Section 6. Middle East


1. Regional Situation


The Middle East is a strategically important region as a major crude oil supply source of the world. In particular, Japan not only relies on the region for nearly 70% of its crude oil needs but also has exceedingly close relations with Middle East countries as its trade partners and host countries of its investment. In addition to political problems, such as the Iran-Iraq conflict, the Middle East peace problem, the Lebanon conflict and terrorism in many kinds, the region faces various social and economic difficulties caused by rapid economic growth, falls in fiscal revenues in keeping with lower crude oil prices, and other factors. These problems bear close watching as they might become destabilizing factors in the region and an impact on the international society as a whole consequently.

As we have referred to the Iran-Iraq conflict and the Middle East peace problem before (Chapter II. Section 1-2), we shall touch on other major developments in the region.


(1) Extraordinary Arab Summit

One of the notable developments in diplomatic relations among Arab countries in 1987 was the Extraordinary Arab summit meeting, or the so-called Amman summit held in Amman, Jordan, in early November. As stated before (Chapter II, Section 1-2), the meeting was convened to discuss developments in the Iran-Iraq conflict and the threat it poses to the Persian Gulf countries. Thanks to the strenuous efforts made by Jordanian King Hussein, representatives of all the 21 Arab League member nations, including the PLO but excluding Egypt whose membership was being suspended, took part in the meeting, which was also dubbed the summit for understanding and agreement. Among the representatives, there were 15 heads of state. The declaration adopted at the end of the summit touched on the Iran-Iraq conflict and the Middle East peace problem and stated that diplomatic relations between any Arab League Member State and Egypt, which had severed diplomatic relations with other Arab countries because of its peace agreement with Israel, is a sovereign matter to be decided by each state in accordance with its constitution and laws. In the wake of the adoption of the declaration, many countries resumed diplomatic relations with Egypt. By March 1988, all the Arab nations, excluding Syria, Algeria, Libya and Lebanon did so.


(2) Elections in Egypt and Turkey, Change in Political Power in Tunisia

In 1987, Egypt and Turkey, two of the major nations in the region, held referendums for presidency and general elections, respectively. In both, incumbents emerged victorious, further consolidating already stable regimes. On the other hand, President Bourguiba who had reigned Tunisia for 30 years since its independence stepped down.

(a) Egypt

In the referendum for presidency held on October 5, 1987, President Mubarak was reelected, garnering 97% of the votes casted (six-year term).

In the elections for the People's Assembly held in April of that year, the ruling National Democratic Party took a majority of more than two-thirds of the seats contested, resulting in the consolidation of the Mubarak regime for the second term.

The largest domestic issue that confronted Egypt in 1987 was how to manage economic policies in a stable manner against the background of its huge fiscal deficit and external debts. Egypt concluded an agreement with the IMF in May on the supply of standby credit and later reached a basic understanding for debt rescheduling at the Paris Club. At the same time, Egypt took such measures as the simplification of the foreign exchange rates and a hike in public utilities charges as part of measures to drastically reform its economy. The Egyptian government expressed intent it will continue promoting such an economic reform.

(b) Turkey

For Turkey, the year 1987 marked the promotion of its democratic policy in its efforts toward its accession to the EC. Turkey formally applied to become an EC member in April 1987. A national referendum was held in September on whether to take heavyweight politicians off the list of those who had been purged since 1982 in the wake of a coup and a decision was made in favor of the suspension of the purge by a narrow margin. Though this was not necessarily in line with the government's wishes, the ruling Motherland Party, led by Prime Minister Turgut Ozal, took a majority of over three-fifths of all the seats contested, succeeding in its efforts to secure leadership for the country's political management.

On the economic front, the Ozal government's free economic policy produced certain results, such as a high economic growth, but its huge fiscal spending in 1987 prior to the election rekindled inflation and expanded the country's external debts.

