SEMINARS

Training and education in international affairs:
Japan, Palestine and the Middle East (1999)

Japanese Policy in the middle East 

Japanese foreign policy towards the Middle East[1] shows a slow but incremental change over the years, with the most significant political shift following the Desert Storm Operation of 1991. Although change of policy is usually related to new events or circumstances, the new Japanese approach towards the Middle East should be regarded as a continuation of several facts within the new internal and external politi­cal frame­works. The continued Japanese de­pend­ency on the Middle East for its oil crude im­ports and the extreme interdependence be­tween its market and those of the Middle East, com­bined with certain new internal (changes in Japanese politics) and ex­ternal (structural sys­temic changes) cir­cum­stances led to a ‘new ap­proach’ in Japanese foreign policy. This new approach to the Middle East, including Israel, is manifested mainly in Japan’s participation in the peace process as a co-organizer. In spite of this high political profile, which is now higher than at any time in the past, the Middle East is still relegated to secondary importance within Japa­nese foreign policy. How­ever, one cannot dis­miss or underestimate the real changes that are taking place.

New Japanese Political Approach          

Three principal elements are responsible for Ja­pan’s new political approach and attitude to­wards the region: Japanese oil and commercial interests in the region, domestic changes in Ja­pan, and the new international situation follow­ing the end of the Cold War.

1.       Oil and Commercial Interests

Since the end of World War II, Japanese de­pendency on crude oil as its main energy source has been enormous. In 1973, the year of the first oil crisis, crude oil and petroleum products ac­counted for 77.4 percent of the total energy con­sumption. In 1990, they represented over half the energy needs, i.e., 58.3 percent, a figure that is expected to drop to 47.7 percent by 2010.[2] In spite of the gradual decline since the 1970s, crude oil accounts for a large portion of the total energy consumption in Japan. In addition, Japan is totally dependent upon foreign sources for its oil needs; currently it imports 99 percent of its oil.[3] In 1995, the Middle East accounted for about 78.6 percent of its total oil imports, thereby underlining the region’s vital importance to Japan.

The emergence of regional and international cir­cumstances in the early 1980s, such as struc­tural changes in the international oil market, the fall and near collapse of oil prices since 1986, eco­nomic difficulties within major oil producing countries, and Japanese reduced oil vulnerabil­ity, created a new more balanced mutual de­pend­ency relationship between Japan and the oil-produc­ing countries in the region. Although Japan’s de­pendency upon Middle East oil has been de­clin­ing for the last 15 years, ensuring a cheap and stable oil supply has remained one of the most impor­tant goals of Japanese foreign policy.

Likewise, Japanese exports to the Middle East, although not accounting for a significant seg­ment of total Japanese exports, are still impor­tant with regard to reducing Japan’s trade deficit with the area. Bilateral trade exports and imports for the fiscal year 1982 between Japan, Saudi Arabia and the United Arab Emirates (UAE), each one re­spec­tively, emphasizes this argu­ment[4].

Although 1982 is regarded as one of the high trade deficit years of 1973-1993, at the same time this year accounts for the highest share of exports to the Middle East (12.2 percent) in total Japanese exports in this period[5]. As such, politi­cal and economic stability in the Middle East continues to be crucial for Japan. From the be­ginning, Japan has been actively involved in the Middle East Peace Process by providing political as well as economic support, but one could question the timing of the changes. Part of the answer can be found in the emergence of new po­litical changes inside Japan and systemic changes in the international arena.

2. Domestic Political Changes

One-party dominance ended in 1993 when the Liberal Democratic Party (LDP), which had ruled Japan since 1955, lost its hegemony. The demise of a strong central power led to political fluidity manifested by weak governments and the strength­ening of the national bureaucracy. On the other hand, this situation facilitated the emer­gence of internal debates concerning the need for rewards and recognition of Japanese contri­butions to the Middle East. As Akifumi Ikeda argued, pressure was put on Japanese policy makers to “Seek a say for Japan’s pay.” “Since we had to pay a good part of the bill for the Gulf War, why did we not get the thanks and respect that we deserved?”[6]Such open debates became possible largely due to the absence of the tradi­tional ideological opposition, the Japan Socialist Party (JSP). In June 1994, the Social Democratic Party (SDP), the new name for the JSP, joined the LDP Party and formed a new government in which Tomiichi Muruyama, President of the SDP served as prime minister. This new political align­ment led to the SDP re­nouncing its erst­while ideological premises. Mu­ruyama’s endorse­ment of a conservative status quo position raised the question concerning the distinctiveness of the left-wing socialists from the LDP. The SDP’s accep­tance of the Japan-US Security Treaty and its recognition of the for­mal status of the defense forces and their activi­ties in international peace-keeping operations (PKO), led to Japanese po­litical participation abroad. The dispatch of Self-Defense Forces (SDF) personnel to the Golan Heights and other trouble spots become easier thanks to the demise of vociferous internal oppo­sition.[7] Coalition changes in January 1996 have been almost ir­relevant to this present situa­tion because of the continuation of the same par­ties in the coalition. Likewise, the October 1996 gen­eral election renewed the LDP domination in the new Diet (parliament).[8]

