History of Japan s Relations with the Middle East

Japanese-Arab Relations from Meiji Era to the 1980s

Introduction

The Meiji Era in Japan established a new centralized form of government with the goal being to cement Japan as a nation-state and world power. Meiji was very interested in learning from and collaborating with other nations in order to strengthen Japan. Were it not for the Meiji Era, Japan would not have blossomed into the powerful state it is today. It was not until the 20th century, however, that Japan began importing oil from the Middle East. The energy crisis of the 1970s and the Gulf Crisis of the 1990s presented new challenges for Japanese-Arab relations, and in recent years Japan has become the primary trading partner of the UAE. This paper will discuss how relations began between Japan and the Arab world, what Arabs and Japan trade, and how relations developed between Japan and the UAE.

How Relations Began

It was in 1921 that Japan first began importing oil from the Middle East. The exporting state was Iran (Yoshioka, 2018). Following WW2, Japan sought to have more control over oil in the Middle East through the development of crude oil wells. In 1957, it “gained concession of the Khafji field at the neutral zone between Saudi Arabia and Kuwait” (Yoshioka, 2018). Still, Japan relied heavily on imports through Western oil companies. Because of this reliance on Western oil companies, Japan was not viewed by the Arab states as a necessary component of their growth or well-being. That view had repercussions in the following years, particularly in the wake of the Arab-Israeli conflict during that same time.

1973 marked a pivotal year in Japanese-Arab relations. The fourth Arab-Israeli war had just concluded, and the Arab states were creating a list of Arab-friendly nations with which they would do business. An oil embargo was placed on those states deemed unfriendly by the Organization of Arab Petroleum Exporting Countries (OAPEC), and Japan was unfortunately placed on that list (Yoshioka, 2018). The embargo had a dramatic effect on Japan: “The news caused a so-called ‘toilet-paper panic’ among the Japanese who believed paper production would soon stop, leading to massive purchases. The oil crisis accelerated inflation, which led the government to introduce a legal framework to prevent the hoarding of goods and the arbitrary hiking of prices. This event inspired some serious rethinking with regard to Japan’s energy security and its relations with the Middle East” (Yoshioka, 2018). The Japanese were desperate to enhance relations with the Middle East and so formed the Japanese Institute of Middle Eastern Economies (JIME) in 1974. Japan’s Foreign Ministry realized the state could not grow without oil from the Middle East (Naili, 2004). It wanted to develop closer ties so that a future conflict of this sort could be avoided. Since that time, Japan has sought to be more integrated into the Middle East through collaboration and trade.

Al-Fahadi (2021) explains that after WW2, the interests of Japan and the Middle East were always connected, particularly between Japan and Saudi Arabia: “Saudi-Japanese relations have been developing and progressing in all fields since they were first established in 1955, before reaching the stage of the multi-level strategic partnership known as Saudi-Japan Vision 2030. Saudi Arabia and Japan are both counting on this cooperation to ensure the stability of energy supplies and the safety of maritime navigation.” Technology, oil refining, power plants, desalination plants, industry and investment promotion are all important and critical areas where the interests of Japan and Saudi Arabia intersect (Al-Fahadi, 2021). But Saudi Arabia is not the only important partner of Japan in the Middle East. Qatar, the UAE, Kuwait and others are also important economic partners. And for other smaller states in less well-established financial conditions, Japan has been an important lender. So the relationship between Japan and the Middle has really flourished since the latter half of the 20th century, and it has continued well into the 21st.

Trade between Arabs and Japan

Japan has not been a stranger to the Middle East; it recognized Egypt’s independence in 1922 and opened a consulate general in Alexandria four years later. Over the decades, Egypt like many other Arab states has imported transportation equipment, electronic machinery and cars from Japan and has received millions of dollars in direct investment. Today, there are 50 Japanese companies operating in Egypt (Ministry of Foreign Affairs of Japan, 2020). In return, Egypt has traditionally exported cotton and cotton textiles along with oil and oil products to Japan.

But the top exporters of oil to Japan are the UAE and Saudi Arabia, and it has been this way since 1975 (Yoshioka, 2018). In 2011, Qatar became Japan’s third largest gas supplier. Japan’s energy needs are quite substantial, so it considers having energy partners in the Middle East as well worth the effort. Since the 2000s, Gulf States have also impacted tourism between Japan and the Middle East by providing direct flights to and from Japan. As a result, “Dubai has now become a well-known tourist destination among the Japanese, in addition to the historic cities of Istanbul and Cairo” (Yoshioka, 2018).

The Middle East in turn imports Japan’s automobiles and machinery. The Middle East has a great need for technological products and it looks to Japan as a primary trading partner for this reason. Japan, for its part, is happy to be of service. It has also participated in the reconstruction of Iraq since 2003, by supplying parts and and labor, and participating in projects related to the construction of “power plants, water-supply systems, communication networks, oil refineries, and fertilizer factories” (Yoshioka, 2018).

As Yoshioka (2018) notes, “the current share of the oil supply coming from the Middle East is more than 80%, higher than the 77.5% in 1973 – although it did temporarily decrease in 1987 to 69.7%. In 2015, four Middle Eastern nations – Saudi Arabia, the UAE, Kuwait, and Qatar – provided as much as 75.4% of Japan’s oil.” Thus, energy continues to be the main export of Arab countries to Japan.