(c) Tunisia

On November 7, 1987, Prime Minister Zine El Abidine Ben Ali became the new president, succeeding his predecessor Bourguiba whose reign lasted for 30 years since the country's independence. The transfer of power was carried out on the basis of constitutional provisions because the 84-year-old President Bourguiba was unable to continue performing his duties for reasons of health. As it ended without much confusion, the people in general supported the inauguration of the new president, while Arab and other major countries appreciated the leadership reshuffle.

Since taking office, new President Ben Ali has been aggressively promoting democratization policies.


(3) Situations Involving Lebanon and Syria

(a) Lebanon

The situation remained disorderly in Lebanon in 1987, while Israel maintained its troops in the security zone along the Israel-Lebanon border. On the other hand, Syria stationed troops in the western part of Beirut from February 1987 to maintain public peace and order, boosting the strength of its army there. But in southern Beirut, Hezbollah or the main Shiite Islamic Fundamentalist group, expanded its influence. Moreover, PLO commandos, who had been expelled from Lebanon by Israel and became quiet for a while, have been returning to Lebanon to reassert its influence mainly among refugee camps.

Under such circumstances, Prime Minister Karami, a political leader of the Sunni Moslems, was killed in a bomb explosion accident in June 1987.

Against the background of such deterioration of the public peace and order, hostage-taking incidents involving foreigners showed no signs of abating with two Americans kidnapped between April 1987 and July 1988. During the period, however, 13 hostages were released, among them French and FRG's hostages. As of the end of July 1988, the total number of foreigners abducted and held hostages stood at 16 with the bulk of them Americans.

(b) Situation Surrounding Syria

In October 1986, the United Kingdom broke diplomatic relations with Syria for its alleged involvement in the attempted bombing of an El Al Israel Airlines, while the United States and EC countries announced their own sanctions against Syria. But in 1987, these Western countries, other than U.K. saw their relations with Syria improve.

The United States sent a special envoy to Syria in July and had its ambassador to Syria, who was out since the October 1986 incident. He resumed own duties in September. In February and March 1988, U.S. Secretary of State Shultz visited Syria as part of his Middle East swing.

Furthermore, France, the Federal Republic of Germany, Italy and other EC member countries sent key government officials to Syria one after another.


(4) Situation in Northern Africa

In Northern Africa, the following moves were seen in connection with the so-called Grand Maghreb integration scheme for closing the ranks among Algeria, Morocco, Tunisia, Mauritania and Libya.

Libya, which had become increasingly isolated against the background of international terrorism issues, the Chad conflict and other matters, launched efforts to improve relations with its neighbors. Libyan leader Col. Moammar Gadhafi visited Algeria in June 1987 and exchange of ministerial-level visits between the two countries gathered momentum. But Tunisia broke diplomatic and consular relations with Libya in September 1985 following the expulsion of Tunisian workers by Libya in August 1985. But later the two countries held consultations on ways to restore diplomatic relations with the result that consular and diplomatic service relations were resumed in October and December of 1987, respectively.

Algeria and Morocco, which had been pitted against each other over the Western Sahara, saw their relations improve to a certain extent. In May 1987, Algerian President Chadli Bendjedid held summit talks with Moroccan King Hassan II for the first time in four years. Moreover, exchange of visits by key government officials was carried out between the two countries. In May 1988, they resumed diplomatic relations for the first time in 12 years.

In June, the first summit meeting of the heads of state of the five Maghreb countries was held in Algiers.


(5) Situations in the Gulf Countries in Connection with Iran-Iraq Conflict

(a) Response by Gulf Countries

In 1987, Saudi Arabia and other Gulf countries became strongly concerned about the spread of the conflict to the Gulf region against the background of the prolongation of the Iran-Iraq conflict and increased tensions in the Gulf. Thus their relations with Iran continued with tension. The incident involving Iranian pilgrims in Mecca was the most symbolic of such tensions. In this incident, a group of Iranian pilgrims who allegedly started political demonstrations in Mecca despite the restraint order by the Saudi authorities clashed with Saudi police, resulting in casualties of 400 people or more and the deterioration in relations between Iran and Saudi Arabia. In April 1988, Saudi Arabia broke diplomatic relations with Iran.