3. The International Arena

The end of the Cold War and the disintegration of the Soviet Union helped alleviate the tradi­tional Japanese dilemma regards the Middle East. As Michael Yoshitsu argued,[9] in the past, Japan had to choose between the need to ac­commodate the political demands of key oil-producing coun­tries in the Middle East in order to secure energy requirements or to follow American policy in the Middle East. In most cases, those two positions were contradictory. The timing of the Middle East Peace Process, which began within a new sys­temic order, en­abled Japan to commit itself po­litically in the region without paying a high price. In other words, without risking its bilateral rela­tions with the United States, Japan is able to secure its oil supplies from the region. Japan’s willingness to adopt an independent political stand in the re­gion is free of potential recrimina­tions on the part of the parties involved. As Yohei Kono, Deputy Prime Minister and Minister for Foreign Affairs remarked in January 1995:

“The end of the Cold War has enabled Japan to expand its foreign policy options. No longer will Japan make foreign policy decisions based merely on its identity as a ‘member of the West’. To make the right decisions on foreign policy issues, Japan needs to firmly establish values and principles in assessing its own national interest. Such values and principles need to be cultivated by the Japa­nese themselves.”[10]

The end of the Cold War created a whole range of new political opportunities, mainly with re­gard to regional balances of power. There no longer being a superpower struggle, which in the past inevitably led to local countries playing a zero-sum-game of aligning with the United States or the Soviet Union, not only the United States, a tem­porary exclusive superpower, but different re­gional powers such as China and Japan had to readjust their polices.

Asia as a sub-system is not an exception to this emerging political realignment. Regional com­petition and rivalry between China and Japan for leadership status in Asia is leading Japan to seek international recognition. This can be seen by the loud Japanese demand that it be allowed to become a permanent member of the United Na­tions Security Council. In the words of Kono:

“Japan should become a permanent member of the United Nations Security Council, in order to so­lidify global cooperation as a major pillar of Ja­pan’s foreign policy. The United Nations Security Council is the only organization that can make de­cisions with binding force. Further, in the mainte­nance of international order, it is not the over­whelming military might of some countries that is playing a major role, but concerted international action towards such destabilizing factors. There­fore, it is inappropriate that a country like Japan, which is playing a prominent role in such interna­tional cooperation, is not permanently engaged in the United Nations Security Council.”[11]

In this context, Japan’s participation in the Mid­dle East Peace Process is an extremely effective tool for accomplishing this goal. Prime Minister Muruyama’s visit to the region in September 1995 was seen, in some Japanese quarters, as a tour to gain the approval or support for the Japa­nese bid for a Security Council position. The question remains to what extent could the com­petition between Japan and China for a leader­ship role affect Japanese political attitudes to­wards the Middle East in general and towards Israel in particular?

Japan and the Middle East

Since the late 1980s, Japan has followed ‘a new approach’[12] towards the region and its relations, especially with the oil-rich Persian Gulf states, have moved from unilateral dependency to a more balanced mutual dependency relationship. A set of domestic and regional factors facilitated this shift. Inside Japan there was a significant improvement in its vulnerability with regard to oil imports. As William Hogan pointed out, oil imports have two distinct consequences: de­pendency and vulnerability. Since dependency is not the same as vulnerability, reduced depend­ence contributes to oil security only by reducing the cost of interruptions or by creating excess capacity that could reduce the effective size of a given interruption.[13]

Although Japan did not succeed in reducing its dependency on oil imports, it went a long way toward reducing its vulnerability. This reduced vulnerability became a reality because of inter­nal legislation that permitted and ensured effi­cient oil consumption,[14] which included a mix of fiscal, regulatory and voluntary measures. The Petroleum Supply and Demand Adjustment Law, for example, enables the government to imple­ment compulsory demand restraint meas­ures such as consumption restrictions on large consumers, restrictions on gasoline supplies and the rationing and allocation of petroleum sup­plies. Second, the stockpiling of petroleum re­serves improved Ja­pan’s ability to cope with potential shortfalls. For instance, The Petroleum Stockholding Law (1978) obliges major oil re­fineries, oil market­ers, oil importers and LPG importers to maintain emergency stocks equiva­lent to 70 days of the previous year’s domestic consumption. Mean­while, The Petroleum Sup­ply and Demand Ad­justment Law gives the power to the government (Ministry of Interna­tional Trade and Industry, MITI) to order stock­draw by companies in a de­clared emergency and/or under the International Energy Program triggered crisis.[15]

The battle to moderate oil prices and competi­tion between consumers during scarcity situa­tions, real or fabricated, become easier in the presence of stockpiles. Stockpiling strategy is seen not just as a solution for crisis situations but rather as a deterrence measure to signal to the oil producing countries that political blackmailing of the con­sumers by creating artificial scarcity will be very costly for all the parties involved. During the 1991 Gulf War, the IEA-coordinated Energy Contingency Plan showed its ability to respond to a potential oil crisis. This was possi­ble partly because the IEA members, including Japan, low­ered stockholding obligations for com­pulsory stocks held by companies by four days of con­sumption, to meet the IEA commit­ment.[16] This sort of action was intended to glut oil markets in case of crisis and sub-crisis situations to avoid price rises, even in the absence of an increase in demand.

