Japan’s Central Asia Engagement: Better Late Than Never – Analysis

In an apparent move to constructively engage the countries of the Central Asian region, Japanese Prime Minister, Shinzo Abe concluded his state visit to the region on October 28, 2015. For years, the relations were marred by historical baggage of the Cold War years, mutual distance and negligence. Abe’s high-profile visit to five Central Asian Republics should be seen as a landmark attempt to break away from the past and bring more warmth and value into the relationship.

One of the significant developments was that Abe became the first Japanese Prime Minister to visit three of the five Central Asian countries, Kyrgyzstan, Turkmenistan and Tajikistan. The last Japanese Prime Minister to visit the other two countries, Kazakhstan and Uzbekistan was Junichiro Koizumi in 2006. Abe took a strong business delegation with him for his week-long visit (October 22-28, 2015) to Central Asia. This was a clear signal that Japan is keen to do meaningful business with the Central Asian countries.

The main purpose of the visit was to strengthen Japan’s economic ties with the resource-rich region by financing major infrastructural development projects in Central Asia. Japan has put the principle of comparative advantage at play in the Central Asian region. The key focus of the visit has been on the infrastructure development of the region for securing its future energy supplies from Central Asia. In this context, one of the major takeaways from the visit was the signing of several energy deals of worth US$ 18 billion (¥ 2.17 trillion) with Turkmenistan, which has the world’s fourth largest reserves of natural gas. As an outcome of the energy agreements, Japanese firms mainly Japanese Gasoline Co. (JSG) will be involved in the construction of a plant linked to natural gas field. He also extended financial assistance of US$ 105 million (¥ 12.7 billion) to develop infrastructure in Uzbekistan, mainly in two fields: to upgrade power facilities in the country and improve medical-related equipment’s in the hospitals.

In Tajikistan, the Japanese Prime Minister assured the Central Asian country of extending help in improvising the agriculture and infrastructure development. For the same purpose, Japanese side may also provide US$ 7.47 million (¥ 900 million) in grants to Tajikistan. While in Kyrgyzstan, Abe pledged to grant US$ 107.9 million (¥ 13 billion) in aid for repairing roadways and developing infrastructure at Manas International Airport, main international airport in Kyrgyzstan, Japan strives to assist Kazakhstan civil nuclear energy program by promoting the export of Japanese nuclear plant technology and equipment to Kazakhstan, the largest Central Asian economy. The recent deals with the countries of the region suggest that Japan is expanding its role from a donor to the potential economic partner of these countries.

Central Asia as a region is gaining traction in the recent years and has become a new battleground of soft power rivalry between China and Russia and now Japan is also coming to the picture. It may be noted that Abe’s Central Asia visit took place against the backdrop of China’s push for its ‘One Belt, One Road (OBOR)’ project. Central Asia is an important part of China’s OBOR. Central Asia minus Turkmenistan has also given their official consent to Asia Infrastructure Investment Bank (AIIB), another China-led economic institution that has been perceived as an archrival of Japan-led Asian Development Bank (ADB).

Clearly, China has always loomed large in Japan’s relations with Central Asia. China has been a major beneficiary of its geographical proximity and cordial relations with the Central Asian countries. To counter China’s ascendancy in the region will not be a cakewalk for Japan. A region, which was earlier used to be regarded as Russia’s backyard, is rapidly falling under China’s sphere of influence. Presidents of all the Central Asian Republics except Turkmenistan’s President were in attendance at China’s Victory Day Parade held on September 3, 2015. In addition, China’s economic clout in the region seems to be unmatchable as China has acquired the place of one of the largest trading partners of the five Central Asian countries. To give an example, the economy of Turkmenistan, which is a stern follower of non-alignment, relies heavily on its trade in the field of energy. Interestingly, Turkmenistan looks towards Chinese markets for the energy trade. China-Turkmenistan gas pipeline was operationalized in 2009 and now China is the largest importer of natural gas from Turkmenistan.

China has a separate multilateral/regional mechanism with Central Asian countries. All Central Asian Republics and Russia except Turkmenistan are active members of the China-initiated Shanghai Cooperation Organisation (SCO). India and Pakistan are also set to become a full-fledged member of the SCO by 2016. Since Japan has not been active in the region, it has to work tirelessly to make its presence felt at the regional forums too.

However, Japan has become proactive in the regional domain and with countries from Central Asia and Europe accepting China’s OBOR, it is extending its reach to its extended neighborhood as well. In what may be termed as a positive development for Japan, these Central Asian landlocked countries aspire to diversify their financial needs. Japan’s newly found interest in the Central Asian region is a ray of hope for these countries that are still heavily dependent on China in terms of financial support for infrastructure development and trade. If Japan is able to work with the Central Asian countries, it would not only be beneficial for Japan but also uplift the economic performance of the Central Asian countries. The fundamental reason for this potentially win-win relationship is the complementarity between Japan on one hand and the Central Asian Republics on the other.

Whether Japan’s efforts in the region are business in usual or set new standard remain to be seen. Nevertheless, its thrust in the region will partly be able mark a departure from the past practices.

*Sana Hashmi
Associate Fellow, Centre for Air Power Studies (New Delhi)