Furthermore, Iranian missile attacks on oil-loading ports in Kuwait led the Gulf countries to perceive an enhanced sense of crisis regarding increased Iranian threat. At the end of the Extraordinary Arab Summit Meeting mentioned above, the Arab League issued a declaration to support Iraq and single out Iran for criticism for the first time ever. This represented a shift to a hard-line stance by the Gulf countries that had tried to keep an equidistant policy vis-a-vis Iran and Iraq as much as possible.

However, the acceptance of the U.N. Security Council Resolution 598 calling for an immediate cease-fire by Iran on July 18, 1988 and the effectuation of the cease-fire on August 20 led to the gradual easing of tensions in the Gulf and the Gulf countries have welcomed the change in the Gulf situation.

(b) Situation in Iran

The Islamic Republic regime has seen no major turbulence as its spiritual leader Ayatollah Ruhollah Khomeini has exerted a powerful leadership and has been firmly in control of state affairs. However, an argument over the economic management policy has come to the fore since 1987 in Iran. This relates to the degree of state intervention in economic activities; the reformists attach importance to the just distribution of wealth and advocates the strengthened government's control, while the conservatives respect the inviolability of private ownership and free economic activities that are guaranteed by Islamic law and calls for the elimination of state intervention as much as possible. In June 1987, the Islamic Republic Party, which played an important political role in consolidating the post-revolution regime, suspended its activity because of such a difference of views internally. In February 1988, upon the instructions by Ayatollah Khomeini, the High Council in charge of Matters of Expediency was founded as an organization for adjusting different views over pending economic issues over a medium- to long-term period and making final judgments. In the third parliamentary election in April 1988, the reformist faction won more seats than the conservative faction, thus it was assumed that the majority of the people support the reformists.

Externally, Iran saw its relations with the Gulf countries become strained and its ties with some Western countries, in particular the United States, the United Kingdom and France, exacerbated. Amid the enhanced military tensions in the Gulf, the United States and Iran had a military clash, albeit briefly, in October 1987, and April 1988. In October 1987, the United States announced a total ban on imports from Iran and the restriction of exports to that country in retaliation for Iran's attack on third-country vessels in the Gulf. Iran's diplomatic relations with the U.K. also became strained after the arrest of a staff member of the Iranian Consulate in the U.K. and the subsequent kidnapping of a U.K. diplomat in Iran. The two countries then departed diplomats of each other's country, resulting in the cutting of diplomatic relations. Iran also broke diplomatic relations with France in July 1987 after the French authorities alleged the involvement of a terrorism incident by an official at the Iranian Embassy in France.

Since spring 1988, however, Iran, with a view to extricating itself from the state of isolation in the international community, began to strive to improve relations with Western countries, restoring diplomatic relations with France in June and reaching agreement on the normalization of relations with Canada in July. As regards the U.K. the issue of mutually making reparations for damage inflicted on each other's embassy was settled in July.

(c) Situation in Iraq

Iraq was under military and psychological pressure in anticipation of a major Iranian offensive throughout 1987. In 1988, however, attacks on each other's cities by both Iran and Iraq started at the end of February, and then Iraq recaptured the occupied zones and got a military advantage over Iran before the effectuation of a cease-fire on August 20.

On the economic side, Iraq has not seen any improvement in its foreign currency situation which became serious due to falling crude oil prices and the heavy burden of war costs, and continued to face difficult economic management as a result of snowballing external debts. There are, however, bright spots in the economy that should help Iraq's economic reconstruction efforts - that is, improvement in the crude oil market, the most important factor for the Iraqi economy, such as increases in confirmed crude oil reserves, crude oil export capability, crude oil export volume and earnings from crude oil exports from 1987 through the first half of 1988.