In addition, since the early 1980s there has been a continuous decrease in the share of oil in total Japanese energy consumption. This is related partly to the development of new alternative en­ergy sources such as nuclear, natural gas liq­uids (NGL), geothermal energy etc. This relative change can be seen in Table 1.

When comparing the share of oil and nuclear en­ergy in the total energy consumption, it is es­sential to underscore two trends. One, there is an adverse correlation between the consumption of oil and nuclear energy. While there is a continu­ous decrease in the former, the latter is increas­ing considerably. Second, there is an impressive shift towards nuclear energy consumption, which by 2000 is expected to grow more than 20 times in comparison to 1973, while the share of oil is expected to fall by a third.

Furthermore, the OPEC (Organization of Petro­leum Exporting Countries) and oil producing Persian Gulf states are also undergoing radical changes. Close to 70 percent of Japanese crude oil imports come from the six Gulf Cooperation Council (GCC) countries, namely, Bahrain, Ku­wait, Oman, Qatar, Saudi Arabia and the UAE.[17] However, since the late 1980s two distinct factors have limited this Japanese dependency: one, the drastic decline in oil prices since the beginning of the 1980s and the petrodollar bubble and explosion brought profound financial difficulties to the Gulf coun­tries, leading to high budget deficits; and two, the oil producing countries are highly dependent on exports as their primary source of revenue.[18] The Arab oil producing coun­tries ‘cannot drink their own oil’ and hence they are very interested in sustaining a high rate of oil exports to con­sumer countries, especially to countries such as Japan, which need huge quan­tities of oil over undetermined periods of time. As Elihayu Ka­novsky pointed out, “There has, indeed, been an oil shock since 1982, but for the oil-exporting countries, not the oil importers.”[19] Beginning from the early 1980s

“sellers do not have the power to raise prices be­cause they ‘need’ more money; and prices are de­termined by total supply and demand forces. Even a mo­nopolist has limi­ta­tions with respect to price setting, and OPEC is not a mo­nopoly.”[20]

These two develop­ments led to a more bal­anced re­la­tionship between Ja­pan and the GCC coun­tries than the one that had ex­isted in the past. They also en­abled Japan to re­orient its policy to­wards Is­rael and the peace process without ex­posing itself to any significant political risk or cost.

Japan and Israel

The Japanese-Israeli relations can be classified according to four stages.[21] The first stage (1952-1972) was largely symbolic. Though there were diplomatic relations between the two, with Israel opening a mission in Tokyo in 1952,[22] the rela­tionship was devoid of any real political content and there was a lack of cultural understanding between the countries. The second stage (1973-1979) largely coincided with the first and second oil shocks, which raised a whole range of new negative attitudes in Japan towards Israel. Ja­pan’s interest in Middle East oil imports, to­gether with Arab political demands, compelled it to comply with the Arab economic boycott against Israel, even though there was no Japa­nese commitment to breaking diplomatic rela­tions with Israel as demanded by the Arabs. During the third phase that extended until the Kuwait crisis, there were certain improvements in the relationship between the two, with Japan remaining very committed to the Arab boycott. According to Willy Stern “Compli­ance with the boycott is not only a result of Japan’s depend­ence on oil.”[23] He argued that the Arab markets for Japanese consumer goods and the Japanese unfamiliarity with the actual op­erations of the boycott also contributed to Japan’s compliance with the Arab boycott against Israel. In spite of the boycotts, the trade volume between Japan and Israel increased by more than 50 percent in 1986, which was partly due to the Japa­nese per­ception of the importance of the Jew­ish lobby in the United States and its possi­ble importance for Japanese relations with Wash­ing­ton. Moreover, Japan became more aware of the Arab inability to punish it for its non-compliance with boycott demands.

