UAE and Japan Relations

An Analysis of Relations between United Arab Emirates and Japan In an era when American influence in the world is waning, the bipolarity of the Cold War years is being replaced by regional partnerships that are mutually beneficial for all stakeholders.

Indeed, one important international partnership that has emerged over the past half century has been between the United Arab Emirates (UAE) and Japan, with both countries expanding their diplomatic presence in each other’s capitals and investing heavily in exports, most especially oil and gas to Japan with the UAE importing electronics, vehicles and various types of machinery from Japan. Moreover, international analysts predict that this strategic partnership will continue to expand for the foreseeable future.

The purpose of this research proposal was to provide an overview of the history of the relations between Japan and the UAE. A discussion concerning the origins of this modern relationship is followed by a description of the historic evolution of the relationship between these two countries. In addition, a discussion of the implications of these trends for the UAE and Japan is followed by an analysis of the weak points in their relations and how to strengthen these in the future.

Finally, a summary of the research and key findings concerning the relations between the UAE and Japan are presented in the proposal’s conclusion. Overview of the history of relations between the UAE and Japan Both the UAE and Japan have open economies, high per capita income levels as well as impressive annual trade surpluses. In addition, the UAE has succeeded in diversifying its economy so that the portion of GDP derived from its oil and gas exports has been reduced by 30% in recent years (UAE economy, 2019).

Furthermore, the UAE has taken steps to promote itself as a global trade hub, an initiative that has fueled increasing interest on the part of Japan which remains highly reliant on oil and gas exports from the UAE. In this regard, U.S. analysts report that, “Scarce in critical natural resources, Japan has long been dependent on imported energy and raw materials.

After the complete shutdown of Japan’s nuclear reactors following the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than before on imported fossil fuels” (Japan economy, 2019, para. 4). Indeed, Japan is one of the UAE’s most important export partners, and accounts for nearly 10% of its annual export trade (UAE economy, 2019). Likewise, Japan has become one of the largest economies in the world and its revenue levels are expected to remain stable for the foreseeable future.

The prime minister of Japan, Shinzo Abe, has committed the Japanese government to improving the efficiency of the country’s oil and gas industries, and these initiatives are expected to further enhance ongoing economic development efforts. Against this backdrop, both the UAE and Japan have recognized the importance of establishing and strengthening bilateral relations, and these efforts expanded significantly over the past half century. Some salient demographic and economic statistics for the UAE and Japan are set forth in Table 1 below to provide an overview of their current status.

Table 1 Salient demographic and economic statistics for the UAE and Japan Statistic UAE Japan Population 9,701,315 126,168,156 Religions Muslim (official) 76%, Christian 9%, other (primarily Hindu and Buddhist, less than 5% of the population consists of Parsi, Baha'i, Druze, Sikh, Ahmadi, Ismaili, Dawoodi Bohra Muslim, and Jewish) 15% Shintoism 70.4%, Buddhism 69.8%, Christianity 1.5%, other 6.9%.

Note: total adherents exceeds 100% because many people practice both Shintoism and Buddhism Per capita GDP $68,600 $62,900 Life expectancy 79.7 years 85.5 years Unemployment rate 12.1% 5.1% Language(s) Arabic (official), Persian, English, Hindi, Urdu Japanese Source: CIA world factbook (2019) at https://www.cia.gov/library/publications/the-world-factbook/geos/ As can be readily seen from the breakdown in Table 1 above, while Japan has a far larger population compared to the UAE, both countries have comparable per capital GDP rates and both enjoy enviable longevity rates.

In reality, though, this is where the similarities between the UAE and Japan largely end, making the historic evolution of the relations between these two countries especially interesting and these issues are discussed further below. Historic evolution of the relations between the UAE and Japan In reality, Japan’s relationship with the UAE predates the country’s actual founding in 1971.

In sharp contrast to Japan’s millennia of existence, the UAE is a virtual newcomer on the global scene, but one which the Japanese leadership singled out from the outset as being a valuable trading partner, most especially to secure future supplies of oil and gas. Indeed, Japan was among the first movers to establish relations with the UAE (Garcia, 2015). In this regard, the Japanese ambassador to Japan emphasized in 2016 that: Japan and the UAE have always enjoyed an amicable relationship even before the formation of the UAE.

The relationship started in the oil and gas sector more than 40 years ago. Since then, it has significantly expanded, diversified and multi-layered into many other sectors such as renewable energy, environment, education, science and technology, security, finance, tourism, and others. (Fujiki, 2016, para. 4). In fact, fully 4 years prior to the formation of the UAE in 1971, Japan had already established economic relations with the emerging nation and three Japanese oil companies obtained concessions through an international tender by Abu Dhabi in its oilfields in 1967 (Mustafa, 2013).

