I joined the Shingetsu Institute recently and I will be contributing analysis of news and articles related to the UAE and other Muslim world countries.
My first newsletter was published on Jan 23rd, here it is:
JAPAN-UAE NUCLEAR ENERGY COOPERATION LAUNCHES A NEW ERA
The UAE is on its way to becoming the first Arab country to develop nuclear power and Japan will play a major role in getting the UAE there. We at the Shingetsu Institute have been tracking the development of the potential nuclear cooperation between Japan and the GCC countries since May 2007 when Japan’s prime minister at the time Shinzo Abe visited Qatar and politely dismissed Qatar’s request for Japanese help in obtaining nuclear technology.
The latest move in the UAE has very serious implications in the region, and a decision like this does not come as a complete surprise since Japan is only following the lead of the US, France, and the UK. Condoleezza Rice, the former US secretary of state, and Shaikh Abdullah Bin Zayed al-Nahyan, the UAE foreign minister, met on January 15th and signed a bilateral agreement for peaceful nuclear cooperation. Shaikh Abdullah said in a statement: “Under the terms of this agreement, the UAE will gain access to significant capabilities and experience in the peaceful use of nuclear energy. This will allow the UAE to develop its civilian nuclear program to the highest standards of safety, security, and non-proliferation.”
Shortly after that, on January 19th, METI Senior Vice-Minister Takamori Yoshikawa forged an agreement with UAE’s Ministry of Foreign Affairs Undersecretary Saif Sultan al-Aryani to help the UAE in developing their nuclear ambitions. As previously mentioned, the UAE has also signed similar agreements with the UK and France.
Japan will help the UAE develop a civilian nuclear program that may result in the UAE introducing its first nuclear reactor in 2017. Most of the help will be focused on training and education in regard to running and constructing a civilian nuclear plant. The UAE and Japan must still sign a nuclear treaty that allows Japanese manufacturers to sell their reactors to the UAE. This step is required by international law to ensure that nuclear technology will only be used for civilian energy and not for any military purposes.
As most recently reported in Newsletter No. 1215, Japan is arriving late to the game and took the role of a follower rather than a leader in this initiative. It’s yet to be seen if Japan signs similar agreements with other GCC countries interested in nuclear energy, such as Bahrain and Qatar. I would not be surprised if Japan waits until the US and/or the EU blesses the transaction before taking any steps there as well. Iran is obviously out of question for the time being.
We expect this announcement will strengthen the relationship between Japan and the UAE, and some advantages are already beginning to appear. However, we will discuss those matters in a Newsletter next week.
My Second newsletter was published today, here it is:
THE DEEPENING OF JAPAN-UAE ENERGY COOPERATION
This Newsletter is a continuation of what we reported in Newsletter No. 1259 last week. As we noted at that time, Japan will help the UAE develop a civilian nuclear program that may result in the UAE introducing its first nuclear reactor in 2017. This will definitely strengthen the relationship between Japan and the UAE. In this newsletter we will focus on two announcements that seem to be a result of new relationship between the two countries.
Foreign companies have been trying to maintain their oil exploration rights in the UAE. Companies like BP and Royal Dutch Shell are still wondering if their concession rights will be withdrawn when their contracts expire within the next ten years. The UAE has given only a few concession extensions to some American companies.
However, we now learn that the Japanese-owned company Abu Dhabi Oil has secured a twenty-year extension of its concession rights in the UAE. It has been operating under a 45-year concession that expires in 2012. The Japanese corporation Cosmo Oil (the fourth biggest refiner in Japan) owns Abu Dhabi Oil. The Abu Dhabi government’s investment arm International Petroleum Investment Company (IPIC) acquired 20% of Cosmo Oil in 2007.
The UAE is Japan’s second largest supplier of oil after Saudi Arabia. It thus does not surprise us that a Japanese (and partially UAE-owned) oil company received an extension of their concession, especially in light of the new nuclear cooperation agreement between the two countries.
In another announcement that showcases the strengthening relationship between the two countries, a UAE Clean Energy Venture company called Masdar formed a venture fund with Japan’s SBI Holdings. The two companies have agreed to invest US$10 million each to create a fund that will invest in Solar, Wind, and alternative energy startups. The two companies aim to invest up to US$300 million in alternative energy ventures. The UAE is trying to stay strong in the energy industry as the world shifts to rely on non-oil based energy resources.
As you will further read in the news briefs, the UAE and Japan are also bolstering their airline connections. This was announced before the nuclear cooperation agreement between the two countries. We should probably look forward to more examples of cooperation and/or joint ventures between the two countries in the near future.
UAE NEWS BRIEFS
UAE Foreign Minister Shaikh Abdallah bin Zayed al-Nahyan held a 15-minute phone call with Foreign Minister Hirofumi Nakasone on December 10th. They spoke primarily about the terrorism in Mumbai and cooperation with Pakistan.
Etihad Airlines based out of Dubai, UAE signed an agreement with the Japanese government to start flying weekly flights to Tokyo, Osaka, and Nagoya.
Emirates Airlines already operates daily flights to Osaka and Nagoya. They will also be sharing the weekly flights to Tokyo with Etihad Airlines (five weekly flights each).
The Inter Location Company held a Japanese Art Exhibition in Dubai. Part of the exhibition’s income went to the Rashid Paediatric Therapy Center.