Japan's foray into Central Asia
Japan invited foreign ministers of Central Asian nations to talks in early June. And in a more significant move that highlights how passionately Japan is wooing the Central Asian nations, Prime Minister Junichiro Koizumi, who steps down in late September, will visit the region at the end of this month, becoming the first Japanese premier to do so.
Koizumi will visit Kazakhstan and Uzbekistan to discuss with their leaders — Kazakh President Nursultan Nazarbayev and Uzbek President Islam Karimov — economic cooperation, anti-terrorism measures and cultural and personnel exchanges.
Japan's energized diplomatic drive in Central Asia comes at a time when Tokyo is implementing its new energy strategy aimed at ensuring stable oil, gas and other resource supplies in the long term to feed the world's second-largest economy.
The Ministry of Economy, Trade and Industry released its new national energy strategy at the end of May. It calls for, among other things, strengthening ties with resource-rich countries through such measures as free-trade agreements (FTAs), promoting nuclear energy, and securing energy resources abroad through the fostering of more powerful energy companies.
The new strategy specifically calls for increasing the ratio of "Hinomaru oil," or oil developed and imported through domestic producers, from the current 15% to 40% by 2030.
Japan has also decided recently to utilize aid to strengthen ties with resource-rich countries.
Japan imports almost all of its crude oil, nearly 90% of which comes from the Middle East. To ensure its energy security, Tokyo is desperate to diversify its hydrocarbon sources in order to reduce its heavy reliance on the Middle East for crude-oil imports. As such, an obvious choice for the country is to turn to the Central Asian and Caucasian nations, which became independent with the 1991 demise of the Soviet Union.
Oil and gas are not the only resources that whet Japan's appetite. Japan is also stepping up its drive to secure uranium abroad as global demand for nuclear power rises amid spikes in oil and gas prices and growing environmental concerns. Kazakhstan has the world's second-largest uranium resources.
In early June, Foreign Minister Taro Aso invited his counterparts from Central Asian countries for the second ministerial-level round of the "Central Asia Plus Japan" dialogue. They agreed to strengthen cooperation in fighting terrorism and ensuring the safety of regional oil supplies.
Aso and his opposite numbers from Uzbekistan, Kyrgyzstan, Tajikistan and Kazakhstan, as well as Afghanistan as an observer, approved an action plan that also calls for joint efforts to combat drug-trafficking, fight poverty, promote human rights and boost trade in the region.
Tokyo aims to build roads and pipelines from Central Asia to the Indian Ocean via Afghanistan to carry oil and natural gas for imports into Japan. That's why Tokyo invited Afghanistan to the talks. The action plan adopted there calls for enhanced cooperation, including Japan's support for road construction to ensure a smooth route from Central Asia to the Indian Ocean.
The Central Asia Plus Japan dialogue, which also involves Turkmenistan, was launched at Tokyo's initiative in August 2004.
Among projects in the region, Japan's Itochu Oil Exploration and Inpex Corp have a 3.92% and 10% interest, respectively, in a production-sharing agreement for three fields in the southern Caspian Sea. The Azeri-Chirag-Guneshli fields are about 120 kilometers southeast of Baku, Azerbaijan.
The Japanese government-backed Inpex also has an 8.33% interest in the Kashagan oilfield in Kazakhstan. Itochu Oil Exploration and Inpex also participated in the consortium that built the Baku-Tbilisi-Ceyhan pipeline, with interests of 3.4% and 2.5%, respectively.
The Japanese government-affiliated Japan Bank for International Cooperation (JBIC) also signed a loan agreement of up to $580 million for the link in early 2004. The BTC connects Azerbaijan's vast Caspian Sea oilfields to the Turkish Mediterranean port of Ceyhan via Tbilisi, Georgia. It has further been suggested that oil from Kazakhstan could also be transported through the pipe.
The U.S. strongly supported the project, seeing it as a way to loosen Russia's energy grip on the South Caucasus.
Japan's new diplomatic focus on Central Asia comes at a time when the United States, Russia and China are all flexing their political muscles in the resource-rich but volatile region, competing in an attempt to secure energy. Japan apparently has a desire to play a greater geopolitical role, not only in Central Asia but also in Eurasia as a whole, while countering the growing influence of Russia and China in the region. In a development that raised eyebrows in the U.S., Japan's most important ally, China, Russia and four Central Asian countries issued a joint statement at a summit of the Shanghai Cooperation Organization (SCO) a year ago calling for an early withdrawal of U.S. forces from Central Asia. There is now only one U.S. base in Central Asia — in Kyrgyzstan. The SCO has received wide attention as an emergent "anti-U.S. league."
Meanwhile, Japan's ties with both Russia and China are far from easy over a variety of issues, including nasty territorial rows. Japan has frequently locked horns with China over natural-gas reserves in the East China Sea.
China became a net importer of crude oil in 1993, and in 2003 overtook Japan as the world's second-largest oil consumer — with the U.S. secure in the top spot. China now depends on imports for more than 40% of its oil.
China is aggressively making inroads into Central Asia. China National Petroleum took over for $4.2 billion last year the Canada-based oil firm PetroKazakhstan, which operates solely in Kazakhstan.
China and Kazakhstan also inaugurated a 1,000-kilometer oil pipeline last December to send oil to western China, the first major export pipeline from the landlocked Central Asian republic that does not cross Russia. Eventually another pipeline will link up with this one from the Caspian region in western Kazakhstan, where the huge new Kashagan oilfield is being developed.
China does not seem to be fussy about where its oil comes from. In Africa, for example, Beijing is prepared to ignore political, environmental and humanitarian considerations in its search for energy resources, critics say.
Unlike China, Japan, the self-proclaimed champion of democracy in Asia, cannot turn a blind eye to poor records on democracy and human rights in many countries in Africa and elsewhere. Japan has applied strict criteria for aid provision to developing countries in Asia, Africa and elsewhere in the world, with democracy and human-rights protection as basic conditions.