The fourth and current stage began with the 1991 Desert Storm Operation. Two principal factors are seen to be responsible for Japan’s new ap­proach towards Israel. One, the Iraqi in­vasion of Kuwait enabled Tokyo to recognize the dis­unity inside the Arab World. The Desert Storm Opera­tion was unique in the sense that the Arab coun­tries went to war between themselves under the political and strategic leadership of an exter­nal power, namely the United States. Japan began to realize that the Arab-Israeli conflict is not the only factor that endangers stability in the Middle East. In addition, the Israeli behavior during and after the crisis and its avoidance of any military response against Iraq during the war were highly appreciated by Japanese policy makers and by the Japanese media.[24] Instead of “a country of desert and war”[25] for a while Israel became ‘a victim’ of the inter-Arab conflict. Second, the Middle East Peace Process, which began in the autumn of 1991 or a few months after Desert Storm, entered a new phase with the signing in September 1993 of the Oslo Accord between Israel and the Pales­tine Liberation Or­ganization (PLO). This mutual recognition en­abled Japan to involve itself in the peace process and contributed to the intensifica­tion of political contacts between Israel and Japan.

Additional economic and political factors led to an improvement in the relations between the two countries. Growing high-level political contacts[26] opened a new bilateral dialogue that included Japan’s declaration that it would rethink its policy concerning the Arab boycott (agreed during Prime Minister Yitzhak Rabin’s visit in Decem­ber 1994), the signing of a scientific cooperation agreement and the opening of the Israeli Stock market to Japanese investment. In April 1994, both countries signed an agreement on double taxa­tion, and they are currently negotiating a civil aviation agreement. The security coopera­tion be­tween the two countries took a significant turn as a result of Japan’s participation in the peace process and its dispatch of SDF personnel to the Golan Heights in February 1996 within the frame­work of the United Nations Disengage­ment Ob­server Force (UNDOF).

In spite of the prolonged recession in Japan, the economic dialogue between the countries has im­proved since 1993.[27]Japanese participation in the peace process coincided with the willingness of international companies to participate in the exe­cution of different projects for the develop­ment of regional infrastructure. The National Agency for Science and Technology of MITI delegation to Israel, the Keidanren (Japan Fed­eration of Eco­nomic Organizations) delegation’s visit in April 1993 as well as the political ex­changes between deputy Foreign Minister of MITI Hatakeyama and Foreign Minister Shimon Peres in Novem­ber 1992 strengthened growing economic con­tacts. However, 1995 can be re­garded as a turning point in the commercial and economic relations between the two.

Israeli exports to Japan burgeoned in 1995, hav­ing increased by 33 percent over 1994 and reached US$1.2 billion; most of the increase was in the hi-tech sector. The export to Japan of ma­chinery and tools increased by an impressive 42 percent amounting to US$172 million and elec­tronic equipment practically doubled to US$67 million.[28]

Prime Minister Muruyama’s visit to Israel in September 1995[29] led to an agreement to open a representative office of JETRO (Japan External Trade Organization) in Israel by 1997. This move is seen by the Israeli economic sector as having the potential to encourage large Japanese trading companies to enter the Israeli market. The visit of Foreign Minister David Levy to Tokyo in late February 1997 marked the first official contact between the two countries since the establishment of the new Israeli government, led by Benyamin Netanyahu.

To what extent could a deadlock in the peace process affect the recent achievements in Japa­nese-Israeli relations? Japanese disappointments regarding recent political developments were explicit as well as public. On 26 February 1997, Ken Shimanouchi, spokesman of the Foreign Ministry, outlined the Japanese reaction to the deadlock in the peace process as follows:

“The decision made by the Government of Israel regarding the construction of housing at Har Homa in eastern Jerusalem is regrettable. The Govern­ment of Japan has repeatedly expressed its posi­tion concerning the need for both parties to the peace process to refrain from any action, such as the expansion of settlements, which would preju­dice the outcome of the final status negotia­tions. Japan will continue to take part in the inter­national effort to underpin the peace process by taking every opportunity to talk with the parties con­cerned, and by extending assistance to the Pal­es­tinians in the West Bank and Gaza Strip.”[30]

Against this background, the Japanese Govern­ment decided to send Deputy Foreign Minister Shunji Yanai to the region to play a role, albeit modest, in helping to put the process back on track. During his visit to Israel on 3 April he re­iterated Japanese concern over “the current diffi­culties and rising tensions between the Gov­ern­ment of Israel and the Palestinian Authority in the wake of the Israeli decision to go ahead with the Har Homa Housing project.”[31]

Although some disagreements have arisen re­cently between the two countries, such as those pertaining to the civil aviation agreement, they can hardly be linked to the deadlock in the peace process. This does not mean, however, that po­tential damage to bilateral relations is no longer present. On the contrary, there are several po­tential sources of instability. There is still pro­found reluctance within the Japanese economic community to invest in the Israeli market be­cause of the possible renewal of the Arab boy­cott. This psychological fear was strength­ened as a result of the political changes in Israel follow­ing the defeat of the Labor Party in June 1996. The con­tinuing deterioration of the peace process is lead­ing to the resurgence of Arab rhetorical claims against Israel. For example, in April 1997, the Arab Foreign Ministers’ Meeting in Cairo rec­ommended that the Arab states should cease normalizing relations with Israel and restore the economic boycott.[32] Such devel­opments could have harmful effects upon the newly emerging Israeli-Japanese economic co­operation.