In the domestic politics, President Saddam Hussein launched full-scale efforts to rehabilitate the domestic affairs in February 1987. Specifically, he stepped up his control of state affairs as a whole through frequent cabinet reshuffles and the appointments of his aides to higher positions. He has also proceeded with economic and administrative reform through merger and scrapping of government ministries and agencies, and public organizations and corporations, promotion of privatization, reform of labor law, and introduction of elements of competition, such as the "pay-for-performance" salary system, and the principle of securing profitability in order to revitalize the economy and to improve the productivity under direct control of the Office of the President.

On the diplomatic side, Iraq maintained close relations with Arab countries in general, restoring official diplomatic relations with Egypt in November 1987. Iraq attempted to improve its relations with Syria through good offices of Arab countries, but the relations began to show signs of worsening again since the end of the Iran-Iraq conflict. Iraq's relations with the United States have been maintained well with expansion of economic cooperation ties between them, as the Iraqi military aircraft's mistakenly bombing the USS Stark in May 1987 did not develop into a major problem because of a quick apology offered by Iraq. Similarly Iraq has maintained basically close relations with the Soviet Union, which is the largest arms supplier of Iraq.

(d) Situation in Saudi Arabia

The situation in Saudi Arabia remained stable on the basis of the traditional political system attaching importance to consensus building under the King Fahd regime. Though members of the third-generation young royal family were appointed as state governors, the policy of carrying out personal assignments on the basis of ability was maintained, while striking a balance between technocrats and the royal family.

The Iranian pilgrim's clashes with Saudi police in Mecca sent a shock wave through the area of domestic politics and the government decided to see to it that the safety of pilgrims is secured and came up with a series of measures to prevent the recurrence of the rioting by reducing the number of pilgrims from Iran and other Islamic countries and banning demonstrations.

Amid the continued downtrend of international oil market prices, the Saudi economy remained mired in sluggishness as a whole in 1986, though it showed signs of bottoming out. Under such economic conditions, the government continued with an austerity fiscal policy, while paying due heed to the need for expenditures for the people's livelihood and defense. It also decided to issue government bonds up to $8 billion to finance the deficit for the first time ever in its history of fiscal management, and raised tariffs in order to secure tax revenue increases.

On the diplomatic side, Saudi Arabia put much and broad efforts to lead the Iran-Iraq conflict to an early settlement because the prevention of the spread of the conflict to other Gulf countries was Saudi Arabia's biggest diplomatic task. In 1988, Saudi Arabia, in its capacity as the chairman country of the Gulf Cooperation Council (GCC), exchanged special envoys with the Soviet Union and China, and purchased surface-to-surface medium-range missiles from China. The new approach Saudi Arabia took in its relations with the two communist countries, with which it has no diplomatic relations, drew attention. Moreover, Saudi Arabia restored in November 1987 diplomatic relations with Egypt, with which it had severed such ties since 1978, resulting in progress in cooperative relations between the two countries.


2. Relations with Japan


(1) In view of the importance of Middle East countries in international politics and economy as well as mutually dependent relations between Japan and these countries, Japan has aggressively proceeded with the strengthening of friendly and cooperative relations with them. In 1987, Japan continued with its efforts to foster an environment conducive to an early peaceful settlement of the Iran-Iraq conflict and the promotion of peace in the Middle East. We have already stated such Japanese diplomatic efforts toward peace and concrete contributions in Chapter II, Section 1-2 that dealt with regional problems.


(2) In the area of exchanging VIP visits, Tadashi Kuranari, Minister for Foreign Affairs, visited Morocco and Iran in June 1987 and Iran and Jordan in September of that year for exchanging views on the Iran-Iraq conflict and the situation in the Middle East including the Middle East peace problem as well as bilateral relations. Moreover, in November, the Fifth Japan-Iraq Joint Meeting was held in Baghdad and the Fifth Japan-Egypt Joint Committee took place in Cairo for exchanging views on the Middle East situation and on ways to improve bilateral friendly and cooperative relations.

