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Japan's Influence in the Middle East

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Despite the absence of cultural, historical or religious bonds, Japan and the Middle East have become indispensable geostrategic partners. Japan is resource-poor and a leading importer of natural gas and oil. Japanese-Middle Eastern relations have historically revolved around that dynamic. Tokyo's Middle Eastern foreign policy, which has been traditionally passive, has recently shifted toward a more activist role with the objective of protecting Japan's energy interests in the region. Given that Japan imports more than 80 percent of its crude oil from the Gulf Cooperation Council and Iran, stability in the Middle East is of great interest and concern to Japan.

The Fukushima nuclear disaster prompted the shutdown of all of Japan's nuclear reactors, and no timetable has been announced for restarting any of them. As a result, the average Japanese household's electricity bill has risen by 30 percent, and the nation's trade deficit has reached record high levels. Japan has therefore become increasingly reliant on the Persian Gulf's liquefied natural gas (LNG). Given that Qatar is the world's leading supplier of LNG, and Japan is Qatar's top export partner (and the world's leading LNG importer), Tokyo and Doha have become increasingly valuable toward one another. Much meaning was therefore attributed to Prime Minister Abe's six-day trip to the Middle East in August this year - his second to the region since being reelected in 2012.

During that trip, Abe and the Qatari Prime Minister issued a statement reiterating the importance of the bilateral relationship, and the stability it brings to the global LNG marketplace. The promotion of Japanese business interests was also an objective of the trip. As Qatar is expected to begin the construction of infrastructure projects in preparation for the 2022 World Cup, the two leaders agreed to cooperate on building stadiums, railways and sewage systems, where Japanese firms clearly have an advantage. Abe's two-day stop in Bahrain also led to four memoranda of understanding in the areas of healthcare, medical research, anti-crime measures and agriculture.

While the Japanese military is prohibited by its post-war constitution from engaging in offensive activities, the Japan Self Defense Forces (JSDF) have been deployed to the Middle East on numerous occasions in other capacities, such as humanitarian and peacekeeping missions. For example, the JSDF were deployed to the Persian Gulf in 1991 to conduct minesweeping operations in the aftermath of the Gulf War (which marked the first time that Tokyo deployed its armed forces overseas since World War II). Between 1996 and 2012 Japan also sent peacekeeping troops to the Golan Heights and the JSDF were deployed to Iraq to aid in reconstruction efforts.

In addition to carrying out humanitarian or peacekeeping missions, Tokyo has proven increasingly interested in utilizing its military to secure Japan's vital energy interests. In 2011 Japan committed to establishing a military base in Djibouti (which Abe also visited in August), to assist U.S.-led anti-piracy operations in the Gulf of Aden. In 2012 Prime Minister Noda spoke before the Diet about Japan's need to deploy the JSDF to the Strait of Hormuz to conduct minesweeping and escort operations in the event of the Strait's closure. This shift is indicative of Tokyo's increasing use of 'hard power' to ensure greater Middle Eastern stability. If war were to break out in the Persian Gulf, the Japanese Government would be compelled to take aggressive measures to defend its energy lifeline. The Abe government has similarly been hawkish on the expansion of the Japanese military, and seeks the gradual remilitarization of Japan.

However, Japan has not only relied on its 'hard power' to improve the prospects for stability in the Middle East. In 2006, Japan initiated the Corridor of Peace and Prosperity, aimed at bringing about reconciliation between the Israelis and Palestinians. The initiative entails Japanese teachers working in Palestinian refugee camps in Jordan and Japanese financial support for the Jericho Agro-Industrial Park, which is set to begin in 2014. This month Japan announced a $60 million humanitarian aid package, much of which is directed toward Jordan and intended to ease the ongoing financial burden of addressing the needs of Syrian refugees. Agreements between Japan and Saudi Arabia concerning cultural exchanges and technical assistance have also factored into Japan's 'soft power' campaigns in the region.

Japan understands that the region's instability will prove to be a continual challenge. While Tokyo firmly supports the establishment of a sovereign and democratic Palestinian state, based on the pre-1967 borders, the absence of a seat on the UN Security Council limits Tokyo's ability to influence such decision making. Given the tense situation in the Persian Gulf, the Japanese understand that their economic dependency on oil and gas that transits the Strait of Hormuz constitutes a perennial weakness. Rising Chinese investment throughout the Middle East is another area of concern for Tokyo, given how influential the Chinese have become in the region.

Japan has therefore sought alternative sources of LNG and made major investments in renewable sources of energy, with the aim of decreasing reliance on the Middle East for its energy needs. In its pursuit of greater energy independence from the GCC, Japan should have little difficulty increasing LNG imports from its main non-Middle Eastern suppliers -- Australia, Brunei, Indonesia, Malaysia and Russia. Japan may also be able to increase imports from Algeria, Egypt, Equatorial Guinea, Nigeria, Norway, Papua New Guinea, Peru and the U.S.

Although it is an important U.S. ally, Japan holds some unique cards in the Middle East, maintaining cooperative ties with both Israel and Iran, for example, while remaining neutral vis-à-vis the conflict in Syria. As the top export partner for Qatar and the United Arab Emirates, number two for Oman, number three for Saudi Arabia, and number five for Iran, Japan wields considerable economic influence throughout the region. The pressure that the Obama Administration placed on Japan to cooperate with Western-imposed economic sanctions on Iran underscored how Japanese consumption of Iranian gas and oil was an influential variable in the standoff between Washington and Tehran.

In short, although it is not widely recognized as such, Japan is one of the most influential economic actors in the Persian Gulf -- something that is unlikely to change in the near or medium term. Japan has no historical 'baggage' in the Middle East and the Japanese are respected on the 'Arab Street'. Given its unique position, it would be a mistake to dismiss Japan as solely an economic actor in the region. Japan is determined to be a force for peace and stability in the war-torn Middle East, even if doing so is in its own interest. Japan should ultimately prove influential in helping to determine the outcome of some of the region's most intractable conflicts.

*Daniel Wagner is CEO of Country Risk Solutions, a cross-border risk advisory firm, and author of the book "Managing Country Risk". Giorgio Cafiero is a research analyst with CRS, based in Washington.