Richard Javad Heydarian is a Manila-based academic, columnist and author
March 16, 2023
In his groundbreaking work The End of History and the Last Man, the political scientist Francis Fukuyama underscored the importance of differentiating between “what is essential and what is contingent or accidental in world history”. By separating trivial from tectonic changes, Fukuyama argued, one can properly detect as well as correctly analyse transformational shifts in global affairs.
As far as Japan’s foreign policy goes, what we are witnessing is nothing short of an "essential" shift with major implications for the Indo-Pacific region and beyond. In the past few months alone, the North-East Asian powerhouse released three major strategic documents, namely the National Security Strategy, the National Defence Strategy, and a Defence Buildup Plan, which will collectively transform Japan’s post-Second World War foreign policy.
Accordingly, Japan is expected to double its defence spending as a share of its gross domestic product over the next five years, thus allocating $315 billion to enhance its defence capabilities. In particular, Japan, as noted in its National Security Strategy, seeks to develop a “counter-strike capability”, which would allow it to more effectively deter threats from rival nations.
Eager to gain support for Japan’s new defence posture, Prime Minister Fumio Kishida travelled to several G7 partner nations, where he signed defence agreements with the UK and Italy. Though still committed to its alliance with the US, with the two sides upgrading their defence relations in recent years, Japan is intent on enhancing its own strategic autonomy.
Authoritative surveys show that most Japanese people support the country’s new policy direction, even if the country’s pacifist constitution expressly proscribes offensive military capability development. An unshackled Japan, the world’s third-largest economy, will have major implications for international security, probably ushering in a new era of defence co-operation with a whole host of partners from South-East Asia all the way to the Middle East over the coming years.
Cookies on a plate sit on a table as US and Japan defence officials meet at the Pentagon in Arlington, Virginia, last May. EPA
Following its decisive defeat in the Second World War, Japan was forced to relinquish its military capabilities in favour of a de facto protectorate status under the US. Accordingly, it adopted a new constitution, which not only established liberal democratic institutions, but also placed severe restrictions on the development of a standing army.
The country's constitution makes it clear that “the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as [a] means of settling international disputes”. In operational terms, Japan had to give up any military capability that gave it any "war potential" and the ability to exercise belligerence.
The advent of the Cold War, however, radically altered Washington’s strategic calculus towards Japan, which had now emerged as a bulwark against communist expansion in East Asia. On the one hand, the US supported Japan’s economic reconstruction, especially as a major war raged on in the neighbouring Korean Pensinsula. Meanwhile, Japan steadily rebuilt its armed forces, which were rebranded as “Self-Defence Forces” in lieu of the country’s pacifist constitution.
Nevertheless, former prime minister Shigeru Yoshida ensured that the US would largely handle the country’s external defence needs so that Tokyo can focus its energy and finite resources on economic redevelopment at home. Under another prime minster, Nobusuke Kishi, Japan formalised its status as a junior defence partner to the US, which, in turn, singlehandedly sponsored a new liberal security architecture in East Asia through a wide network of alliances.
Within a few decades, Mr Yoshida’s strategic gamble paid off, as Japan reclaimed its pride of place among the world’s leading industrialised nations. Buoyed by a booming economy, Japan founded the Asian Development Bank, the region’s premier intergovernmental financial institution, which backed large-scale Tokyo-led development projects across Asia.
Business people offer prayers for prosperity for their companies and the economy on the first business day of the year at the Kanda Myojin Shrine in Tokyo in January. EPA
Recognising its relatively helpless position in international affairs, Japan has steadily re-defined the contours of its foreign policy
Amid blossoming ties with South-East Asian nations, Tokyo chose Manila as the host to the ADB’s headquarters, thus cementing its position as a major economic partner in the region. Meanwhile, Japan, which became the world’s largest oil importer in the mid-20th century, also became the “pivotal customer” of oil-exporting nations in the Middle East. Throughout the 1970s and 80s, it sourced more than half of its oil imports from this region.
By the 1980s, Japan, now flushed with cash and high-profile acquisitions across the world, seemed well-positioned to overtake America as the world’s leading economy. The limits of its geopolitical influence, however, was exposed during the First Gulf War, as it proved unable to protect its energy supply lines in the Middle East.
Following the liberation of Kuwait, Japan contributed $13 billion in development and aid assistance. But thanks to its pacifist constitution, it was unable to deploy troops or relevant personnel on the ground, thus largely confining itself to the margins of international diplomacy. As a result, its foreign policy, especially in the Middle East, was derisively dismissed by some as “chequebook diplomacy”.
As Japanese expert Akiko Yoshioka explains, even if Tokyo has had the “historical advantage of neutrality” in the Middle East, it has lacked the “political leverage to be an influential mediator between parties in conflict because of stringent constitutional limitations on the military sphere”.