In this regard it is important to note that as in the past, the Japanese Government still suggests that although the MITI has a powerful influence over Japanese companies, the latter are able to make independent decisions concerning whether they are willing to take risks when dealing with Is­rael. In other words, it is up to the companies concerned to respond to Arab boycott demands. This formal position is rather questionable be­cause trade relations, including private ones, be­tween Japan and any foreign country, need tacit government approval. A key example is the JETRO, a nonprofit government-related organi­zation that promotes trade and economic rela­tions between Japan and other nations. Since JETRO had not received formal blessing until 1997, there was no direct private Japanese in­vestment in Israel. However potential damage due to the dead­lock in the peace process will not appear as Japa­nese compliance with a ‘new’ Arab boycott of Israel but rather as a reluctance on the part of Japanese private companies to invest in Israel, a country that is still regarded as belonging to a region that lacks politi­cal and eco­nomic stabil­ity. As a result, the future devel­opment of Japanese-Israeli relations largely de­pends on the Japanese evaluation of the im­por­tance of its continued par­tici­pation in the peace process as a means of promoting the Japa­nese international position and its recognition that cooperative relations with Israel could en­hance its bilateral relations with the United States.

Japanese Policy Towards the Peace Process

An important if not crucial expression of the new Japanese attitude towards the Middle East can be found in Japan’s participation in the peace proc­ess.[33] Since its inauguration in Madrid in Octo­ber 1991, Japan has been trying to con­solidate peace in the Middle East. Its efforts in­clude pro­viding support to the parties involved, as well as playing a major role - along with the United States, the European Union (EU) and other countries - in creating the frameworks for re­gional cooperation on the multilateral track of the Middle East Peace Process and active par­tici­pation in re­gional economic summits and other venues. Japanese policy towards the peace process is guided by five basic principles:

1.       Political support to the process:

Japan urges the leaders of Middle East countries to negotiate, recognizing that the most important element of the peace process is bilateral nego­tiations among the parties involved. Constant declarations by the Foreign Ministry on the need to maintain and advance the negotiations be­tween the different parties are an integral part of the Japanese position towards the Middle East.

2.  Japanese participation in the multilateral negotiations and working groups:

Since the Moscow conference in January 1992, Japan has been taking part in four of the five working groups as a co-organizer country (the exception being the working group that deals with regional security). Besides its active contri­bution in the field of environment and tourism, Japan presides over the Environment Working Group (EWG) and serves as deputy in the Re­gional Economic Development Working Group (REDWG), Water Resources Working Group (WRWG) and the Refugee Working Group. As pointed out by Prime Minister Tomiichi Mu­ruyama during his Middle East visit,

“In multilateral negotiations, which complement bilateral negotiations, Japan wishes to play a part in building that foundation. In the light of this thinking, Japan proposed to draft an environ­mental code of conduct, which was adopted as ‘The Bahrain Environmental Code of Conduct for the Middle East’ at the Environmental Working Group meeting in Autumn 1994... Furthermore, in the Tourism Workshop of the Working Group on Regional Economic Development, Japan intends to continue consultations with the regional parties with the view to establishing a regional tourism association, which has been considered in the workshop under the chairmanship of Japan.”[34]

Some specific examples of Japan’s contribution to the multilateral negotiations and working groups include:

·       Upper Gulf of Aqaba Oil Spill Contingency Project (EWG)

·       Project to combat desertification (EWG)

·       Conference and symposium on the promo­tion of tourism in the Middle East (Tourism Workshop of REDWG)

·       Support for the establishment of the Middle East Desalination Research Center (WRWG)

3.   Economic assistance to the Palestinian Authority (PA):

Japan has been one of the largest financial con­tributors to the PA. In 1993, it announced that it was going to give a US$200 million aid-package to the Palestinians during 1994-95.[35] In 1996, Japan was the second largest aid donor after the United Sates.[36] Foreign Ministry spokesman Ken Shimanouchi stated,

“The Government of Japan has decided to extend an emergency grant-in-aid totaling US$11 million to the United Nations Development Program (UNDP) Japan-Palestinian Development Fund to assist the Palestinians who are now facing diffi­culties such as rising unemployment. The aid will be used to finance projects in the area of employ­ment creation in Hebron, Bethlehem and Gaza. Ja­pan’s cumulative aid to the Palestinians since 1993 now stands at US$270 million.”[37]

Japan also accepted Palestinian trainees and helped them to develop administrative skills and human resources in fields such as environment and education while the Japanese joined the in­ternational monitors that oversaw the January 1996 Palestinian Council elections. Furthermore, at the ministerial conference for the support of the Palestinians held in the same month, Japan pledged more than US$56 million by the end of March 1997.

