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Business trip: Japan PM heads to Central Asia

Japanese PM Junichiro Koizumi begins a trip to Central Asia, in a bid to secure rich energy resources.

india Updated: Aug 27, 2006 09:05 IST

Japanese Prime Minister Junichiro Koizumi begins a trip to Kazakhstan and Uzebekistan from Monday, in a bid to secure rich energy resources in the region, where China and Russia are increasing their influence.

Japanese officials said the three-day tour, the first to Central Asia by a Japanese prime minister, reflects the strategic importance of the region for resource-poor Japan, that depends on the Middle East for almost all of its oil imports.

"They're not OPEC, not Middle East, but are producers of oil and gas -- that means a lot to Japan," a senior foreign ministry official said.

Along with crude oil and natural gas, Kazakhstan has the world's second-largest reserves of uranium. That's also vital to Japan, which needs the nuclear fuel because atomic energy produces about 30 percent of the electricity used in the country.

Koizumi is expected to bring up Japanese participation in uranium mine projects in his talks with Kazakhstan President Nursultan Nazarbayev, the Japanese official said.

While some Japanese firms already have uranium deals in Kazakhstan, they hope that Koizumi's visit would lead to more.

"For those of us involved in the energy resources business, this is welcome news," said Eiichiro Otsuka, deputy general manager at Sumitomo Corp's nuclear energy department.

Sumitomo Corp., Japan's third-largest trading firm, and Kansai Electric Power Co. agreed in January with Kazakhstan's state-run KazAtomProm to jointly develop a uranium deposit in the country. Another trading firm, Itochu Corp., also has a deal with KazAtomProm to buy uranium.

CONSOLATION PRIZE

But some in the Japanese business community in Kazakhstan say the uranium deals are a consolation prize for being left out in the competition with China for Kazakh oil.

Late last year, Kazakhstan began sending oil to China along a new pipeline and Chinese firms have been busy securing rights for oil reserves in the Central Asian country.

Kazakhstan's oil output is expected to nearly triple to 3.5 million barrels per day by 2015, putting it in the same ranks as Mexico and Iran as a major oil producer.

Koizumi's trip is also part of Tokyo's diplomatic drive to show its commitment to the region, Japanese officials said, as China and Russia strengthen their ties through a forum that brings them together with Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan.

In June, Japan invited foreign ministers from the Central Asian countries to Tokyo for a one-day meeting just as the forum, the Shanghai Cooperation Organisation (SCO), was preparing to hold a leaders summit in Shanghai.

Japanese officials say that Tokyo does not see the SCO as a threat to its interests in Central Asia, but the United States, Japan's closest security ally, has expressed displeasure at the forum for lobbying to push U.S. forces out of the region.

U.S. relations with Uzbekistan, formerly a close ally in the "war on terror", soured after Washington condemned excessive use of force when troops fired on crowds in Andizhan last year during an uprising. Uzbekistan subsequently expelled U.S. troops from a military airbase there.

Japanese officials said Koizumi will raise human rights issues when he meets Uzbek President Islam Karimov, who argues that he is fighting extremists who want to overthrow him.

Analysts said given the region's historical ties with Russia and also its proximity to China, Japan should seek to cooperate, rather than compete, with the rivals over Central Asia.

"From Central Asia's standpoint, Japan is no match to Russia," said Natsuko Oka, an expert on the region at the Institute of Developing Economies.

She added that since the Central Asian countries were landlocked, Japan would need the cooperation of China or Russia to import oil from the region via pipelines.