A SpaceX Falcon 9 rocket, with a payload including two lunar rovers from Japan and the UAE, lifts off from Cape Canaveral, Florida, last December. AP Photo
The late Japanese prime minister Shinzo Abe, left, is hosted by President Sheikh Mohamed, then Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, in 2018. Mohamed Al Hammadi / Crown Prince Court
Recognising its relatively helpless position in international affairs, Japan has steadily re-defined the contours of its foreign policy. Two particularly charismatic prime ministers played a crucial role in this regard. First came Junichiro Koizumi’s controversial decision to deploy troops, although primarily engineers, to the Middle East following the US-led invasion of Iraq in 2003.
But it was his successor, Shinzo Abe, who would oversee a significant transformation of Japan’s foreign policy throughout the 2010s, largely in response to the rise of China as well as growing doubts over America’s commitment to regional allies.
During his long stint, the longest among all Japanese premiers, Mr Abe subtly relaxed legal restrictions on the Self Defence Forces’ ability to project power overseas, expanded defence co-operation and high-profile war games with likeminded powers across the Indo-Pacific region, and oversaw a significant increase in defence spending.
His efforts to amend the pacifist constitution, however, were met by vociferous opposition from allies, progressive legislators and civil society groups. Nevertheless, Mr Abe managed to steadily normalise a more proactive foreign and defence policy. Following his assassination last year, the governing coalition, led by Mr Kishida, a former cabinet colleague, managed to garner a super-majority in the parliament.
Japanese Prime Minister Fumio Kishida with French President Emmanuel Macron and other G7 Leaders at the Nato Headquarters in Brussels last March. AFP
In recent months, Tokyo pursued defence agreements with neighbouring states, including a potential Visiting Forces Agreement deal with the Philippines as well as a tripartite US-Philippines-Japan security framework. Japan has also announced a defence aid package that could transform it into a major arms supplier and source of military technology.
Booming defence spending and a more outward-looking military doctrine means that Japan is well-positioned to play a more prominent role in international affairs, including in the Middle East. Crucially, unlike the West, it has largely refrained from criticising systems of governments that are unlike its own elsewhere in the world.
The UAE, Saudi Arabia and Qatar are among Japan’s top sources of hydrocarbon imports. The North-East Asian power, which has robust relations with all the major regional players, has a direct stake in the Middle East’s peace and stability. Booming military spending at home will probably also boost Japan’s defence industry, thus the likelihood of expanded military equipment exports such as advanced radar systems and fighter jets to regional powers.
Similar to South Korea, Japan is in a strong position to provide high-tech defence equipment and vital technologies in the realm of renewable energy production. Since it has no history of imperial aggression in the Middle East, its re-emergence as a global power is likely to be welcomed by regional powers seeking a reliable partner outside of the West, Russia and China.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
ESSENTIALS
The flights
Emirates flies direct from Dubai to Rio de Janeiro from Dh7,000 return including taxes. Avianca fliles from Rio to Cusco via Lima from $399 (Dhxx) return including taxes.
The trip
From US$1,830 per deluxe cabin, twin share, for the one-night Spirit of the Water itinerary and US$4,630 per deluxe cabin for the Peruvian Highlands itinerary, inclusive of meals, and beverages. Surcharges apply for some excursions.
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
UAE rugby in numbers
5 - Year sponsorship deal between Hesco and Jebel Ali Dragons
700 - Dubai Hurricanes had more than 700 playing members last season between their mini and youth, men's and women's teams
Dh600,000 - Dubai Exiles' budget for pitch and court hire next season, for their rugby, netball and cricket teams
Dh1.8m - Dubai Hurricanes' overall budget for next season
Dh2.8m - Dubai Exiles’ overall budget for next season
Heavily-sugared soft drinks slip through the tax net
Some popular drinks with high levels of sugar and caffeine have slipped through the fizz drink tax loophole, as they are not carbonated or classed as an energy drink.
Arizona Iced Tea with lemon is one of those beverages, with one 240 millilitre serving offering up 23 grams of sugar - about six teaspoons.
A 680ml can of Arizona Iced Tea costs just Dh6.
Most sports drinks sold in supermarkets were found to contain, on average, five teaspoons of sugar in a 500ml bottle.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
Strait of Hormuz
Fujairah is a crucial hub for fuel storage and is just outside the Strait of Hormuz, a vital shipping route linking Middle East oil producers to markets in Asia, Europe, North America and beyond.
The strait is 33 km wide at its narrowest point, but the shipping lane is just three km wide in either direction. Almost a fifth of oil consumed across the world passes through the strait.
Iran has repeatedly threatened to close the strait, a move that would risk inviting geopolitical and economic turmoil.
Last month, Iran issued a new warning that it would block the strait, if it was prevented from using the waterway following a US decision to end exemptions from sanctions for major Iranian oil importers.
Sid Jhurani is not the first cricketer from the UAE to go to the UK to try his luck.
Rameez Shahzad Played alongside Ben Stokes and Liam Plunkett in Durham while he was studying there. He also played club cricket as an overseas professional, but his time in the UK stunted his UAE career. The batsman went a decade without playing for the national team.
Yodhin Punja The seam bowler was named in the UAE’s extended World Cup squad in 2015 despite being just 15 at the time. He made his senior UAE debut aged 16, and subsequently took up a scholarship at Claremont High School in the south of England.
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Daniella Weiss and Nachala Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
UAE currency: the story behind the money in your pockets