4.  Economic assistance to the Arab parties in the Middle East Peace Process:

Japan places a high priority on economic assis­tance to the Arab countries of the area (Egypt, Jordan, Syria and Lebanon) to underpin the Mid­dle East Peace Process.

·       Egypt: Egypt receives the greater part of the Japanese Official Development Assistance (ODA) in the Middle East, approximately US$79 million in 1994. Technical coopera­tion involved the Cairo University Pediatric Hospital and the building of a new bridge over the Suez Ca­nal. Japan is Egypt’s prin­cipal donor, providing some US$34 mil­lion grants in fiscal 1995.

·       Jordan: Japan is Jordan’s principal donor and provided around US$34 million in grants in 1995. In 1994, it granted US$124 million as loans for the expansion program at the Aqaba thermal power plant and the Energy Sector Adjustment Program. It granted a US$215 million loan to stabilize the Jorda­nian currency and another US$106 million loan to implement the second stage of the Aqaba thermal power plant. Technical co­operation takes place in fields such as health, communications (like the recon­struc­tion of the Allenby and Hussein bridges) and agriculture. Also implemented are third-country training programs for Pal­estinians in the electric power field.

·       Syria: Japan is Syria’s main donor. It gave US$23 million in grants during 1994 and provided a loan of approximately US$471 million for the building of Az-Zara and Jander thermal power plants during 1995.

·       Lebanon: In February 1995, Japan sent dip­lomats to its Beirut Embassy. A few months later it sent two teams, one to explore eco­nomic cooperation and another to survey loans, to Lebanon. It is interested in taking part in the international committee for the reconstruction of Lebanon.

Besides these bilateral arrangements, Japan was an active player in the Middle East and North Africa Economic Conferences held in Rabat (1994), Amman (1995) and Cairo (1996). It has also supported the establishment of the Bank for Economic Cooperation and Development in the Middle East and North Africa, which will en­courage a flow of private funds into the region and be conducive to the support of peace in the region. The Cairo Economic Conference de­clared in November 1996 that the bank would start functioning by 1997.[38]

5.   Japanese participation in the UN peacekeeping, Golan Heights:

In February 1996, Japan dispatched a ground Self-Defense Force and other personnel to the UNDOF stationed on the Golan Heights. Their mission is to provide secondary support for staff and transportation for UNDOF. The 43-member Japanese transport platoon is stationed at Camp Ziouani in Israel and Camp Faouar in Syria.

In order to understand Japanese participation in the peace process it is essential to stress some central issues. Do Japanese policy makers have a better understanding of the Middle East as a result of their involvement in the region? Will Japan’s participation place it as a major external player in the Middle East? If there is a constant deadlock or even cessation of the peace process, could complete identification with it harm Japa­nese interests? It appears that answers to these questions are in the negative.

Despite Japan's new political attitude to the re­gion, the past Japanese perception of being ‘a latecomer’[39] to the region, which helped to ex­plain its low political commitment in the region, is presently used to explain Japan's political limitations. However, instead of defining itself as a ‘latecomer’, Japan is now calling itself a ‘new­comer’[40] to the Middle East. This ‘new­comer’ stand represents a two-fold message. One, being a newcomer, Japan still finds it very difficult to understand the cultural and political trends in the region such as schisms in the Arab World, Arab political culture, social and internal problems such as diverse ethnic groups within one politi­cal framework, the gap between wealthy Gulf countries and their lack of political stability, etc. At the same time, being a new­comer to the region makes it difficult for Middle East countries to appreciate the Japanese contri­bution to the region in comparison to other Western countries. For example, Japan claimed that Israel underestimates its contribution to the peace process and treats the Japanese as secon­dary to the American and European contributors.

One might therefore conclude that although it has used a ‘carrot and stick’ approach to pro­mote its interests in the region, Japan feels that it is still regarded as a secondary influence in the Middle East. This is partly due to the profound psycho­logical roots of its dependent relations with the region that has made it politically vul­nerable for a long time. Japan finds it difficult to employ pu­nitive measures because in its compe­tition with China for international recognition, it is inter­ested in being recognized as a prominent power by the Middle Eastern coun­tries. This pre­vents it from taking any serious ‘stick meas­ures’ to per­suade the partners to ac­celerate the peace process. As such it is primar­ily concerned with the multi­lateral working groups while reminding itself that the success or failure of the whole process will depend upon the bilateral negotia­tions over which it has no influence.