Given the burgeoning but still relatively weak nature of Japan’s economy at the time, these investments and effort to develop closer political and economic ties with the UAE were especially significant and clearly point to the goals and intents of the futurist views of the Japanese leadership during the 1960s and 1970s. For instance, as early as the 1950s, Japan implemented a generous Official Development Assistance program which continued throughout the 1960s to the 1980s (Garcia, 2018).

The motivation behind these early efforts to establish friendly and productive relations between Japan and the UAE were based in large part on Japan’s oil and gas needs and the UAE’s proven reserves. In fact, trade levels between Japan and countries in the UAE’s region have been estimated to be worth more than $192 billion each year (Garcia, 2015).

The early trends were also a reflection of the growing tendency among Western nations to obtain their oil and gas needs domestically or through international trade with countries outside of the Persian Gulf while Pacific Asian countries have been strengthening their relations with countries such as the UAE to secure their growing energy needs (Garcia, 2015).

For instance, Garcia reports that: Key to this relation is the fact that unlike Western countries, which are actively seeking energy diversification away from the Persian Gulf, the Pacific Asian states are deepening their energy dependency on the region. As a result, Persian Gulf states have come to see the Pacific Asia region as a more lucrative market. (Garcia, 2015, p.

268) By virtually any measure (except cross-cultural exchanges as discussed below), the UAE and Japan have continuously strengthened ties over the past 50-plus years and this interdependence is expected to continue to increase in the future (Garcia, 2015).

The reliance by Japan on the UAE for most of its energy needs is also expected to change in nature if not demand levels as efforts to diversify the oil and gas industry in the UAE provide new opportunities for UAE-baed alternative energy providers to gain market share and provide Japan with more environmentally friendly renewable resources (Garcia, 2015). Furthermore, both the UAE and Japan have increased the number of diplomatic missions in each other’s countries and providing higher-ranking ministry officials who are authorized to engage in formal negotiations.

As Garcia points out, “This is a reflection of the growing importance each side has bestowed on the other” (2015, p. 269). Besides high-ranking ministry officials, Japan has also pulled out the big guns in terms of international diplomacy. For example, in April 2013, Japanese Prime Minister Abe made his first personal diplomatic visit to the UAE (Japan in depth, 2013). This high-profile visit was the tenth such diplomatic mission from Japan to the UAE since 2001 (Mustafa, 2013).

In addition, the UAE foreign minister met with the Japanese prime minister during an official visit in 2013 (Garcia, 2015). Officials from both countries emphasized the importance of continuing to strengths relations and to further diversify the various ways the two countries are already cooperating to their mutual benefit (Mustafa, 2013). While the UAE is not the only country in the region in which Japan has developed an extensive and robust diplomatic presence, the UAE is among the most important for Japan’s energy stability (Mustafa, 2013).

For example, Mustafa advises that, “Fully aware of its status as a country with hardly any energy resources, Japan has engaged in energy diplomacy and investment in oilfields in the Middle East [and] recognized the UAE immediately upon the creation of the federation on December 2, 1971” (2013, para. 4). As noted above, the interest in establishing close political and economic ties between Japan and the UAE even predate the establishment of the nation in 1971, indicating that both countries recognize the mutual strategic value of this close relationship.

In this regard, one Japanese trade official notes that, “The UAE had been a major pillar of Japan's energy policy since 1967 and his country was determined to enhance the long-standing cooperation and economic relations between the two” (as cited in Mustafa, 2013, para. 6). Some other indications of this growing importance can be seen from the fact that approximately 40% of all of the oil produced in the UAE over the past half century has been exported to Japan (Mustafa, 2013).

More importantly, perhaps, Japan’s importation of oil from the UAE has continued regardless of international political circumstances such as the October 1973 war in the Middle East which caused sharp fluctuations in the oil market followed by an oil shock that adversely affected many Western nations (Mustafa, 2013) while managing to greatly benefit oil producing nations such as the UAE (Habibi,2013).

Furthermore, in 1972, Japan was among the first countries to establish formal diplomatic relations with the UAE which was quickly followed by the establishment of a UAE embassy in Tokyo in December 1973 and a Japanese embassy in the UAE in April 1974 (Mustafa, 2013). A concomitant sign of the close relationship between the UAE and Japan is the fact that more than 3,500 Japanese expatriates now live and work in the UAE and UAE exports to Japan exceed $22 billion annually, comprised primarily of crude oil and natural gas.

