The timing and the leader involved in the visit to take Saudi-Japanese relations to the next level could not have been better — the two countries commemorated the 50th anniversary of diplomatic ties last year and Prince Sultan, then defense and aviation minister, was the first high-ranking Saudi official to visit Japan in 1960. In choosing Japan for his first foreign tour since assuming new office, Crown Prince Sultan is following King Abdullah’s trend of Riyadh making a concerted effort toward further warming relations with its Asian neighbors.
The importance of this visit lies in the two countries being heavyweights in their own right. Japan is a powerhouse with the world’s second largest economy, accounting for approximately one-seventh of the world’s GDP and contributing to about 10 percent of the world’s exports and imports. It is also the world’s third largest oil-consuming nation, accounting for over seven percent of global demand, apart from being a technological giant. On the other hand, Saudi Arabia is a major power in the Gulf and Middle East, as well as the Organization of Petroleum Exporting Countries by virtue of being the largest oil producer in the world at about nine million barrels a day.
At the bilateral level, Japan is the Kingdom’s second largest trading partner and investor, after the United States. Saudi Arabia supplies about one-third of Japan’s energy needs, with its imports amounting to about four million barrels a day.
Among the mega bilateral deals signed recently is the $10-billion PETRORabigh project — an integrated refining and petrochemical complex 200 kilometers from Jeddah — between Saudi Aramco and Sumitomo Chemical.
Saudi Arabia also could benefit from Japanese investment. With the Kingdom becoming the latest member of the World Trade Organization and the World Bank ranking in terms of attractiveness for foreign direct investment jumping from 67 to 38 in one year, the Kingdom could tap Japanese investors for the nearly $800 billion investments in various sectors over the next decade. Saudi Arabia is looking for investments and partnerships in desalination plants, water, power, health, education, infrastructure, information technology, civil aviation and railroads, many of the areas in which the Japanese also have the expertise.
In the political sphere, former Japanese Prime Minister Ryutaro Hashimoto called for “Comprehensive Partnership Toward the 21st Century” when he visited Saudi Arabia in 1997. In 1998, the two sides signed the “Japan-Saudi Arabia Cooperation Agenda.” And, in 2004, the two countries set up two Parliamentary Friendship Committees to promote their interests and hold consultations on a range of regional and international issues.
The relationship between the two countries is not limited to the bilateral level, but is international in scope. There is no doubt that oil served as a key factor in shaping and altering the relations between Japan and the Gulf countries, but it is an oversimplification to analyze it solely from the energy perspective. With time, Tokyo gradually concentrated its effort in diversifying potential cooperation with the region, including increased investment and human contact, thereby laying grounds for closer interdependence. In fact, it will not be an exaggeration to suggest that one of the characteristics of Japan’s relations with the region lies in the fact that they were often determined less by issues of bilateral concerns, and more by wider regional and international developments.
In the realm of international relations and regional issues, Japan and Saudi Arabia see eye to eye on the Palestinian crisis, with Tokyo urging the international community to help achieve a comprehensive settlement based on the UN Security Council resolutions 242 and 338, and more recently encouraging the recognition of the Hamas government following the group’s sweeping victory in the parliamentary elections in January. Apart from being a regular donor, Japan dispatched a team to help monitor the elections and also provided about $1 million to facilitate the vote in Palestine.
With regard to the Gulf, Tokyo has sought to redefine its security interests since September 2001. As laid out in the 2002 Okamoto Report, Japan’s future Middle East diplomacy would be involved in supporting “the removal of the threat of global terrorism originating in the Middle East”, and work for “energy security, through the promotion of friendship with Gulf nations, such as Saudi Arabia”. The report also committed Japan to “aiding Iranian moderates in their efforts at reform”.
The change was evident in Japanese military being engaged in Iraq’s noncombat spheres, making it Tokyo’s first deployment overseas since World War II. In 2005, Japan cancelled nearly $7 billion of Iraqi debt, amounting to 80 percent of its claims. Further, it pledged about $5 billion to support Iraq’s reconstruction effort. Apart from an eye on oil, the reconstruction mission may have been a way of the pacifist nation exerting global clout beyond being a mere aid donor, but Japan’s plans to pull its troops from Iraq as early as May and no later than end-2006 will be another dent in the US-led coalition’s efforts to stabilize Iraq.
The other worrying factor is Iran, which supplies more than 15 percent of Japan’s oil, making it the third-largest supplier. In 2004, Tokyo struck a $2-billion deal with Tehran to grant a Japanese consortium rights to develop the Azadegan oilfield. Despite nuclear proliferation concerns, Tokyo’s rationalization for signing the deal was that Tehran had agreed to accept additional inspections from the International Atomic Energy Agency. But the whole issue has been laid bare since then. Saudi Arabia could impress upon Japan the concerns of the Gulf Cooperation Council countries with regard to the nuclear issue and the fallout of a possible conflict over the same. These concerns are identical to the Japanese fear of expansion of the nuclear zone. Tokyo could advice Tehran of the virtues of accepting an inspection system involving the application of comprehensive safeguards, which it has been adhering to for decades.
Japan also cannot ignore Iran’s connections with North Korea not only in the nuclear arena, but also in the exchange of missile technology. Iran’s Shahab 3 missile is reportedly a North Korean Nodong. Statistics suggest that North Korea now has about 200 Nodongs threatening Japan.
At another level, Saudi Arabia’s growing ties with China could become a vehicle of better communication between Beijing and Tokyo in the future. Japan and China are increasingly economically interdependent, but their relations are uncomfortably poised. Political tensions, territorial rivalries, competition over energy resources, and military build-ups provide the ingredients for a 21st-century Oriental remake of the Cold War, which will serve the region no good. Since Saudi Arabia is a key contributor to the economies of both countries, offers a platform to both to be co-investors, and maintains an equitable political relationship, Riyadh could play the role of an honest powerbroker in case of a crisis.
Summarizing the existing and impending ties, Japanese Prime Minister Junichiro Koizumi highlighted last year the “historic and unshakable relations” and added, “We look far ahead into the future where our excellent relations will be even more essential to international society.”
In an era of rising oil demand coincided with very high prices and security volatility in the neighborhood of both countries, the importance of Saudi-Japanese relationship at the bilateral and international levels could not have been better expressed.
— Abdulaziz Sager is the Chairman of the Gulf Research Center in Dubai.