Furthermore, Sousuke Uno, Minister for Foreign Affairs, visited Syria, Jordan, Egypt and Israel, namely the countries that are parties to the Middle East conflict from June 22 to 27, 1988. as part of Japan's policy to "cooperate for peace," which forms one of the three pillars under the Takeshita Cabinet's policy of "Japan Contributing to a Better World." He was thus the first Japanese Minister for Foreign Affairs to undertake an overseas trip for the purpose of discussing the Middle East peace problem and also the first Japanese cabinet minister to visit Israel.

As for visits by leaders of Middle Eastern and African countries, Belkacem Nabi, Algerian Minister for Energy and Chemical and Petrochemical Industries, came to Japan in April 1987 to attend a Japan-Algeria Joint Committee meeting.

From Turkey, Foreign Minister Halefoglu and Public Works and Settlement Minister Safe Giray came to Japan in April and June, respectively, in 1987, contributing to the promotion of bilateral relations.

From Jordan, Foreign Minister Taher al-Masri and Prince Hassan visited Japan in December 1987 and April 1988, respectively, as guests of the Government of Japan for exchanging views on the Middle East peace problem and ways to promote bilateral relations.

From Sudan, the largest country on the African continent in geographical terms, Prime Minister Al Sadiq al Mahdi paid a visit to Japan in October 1987. He was the first Sudanese Prime Minister to come to Japan, with the result that the year 1987 opened a new page in the history of relations between the two countries.


With regard to exchanging of VIP visits with the Gulf countries, Saudi Arabian Minister of Interior Nayef Ibn Abdul Aziz, one of the most influential members of the Saudi royal family, came to Japan in April 1987. This was the first visit by an influential Saudi royal family member concurrently serving as an incumbent cabinet minister since 1971 when Saudi King Faisal visited Japan. Nayef's visit strengthened the channel of communications between the top leaders of the two countries.


From Yemen Arab Republic, which became an oil-exporting country in 1987, playing an increasingly important role in the economic field, Deputy Prime Minister Abdul Karim Al-Iryani, concurrently Foreign Minister, visited Japan in October.


(3) Japan has been promoting economic and technical cooperation with Middle Eastern countries to help, among others, their industrialization efforts. Moreover, it has been striving to promote mutual understanding between Japan and these countries through cultural exchanges. In 1987, Japan launched a program to invite youths from the Middle East, under which totally 20 youths from Egypt, Turkey, Algeria, Morocco and Bahrain visited this country. In the United Arab Emirates a Japan Week festival was held in January 1988.


(4) In 1987, Japan's export to the Middle East fell by 8% from the previous year to $9.8 billion, while its import from the region rose by 10% to $20.7 billion, leaving a trade deficit of $10.9 billion, up 33%.

Japan's trade with Saudi Arabia, which has been on a down-trend since 1981, showed an increase in volume terms in 1987 for the first time in six years. The volume of export reached $3.2 billion and import $7.3 billion. As for Japan's trade with Iran, Japan saw both export and import rose slightly from the previous year to reach $1 billion and $1.5 billion, respectively. On the other hand, Japan's trade with Iraq shrank sharply with export plunging by 68% from the previous year to $300 million and import nose-diving by 29% to $600 million.

Japan's export to Turkey dropped by 16% from the previous year to $570 million, while its imports from that country jumped by 89% to $190 million. Its trade with Israel saw exports advance by 26% from the previous year to $350 million, while its imports from that country leaped by 49% to $480 million.

As for its energy supply, Japan continued to depend heavily on the Gulf countries with 56% of its total crude oil import coming from the United Arab Emirates, Saudi Arabia and other Gulf countries. If Iran and Iraq are included the ratio of Japan's reliance on the Persian Gulf Region would rise to 67.3%.



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