Reciprocally, UAE imports from Japan an amount equal to nearly $7 billion annually, comprised mainly of electronics, vehicles and various types of machinery (Mustafa, 2013). Beyond the foregoing indications of closer ties between the UAE and Japan, the two countries also increased commercial flights between Tokyo’s Narita airport and Abu Dhabi and Dubai to 14 each week, and an additional Abu Dhabi-Haneda route was also inaugurated in 2012 (Mustafa, 2013).

With respect to international security, Japan and the UAE have also been strategic partners in their efforts to reduce international tensions through nuclear disarmament and encouraging the nonproliferation of additional nuclear weapons (Japan in depth, 2013). For example, the UAE and Japan agreed to continue their efforts towards these global goals during their summit meeting in 2011, and the UAE minister of interior undersecretary and the Japanese deputy director general also entered into agreements concerning security as well as anti-drug interdictions (Mustafa, 2013).

There are also some other considerations involved in the increasingly close ties between the UAE and Japan. For instance, one international analyst concludes that, “Abe hopes to enhance the stable supply of energy from these nations to Japan by bolstering relations with them, and to use that as a bargaining chip in negotiations over the import of shale gas from North America and of oil and natural gas from Russia” (Japan in depth, 2013, p. 3).

Taken together, the historic evolution of the relations between the UAE and Japan only dates back to the late 1960s, but both countries have made continuous and substantive efforts to solidify and further improve their relations during this time. Not surprisingly, these developments will undoubtedly involve some significant implications for these relations in the future, and these issues are discussed further below.

Implications of the relations between the UAE and Japan At present, Japan remains highly dependent for the majority of its crude oil and gas imports on the UAE as well as a few other countries in the region including Kuwait, Saudi Arabia and Qatar, with relatively smaller mounts from the rest of the world including most especially Iran and Russia (Lind, 2014). This heavy reliance on crude oil and gas imports from the UAE has already had some profound implications for these two countries’ future relations.

For example, most recently in April 2018, Japan and its top trade partner in the Middle East, the United Arab Emirates, agreed to continue to expand economic, political and defense partnerships as well as an investment protection agreement that resulted from Prime Minister Abe’s visit to the UAE (Kyodo, 2018). It is particularly noteworthy that Japan and the UAE are not necessarily closely aligned culturally (Elanain, 2013; Ramsbotham, 2013) as shown in Figure 1 below. Figure 1.

Hofstede’s cultural dimension ratings for Japan and the UAE Source: Based on tabular data from Hofstede (2019) at https://www.hofstede-insights.com/country-comparison/japan,the-united-arab-emirates/ The significant differences in three of the four cultural dimensions (i.e., power distance, individualism and masculinity) depicted in Figure 1 above indicate that the relations between these two countries has been based on primarily pragmatic economic considerations rather than an attempt to forge improved relations based on shared cultural or religious values.

As noted above, however, both the UAE and Japan have been transparent about the type of relations that exist between these two trade partners and have expressed the mutual desire to advance their respective economic interests rather than cultivating strong cultural ties. Given the profound differences in religion and culture that characterize the UAE and Japan, this focus on practical goals is readily understandable.

Indeed, during his 2013 diplomatic visit to the UAE, the Japanese prime minister cited the UAE’s investment environment which has transformed the small nations from a desert-filled wasteland just a few decades ago into a prosperous, progressive major global business hub that has succeeded in attracting major international companies. In addition, Garcia notes that, “Economic and trade ties were discussed as well as ways to encourage investment, advance industrial projects and other projects in areas of renewable energy and peaceful nuclear energy” (2015, p. 270).

It is noteworthy that besides the five permanent members of the United Nations Security Council (i.e., the United States, the United Kingdom, China, France, and Russia), the UAE is among the few countries that have sought to establish and sustain very close political and commercial ties with Japan over the past half century (Garcia, 2015). The basis for this mutual effort to establish close ties is virtually universally acknowledged as being based on Japan’s energy needs (Garcia, 2015).

More recently, however, on April 30, 2018, the UAE and Japan formally entered into the Japan-UAE Investment Agreement which seeks to develop:.

further protection and promotion of investment between the [UAE and Japan] and stipulates the treatments accorded to investment activities and investments when an investor (an enterprise etc.) of a Contracting Party invests in the other Contracting Party, such as national treatment at the post-establishment phase of investments, basic most-favored-nation treatment at the pre-establishment and post-establishment phase of investments, fair and equitable treatment, observance of obligation, prohibition of performance requirements, conditions for expropriation and compensation, freedom of transfers, and procedures for dispute settlements. (Japan-United Arab Emirates Investment Agreement, 2018, para.