China and Japan at the End of the Cold War

The emergence of China as a superpower, as manifested by its nuclear capabilities, expanding navy, and its territorial assertions in the South China Sea,[41] is becoming a real political problem for Japan today. To the Chinese potential one can add further sources of regional instability, such as the situation in the Korean peninsula, the con­centration of military forces, including nu­clear arsenals, unresolved territorial disputes, potential regional conflicts and the proliferation of weap­ons of mass destruction in the region. In the words of Morihiro Hosokawa, former prime minister and Diet member belonging to the New Frontier Party:

“Until World War II, Japan’s destiny was largely determined by our relations with China. In fact, the most serious issues Japan may confront in the future may well be those related to China. China, as our huge neighbor in the Pacific, will undoubt­edly develop the industrial base and armaments commensurate with its large size and huge popu­lation. Over the past hundred years, China has had a history of difficult trials and tribulations. It is a history in which nationalistic impulses have not been entirely fulfilled. Hence I think it is neces­sary to pay sufficient attention to the latest desires of the Chinese State and the instability this intro­duces to Asia.”[42]

Analyzing Chinese and Japanese relations with the Middle East leads to several questions. To what extent could the present Sino-Japanese com­petition over political, economic or strategic lead­ership in Asia affect Japanese policy to­wards the Middle East? To what extent are the Chinese and Japanese interests towards the re­gion diverse, competitive or complementary? In addition, what potential implications could the Middle East have on the Sino-Japanese balance of power and in what areas?

Chinese and Japanese Interests

in the Middle East

Both countries have a common interest in pro­moting political and economic stability in the Middle East, not only to protect the uninter­rupted flow of oil, especially to Japan, but also to enable greater access to local economic mar­kets. As pointed out by Zhongqing Tian,

“Since the adoption of her open door policy, China has taken steps towards attaining three eco­nomic objectives in the Middle East; to sell more of her products in the rich market of the Middle East; to export her surplus labor to the Gulf coun­tries; and to attract as much investment as possible from the state and private sectors of Arab coun­tries.”[43]

Although there are some common goals between Japan and China, there is no actual cooperation towards the realization of these objectives. This can partly be explained by their different politi­cal approach to the region. While Chinese influ­ence is based primarily on strategic goods such as arms transfer and technology,[44] Japan seeks influence through trade and commercial interests and its role as a potential bridge between the region and the United States.[45]

In this sense, the establishment of diplomatic re­lations between China and Israel on 24 January 1992 could be seen partly as a result of Chinese recognition of America’s influence and position in the Middle East. Israel’s first ambassador Zev Sufott recounts an interview of Foreign Minister Qian Qichen with the People’s Daily in June 1991. Summarizing China’s policies towards the Middle East, the minister said, “The most impor­tant thing is for the United States, which has a great influence on Israel, to play a greater role.”[46]

Sufott commented on this remark as follows:

“Qian’s comments, carefully phrased as they were, could only indicate China’s acceptance of the major American role and initiative in the Middle East Peace Process, her giving priority to peaceful solu­tions rather than the assertion of a role of her own in the process, and her acquiescence in the subor­di­nation of UN auspices to other frame­works.”[47]

Middle East and Sino-Japanese

Balance of Power

The Middle East is likely to affect the Sino-Japa­nese balance of power in three distinct are­nas, namely strategic and military positions, ri­valry for political leadership, and economic com­peti­tion. Although the estimates of Sino-Israeli mili­tary transactions are often exagger­ated,

“Israel’s ability and willingness to provide com­patible and advanced technology ... became an at­tractive proposition [for China]. Upgrading vari­ous weapons and systems supplied by the former Soviet Union and developing effective counter meas­ures are the two important aspects of Israeli specialty.”[48]

One cannot underestimate the impact of the Sino-Israeli military cooperation on Japanese security calculations. This raises the question of possible Japanese rearmament to counter any threats from China. The existing international system with the United States as the sole dominant power has not proved its ability or willingness to protect Japan as it did during the Cold War years. The signing on 15 April 1996 of the US-Japanese Agreement Concerning Reciprocal Provision of Logistic Sup­port, Supplies and Services between the SDF of Japan and the American armed forces did not im­prove the situation. Reviewing the evolv­ing po­litical and security environment, it declared that the American President and Japa­nese Prime Min­ister agreed that a continued Ameri­can military presence is essential for the preserving of peace and stability in the Asia-Pacific region. In re­spect to Okinawa, where American facilities and areas are highly concen­trated, the Prime Minis­ter and the President re­confirmed that they were determined to carry out steps to consolidate, realign and reduce them.[49]

The Chinese nuclear tests on the eve of the con­clusion of the Comprehensive Test Ban Treaty (CTBT) have been criticized by Japan. In its view, this was more than a Chinese act of deter­rence or a political/psychological tool. As Mu­ruyama said in his policy speech to the 134^th Session of the Diet on 29 September 1995,

“In response to the changes in the international situation in the post-Cold War era, we will also continue to vigorously review what defense capa­bilities are appropriate for the Self-Defense Forces from an overall perspective.”[50]

Second, as Elhanan Harel, former chairman of the Israel-Japan Chamber of Commerce, remarked:

“The timing of the Middle East Peace Process proved perfect for Japan. The peace process coin­cided with Japan’s desire to evolve from a ‘mere’ global economic power to a political one: the peace process provided a key to koku-sai, the in­ternationalization of Japan.”[51]