From Japan to the Middle East also flow numerous loans (Ministry of Foreign Affairs of Japan, 2020). Japan’s Foreign Ministry points out the importance that aid from Japan has been for the Middle East—it has primarily helped the Middle East to develop at the same time Japan has sought to grow:

In 1972, the Middle East\'s share of Japan\'s bilateral Official Development Assistance (ODA) was 0.8%. However, that figure has grown since the oil crisis of 1973 and reached 24.5% in 1977. After that, the share moved into the 10% range with the structural modifications to Japan\'s energy requirements and the stabilization of its oil supplies. During the Gulf Crisis in 1991, however, yen loans, principally emergency commodity loans, were made to Egypt, Syria and Jordan. Taking this fact into consideration, bilateral ODA to the region rose to 1.8656 billion dollars, 20.4% of the total, the highest ever in absolute terms. Since 1992, the share has returned to normal levels of around 6% to 7% and in 1995, the figure was 721.27 million dollars, a 6.8% share (Ministry of Foreign Affairs of Japan, 2020).

Japan can thus be seen as a central financial partner for the Middle East. In the 1990s especially, Japan was a major contributor of loans to the Middle East: “when the Gulf Crisis erupted, Japan provided about 2 billion dollars in aid to Egypt, Jordan and Turkey, and about 500 million dollars in aid to Syria. Japan played an important role in achieving domestic and regional stability by stabilizing the economy in the region” Ministry of Foreign Affairs of Japan, 2020). Japan has also contributed hundreds of millions of dollars to Palestine in support of its peace plan.

The states that have been excluded from Japanese loans include the UAE, Kuwait, Qatar, Saudi Arabia, Oman and Bahrain—as they are seen as rich oil-producing states that are not in need of financial aid. Their need is more on the side of technology, and the UAE especially has been a big importer of Japanese tech.

How Relations Developed between UAE and Japan

Diplomatic relations with Japan were established at the outset of the UAE’s independence in 1971. The two states had generally been on friendly terms before that, with Japan importing oil and gas from the UAE, and the UAE importing cars and electronics from Japan. Indeed, the first shipment of oil from Abu Dhabi to Japan occurred in 1961, and today the UAE is the largest receiver of Japanese exports, accounting for more than $7 billion of Japanese goods in 2019 (Walia, 2020). Diplomatic relations have been just as strong for decades: Japan opened its embassy in the UAE in 1974, while the UAE opened its embassy in Japan the year prior (Walia, 2020).

The two states made an even bigger leap in their collaborative enterprises in 2020 when “UAE spacecraft rocketed into blue skies from a Japanese launch centre at the start of a seven-month journey to Mars on the Arab’s world’s first interplanetary mission. This mission gave a boost to its strategic relations as well as space cooperation” with Japan (Walia, 2020). It also symbolized the degree to which the UAE and Japan had become technologically integrated. The joint effort signaled to the world that the UAE and Japan were taking bold new steps on the global stage.

As Kyodo (2018) points out, “the UAE is Japan’s main trading partner in the Middle East, accounting for about a third of Tokyo’s trade in the region. It is also Japan’s second-largest supplier of crude oil, accounting for almost a quarter of its needs. More than half the trade volume between them [in 2017]—$28 billion—was energy-related.” Energy represents, sufficient to say, the main commodity that brings the two states’ interests in alignment: UAE has it to sell, and Japan needs it for growth.

Moreover, in 2018, Japan and the UAE agreed to a Comprehensive Strategic Partnership Initiative (CSPI) in order “to expand economic, political and defense cooperation. Tokyo and Abu Dhabi also signed an investment protection agreement” (Kyodo, 2018). Abe’s visit to the UAE reinforced the notion that the two states are economically partnered when it comes to trade, and the joint statement that they released spelled out the nature and extent of this partnership as it “stressed the importance of further enhancing trade, investments, and business such as renewable energy, sustainable water desalination, artificial intelligence, health care and medical equipment” (Kyodo, 2018). Japan and the UAE also expressed a firm “commitment to diversify joint business ventures in the non-energy sector, and stressed the need to boost defense cooperation” (Kyodo, 2018). The CSPI stands as a testament to the good will between the two states and the interconnectedness of their economies. Both are advancing at a rapid pace and both have a great deal to offer the other.

However, the UAE wants to see even closer ties with Japan in the coming years: “The leadership of the UAE has been keen on strengthening ties with Japan in areas like education, scientific research and industry. It aims to seek its ties with Japan to new levels as Japan possesses advanced technology which would serve the sustainable and comprehensive development goals in the UAE” (Walia, 2020). By expanding their cooperation into the realms of education and research, the UAE and Japan are forming a tightly-knit relationship that will help each state to develop tools that will support their mutual growth and individual interests for years to come. It is particularly telling that the UAE is interested in fostering a greater focus on education and science research, as it indicates that the country is not only merely interested in sales and exports but also in strengthening its own internal fundamentals along research-driven lines. In fact, a Japanese school was founded in the UAE in 2009, and in that school the Arabic language, Islamic education and social studies have been taught side by side with a Japanese-style curriculum (Walia, 2020). Few countries around the world can boast of such a significant level of collaboration as this. What’s more is the fact that there are 100 Emirati students studying abroad in Japan and obtaining their undergraduate, graduate, and post-graduate degrees (Walia, 2020).