington, spoke of “how seriously the Saudis are thinking of a world beyond oil, and how significantly Japan looms as their mentor in that regard due its efficient use of resources, even though the two countries contrast sharply in their hydrocarbon reserves.”

In seeking to diversify its economy toward “knowledge-intensive” industries, Saudi Arabia is following Japan’s own move in this direction in the 1970s, Calder said.

Many of the initiatives that form part of Saudi-Japan Vision 2030 are designed to facilitate this transition. In an interview with Arab News earlier this year, Tsukasa Uemura, Japan’s ambassador to Saudi Arabia, drew attention to institutions that are helping to transfer Japanese technology and expertise to the Kingdom. These include the Saudi-Japanese Automobile High Institute in Jeddah, which teaches young Saudis to become engineers, and an industrial robotics training facility.

“Through these projects, I believe that a lot of our experience and knowledge in the field has been transferred to Saudi researchers and students,” Uemura told Arab News in June.


Camel herding in Western Sahara a passion with pedigree

Updated 21 November 2019

Camel herding in Western Sahara a passion with pedigree

  • In the Western Sahara, a local adage holds that he who has no camel, has nothing
  • "Camels can endure everything: sun, wind, sand and lack of water, and if they could talk, you’d easily hear how intelligent they are,” says herder

DAKHLA, Western Sahara: In the Oued Eddahab desert in Western Sahara, Habiboullah Dlimi raises dairy and racing camels just like his ancestors used to — but with a little help from modern technology.
His animals roam free in the desert and are milked as camels always have been, by hand, at dawn and dusk.
When camels “feed on wild plants and walk all day, the milk is much better,” said the 59-year-old herder, rhapsodizing about the benefits of the nutrient-rich drink, known as the “source of life” for nomads.
But Dlimi no longer lives with his flock.
He lives in town with his family. His camels are watched over by hired herders and Dlimi follows GPS coordinates across the desert in a 4X4 vehicle to reach them.
He is reticent when asked about the size of his herd. “That would bring bad luck,” he said.
He prefers to speak of the gentleness and friendliness of the animals he knows like his own children.
“Camels can endure everything: sun, wind, sand and lack of water, and if they could talk, you’d easily hear how intelligent they are,” he said.

A camel is silhouetted against the sunset in the desert near Dakhla in Morocco-administered Western Sahara, on Oct. 13, 2019. (AFP / FADEL SENNA)

"The desert knows me"
Dlimi comes from a long line of desert dwellers from the Ouled Dlimi tribe.
As tradition dictates, he lists his ancestors going back five generations when introducing himself.
“I know the desert and the desert knows me,” he said.
Like elsewhere, the nomads of Western Sahara are settling, following a shift from rural to urban living.
“Young people prefer to stay in town,” Dlimi said, and herders now mostly come from neighboring Mauritania, whose desert north is traversed by caravans of up to a thousand camels.
Even they “often demand to work in areas covered by (mobile phone) network signal,” he added.
The population of the nearby town of Dakhla has tripled to 100,000 in 20 years, with growth driven by fishing, tourism and greenhouse farming encouraged by Morocco.
In this part of Western Sahara, development projects depend entirely on Rabat.
Morocco has controlled 80 percent of the former Spanish colony since the 1970s and wants to maintain it as an autonomous territory under its sovereignty.
The Polisario Front movement fought a war for independence from 1975 to 1991 and wants a referendum in which the people of Western Sahara choose between independence and integration with Morocco.
The United Nations has been trying to negotiate a political compromise for decades.
Like many in his tribe, Dlimi has family members on the other side of the Western Sahara Wall separating the Moroccan controlled areas from the Polisario controlled areas.
He favors loyalty to Morocco while others back independence, he said.
Tribal affiliation trumps politics, though.
“Tribes are tribes, it’s a social organization,” he said. “There are very strong links between us.”
To “preserve the past for the future,” Dlimi started a cultural association to conserve traditions from a time when there were no borders and “families followed the herds and the clouds.”

A camel herder guides his flock in the desert near Dakhla in Morocco-administered Western Sahara on Oct. 13, 2019. (AFP / FADEL SENNA)

The irony
While Dlimi loves the desert, he does have one complaint: “The camel dairy industry is valued everywhere in the world except here.”
Camel milk is trendy with health-conscious consumers and the lean meat is excellent, Dlimi claims.
Today though, it is small livestock farming that is the main agricultural focus, in response to what non-nomadic Moroccans tend to eat.
The 266,000 square kilometers (106,400 square miles) of Western Sahara under Moroccan control hosts some 6,000 herders, 105,000 camels, and 560,000 sheep and goats, according to figures from Rabat.
In other arid countries, including Saudi Arabia, intensive farming of camels has taken off.
But, while Moroccan authorities have undertaken several studies into developing Western Sahara’s camel industry, these have not so far been acted upon.
Regardless, a local adage holds that he who has no camel, has nothing.
“Some say that Saharans are crazy because when they have money they spend it on four feet,” Dlimi jokes.
For him, 20,000 dirhams ($2,000) spent on a camel is a safe investment.
But it is also a consuming passion.
His Facebook page and WhatsApp messages are filled with talk of camel husbandry techniques, research and racing.
Racing “is a pleasure and it pays,” Dlimi said.
Since the United Arab Emirates funded construction of a camel racing track at Tantan, 900 kilometers (560 miles) to the north, racing animals have appreciated in value and can sell for up to 120,000 dirhams, according to Dlimi.
To train his racing camels, Dlimi chases the young animals across the desert in his 4X4.
The technique has made him an eight-time champion in national competitions, he said.
But camels can be stubborn, Dlimi stressed, telling of how he once sold his best champion for a “very good price,” but the animal refused to race once it had changed hands.