However, the real question is why does Japan suddenly feel that it might become a political and not just economic superpower? Part of the answer lies in the structural changes that the in­ternational system has been facing since the end of the Cold War. The absence of superpower ri­valry implied a political vacuum in different re­gional spheres, including Asia. Thus the ques­tion of who would fill this leadership vacuum in Asia is still open. This is likely to intensify the politi­cal competition between Japan and China in Asia and other parts of the world. The Sino-Japanese rivalry for leadership goes beyond Asia. The long delayed reorganization of the UN and the com­po­sition and size of the Security Council mem­bership lead to the question con­cerning the Asian leadership role. To secure international recogni­tion, political involvement in regional develop­ments including the Middle East Peace Process becomes crucial for Japan. China in contrast was not part of the preparatory activities of the peace process. In the words of one Israeli diplomat, Beijing

“had not sought a major role of sponsorship of the Middle East talks. It had, in fact, given public blessing to the efforts of the sponsors to bring the parties to the dispute to the conference table.”[52]

In addition, the competition for Asia’s other fast growing economies and the globalization of trade makes it harder for Japan to maintain its edge. Over the last decade China has become an export powerhouse. See Table 2, as follows:

TABLE 2: Value of Chinese and Japanese Exports to the OPEC countries

(in US$ billion)

Source: Handbook of International Trade and Develop­ment Statistics, 1994. New York: United Nations, 1995, pp. 58-9.

Though facing a number of problems such as in­flation, widening regional gaps and difficulties in State enterprises, China enjoyed a remarkable growth rate of over ten percent in 1995. This means that China’s energy consumption will rise correspondingly. This could lead to a more bitter and complicated competition between China and Japan to secure energy supplies. In this regard it is interesting that Sino-Japanese energy competi­tion could compel both countries ‘to court the Middle East’ for political, economic and strategic (at least China) considerations. As Kiyoshi Taka­hashi, advisor of Showa Shell Sekiyu K.K. Tokyo said:

“Currently the Asia-Pacific region occupies about 60 percent of the world population, 25 percent of world GNP and 30 percent of world oil demand. Now this region emerges as an engine of world economic growth and oil, one of the main fuels of the engine, presented a rapid growth for its de­mand... For the past three years from 1990 to 1993, the regional oil demand increased by three million barrels per day (b/d). Looking at the out­look until 2000 and 2010, oil demand in this region is expected to grow at a good rate.”[53]

Crude oil regional production in Asia for 1994 was about seven million barrels per day (b/d), while 9.3 million b/d of crude and oil products were imported from other regions. Future crude production, for the ten future years, is expected to remain at 7.1-7.2 million b/d.[54] The regional demand for oil con­sumption would increase sig­nificantly without any corresponding improve­ment in the regional production. As a result, the Asian dependency on Middle East oil would grow significantly.

“According to a forecast by the East West Center, the import rate of crude oil and products from the Middle East to the Asia-Pacific was nine million b/d (for 1994), and is estimated to increase to 13.3 million b/d in 2000 and to 20.1 million b/d in 2010.”[55]

At present, the Asia-Pacific meets its demands for crude oil and petroleum products primarily through imports from outside the region.

“In the medium term future covering three to five years ahead, there will be no substantial change in the product supply demand balance. However, in the long term, China and India will emerge as gi­gantic markets for petroleum and thus the intra-sub-regional trade flow will change accordingly.”[56]

As a result, the coming decade - if buoyant eco­nomic growth continues in Asia, as seems likely - holds the potential for tensions between Asian powers as regional oil markets tighten while con­tenders for supplies grow more diverse and com­petitive. China, Japan, the Koreans, and most ASEAN members will be vigorously bid­ding for imports in energy markets that until recently were much simpler and more relaxed.[57]

Conclusions

There is no doubt that during the last years there have been some in­cre­mental changes in Japanese foreign policy pertaining to the Middle East, which have allowed for Japan’s par­ticipation in the Peace Process. The question, of course, arises as to whether or not we have the meth­odologi­cal tools to understand the quality of this change. Al­though changes of attitude and per­formance can be detected, it seems that the present Japa­n’s for­eign policy in regard to the re­gion is still deeply bound to its former foreign policy princi­ples.

Japan’s foreign policy toward the region as a co­herent part of its general foreign policy is still viewed through an American prism, which is in­creasingly criticized. Inside Japan, there is disap­pointment because of the lack of recogni­tion of Japanese political participation abroad, while ex­ternally, there is growing pressure on Ja­pan to ful­fill its international (economic) commitments.

Japanese in­volvement in the region still oc­curs only when there seems to be no potential danger as a result of Japan’s po­litical activi­ties, and is still based mostly on its economic contribution. However, the continuation of a relative eco­nomic recession in Japan, together with the per­ceived political and eco­nomic instability of the Middle East, could prevent any significant change in Japanese direct investment in the region.