5) The results of these and the other efforts to strengthen relations between the UAE and Japan have included the blossoming of Japanese businesses in the UAE, increasing from just three in 1967to more than 300 Japanese companies today (Japan-United Arab Emirates Investment Agreement, 2018).The implications of these trends together with the formal Japan-UAE Investment Agreement will include helping ensure the stability of Japanese business and expatriates working in the UAE as well as encouraging yet more significant investments by Japan in the increasingly diversified UAE economy (Japan-United Arab Emirates Investment Agreement, 2018).

Furthermore, Japan has invited university students from the UAE to attend school in Japan as part of its "Plan for 300,000 Exchange Students" implemented in 2008 (Abella, 2015). Likewise, more recently, the UAE also announced plans to further strengthen its cooperation with Japan in other areas of education as a integral part of the two countries' bilateral strategic partnership (Yanagisawa, 2017).

In this regard, UAE’s State Minister for Public Education, Jameela Al Muhairi, emphasized during a meeting with Japanese Education Minister Yoshimasa Hayashi that, “It is very important for us to see where the [two] countries can work with each other" on education. We want to learn from Japan” (as cited in Yanagisawa, 2017, p. 7).

Despite the dearth of other cultural exchange activities between the UAE and Japan over the years, these educational initiatives may well represent a potential turning point in the nature of the strategic relationship between these two nations. For example, Yanagisawa (2017) adds that, “Referring to Japan and the UAE's series of high-level bilateral meetings -- including at the prime ministerial level -- over the last few years, Hayashi agreed that education is a pillar of their ties” (p. 8).

An especially important development in the ongoing efforts to forge even stronger ties between the UAE and Japan and which reflects the success in diversifying the UAE economy was a novel partnership program in space development. According to the Japanese ambassador to the UAE, “A new contract was concluded between Mitsubishi Heavy Industries and the Mohammed bin Rashid Space Centre [in 2016 for the launch of the UAE Mars Mission, which well represents the expansion of trade relations into a new cutting-edge technological phase” (Fujiki, 2016, para. 8).

Other recent initiatives that are expected to further strengthen ties between the UAE and Japan in the near future announced by the Japanese ambassador to the UAE include the following: · In 2014, the Japan-UAE Financial Cooperation Seminar was held in Abu Dhabi to share knowledge among financial authorities; · In 2015, the UAE minister of economy visited Japan to call for further strengthening of economic ties, particularly participation of Japanese companies in the UAE's infrastructure projects; · In May 2016, the Abu Dhabi-Japan Economic Council (ADJEC), a high-level framework to discuss the promotion of bilateral trade and investments, successfully completed its fourth meeting, where initiatives to promote further mutual direct investment were intensively discussed; and, · In 2015, JFE Steel Corporation, Marubeni-Itochu Steel Inc, in cooperation with SENAAT GHC, made a large-scale investment ($300 million in total) to establish a joint venture for the manufacturing and sales of welded steel pipes for oil development and transportation (Fujiki, 2016, para.

10). Notwithstanding these numerous positive trends and initiatives that are intended to forge even stronger relations between Japan and the UAE, there are some notable weak points that may threaten this strategic bilateral relationship in the future as discussed further below.

Weak points in the relations between the UAE and Japan and ways to strength them Although the current state of diplomatic, political and economic relations between Japan and the UAE is strong, there are some potential weak points at present that must be taken into account in order to successfully continue this process into the 21st century.

For instance, the United States is importing far less oil and gas than it did in the past, and innovative exploration practices such as fracking have made America the leading energy producer and leading crude oil producer in the world today and significantly reduced annual imports (Lind, 2014).

These trends mean that the United States deploys naval forces to Middle Eastern and the South China Sea primarily to protect imports of oil and gas from the UAE from Japan and other Southeast Asian nations rather than its own national security interests (Lind, 2014). In addition, this also means that the UAE and Japan will remain heavily dependent on protection by the U.S.

Navy, especially in the hotly contested Straits of Hormuz in the Persian Gulf and Malacca between the Indian and Pacific Oceans and the Gulf of Oman which are important but congested transit routes for international oil and gas shipments. It is also important to note that the UAE and Japan are not global neighbors, but are rather located about 5,000 miles apart, meaning they are located halfway around the world from each other. This.