Shingetsu Newsletter #3

JAPAN KEEN TO EXPORT BEEF TO THE GULF

In Shingetsu Newsletter No. 1215, we reported that Saga Prefecture was denied halal meat certification from the UAE due to insufficient space between the areas for slaughtering pigs and cows. Pigs are considered haram, forbidden to Muslims. (These designations can be considered parallel to the concept of kosher meat in Judaism.)

On February 27th, the first commercial exports of Japanese beef were delivered to Dubai. Japanese farmers have been suffering from a slump in prices and low demand in the Japanese market, which makes the Arab consumer market seem like a beacon of hope for them. JES Corporation, a Tokyo-based trading house that is keen to increase trade, sent the first beef to Dubai. The main barrier has been ensuring that the cows are slaughtered in accordance to Islamic law. Aquil Siddiqui, chairman of Japan Islamic Trust, welcomed the idea of importing meat from Japan: “As long as it’s halal, I’m keen to eat Japanese beef.” He then added, “I’m sure that Japanese beef will be well received by Muslims.”

Japan is really keen to ensure that all proper procedures are in place to ensure success of this new venture. In fact, Saga prefectural officials were so overzealous that they did not go through the inspection procedures outlined by the Ministry of Agriculture, Forestry, and Fisheries when they carried fifteen kilograms of beef for an export promotion event in Dubai. The Saga officials apparently thought that no inspection was required, as the beef in question was not for export per se. However, Agriculture Minister Shigeru Ishiba ordered Saga Prefecture to file a report and urged them to take stern action against any beef exported without the proper inspections. It was noted that failure to comply with the inspection laws can result in up to three years in prison or a fine up to US$10,000. Saga Governor Yasushi Furukawa personally flew to Tokyo to apologize for the incident.

MIXED RESULTS FOR ENERGY INDUSTRY TIES

French Energy Giant GDF Suez is the sole developer of the Shuweihat II Project, which is comprised of a natural gas-fired power station and a water desalination plant. The Abu Dhabi Water and Electricity Authority owns 60% of the project and GDF Suez owns the remaining 40%. The Japan Bank for International Cooperation (JBIC) will participate by giving US$2 billion in financing for the project. As part of the package, the JBIC is requiring a Japanese partner to be involved in the project. As a result, the Marubeni Corporation is in talks to take at least 20% of GDF Suez’s stake.

In a related story, the Abu Dhabi National Energy Company announced that it is finalizing talks to take over half of Marubeni’s energy portfolio in the Caribbean region. The Marubeni Caribbean portfolio consists of equity stakes in power generation and transmission facilities in Jamaica, the Bahamas, Trinidad and Tobago, and Curacao. These deals are another indicator of the deepening of Japanese-UAE energy relations, as noted in Shingetsu Newsletter Nos. 1259 and No. 1271.

However, Cosmo Oil (the fourth biggest refiner in Japan), which owns Abu Dhabi Oil, has suffered its worst loss ever in the year ending March 2009. The company suffered from a net loss of US$920 million, the largest in its 22-year history. Oil prices have been declining, eroding the value of crude oil inventories and profits from exploration. Nippon Oil Corporation, the country’s largest refiner, and Nippon Mining Holdings are also expecting losses. The Abu Dhabi government’s investment arm, International Petroleum Investment Company (IPIC), acquired 20% of Cosmo Oil in September 2007, as reported in Shingetsu Newsletter No. 744.

NEWS BRIEFS

UAE Foreign Minister Shaikh Abdallah bin Zayd al-Nahyan met Prime Minister Taro Aso on April 17th. He also met with Foreign Minister Hirofumi Nakasone. The two parties discussed mutual relations and ways to enhance cooperation in various fields. Shaikh Abdallah also reviewed the outcome of the Pakistan Donors’ Conference and thanked Japan for hosting it.

Yasuo Fukuda, former prime minister and Chairman of the Japanese-UAE Parliamentary Friendship Association, met in Tokyo with Chairman of the Executive Affairs Authority Khaldun Khalifa Mubarak on March 6th. Mubarak thanked Fukuda for his role in sealing the air transport agreement, which allows the UAE national carriers to commence their flights to Tokyo’s Narita Airport. During his visit to Japan, Mubarak also met METI Minister Toshihiro Nikai and other officials.

Tatsuo Watanabe was named as the new Japanese ambassador to the UAE on February 13th. Watanabe joined the Finance Ministry in 1972 and became director of the Development Finance Division. He later became vice chairman of the Japan Securities Dealers Association, and in July 2008 was named as special adviser to the association. Appointing a financial expert as ambassador indicates Tokyo’s interest in stronger economic and financial relations with the UAE.

Dubai Chamber of Commerce delegates attended the Investment Promotion Forum organized by the Japan Cooperation Center for Middle East (JCCME) in Tokyo and Osaka on March 23rd. In total, eighteen West Asian and North African countries attended the forum. Hassan al-Hashimi, Director of External Relations at the Dubai Chamber of Commerce met with counterparts from Tokyo and Osaka to discuss bilateral cooperation and information exchanges.

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