Chapter III.
Regional Developments

F. The Middle East

Approximately 80% of the crude oil that is imported to Japan comes from the Middle East region. Not only is the Middle East a vitally important region for Japan in terms of securing a long-term, stable energy supply, but it is of extremely great significance for the peace and stability of the entire international community. Based on such recognition, Japan has been strengthening its relations with the region of the Middle East and has been actively involved in ensuring the peace and stability of the entire region.

a) The Middle East peace process

The Middle East peace process began in 1991 and has made important achievements, including the Declaration of Principles on Interim Self-Government Arrangements and conclusion of the Israel-Jordan Peace Treaty, but the construction of the Har Homa settlement in East Jerusalem by Israel's Netanyahu Administration in March 1997 led to the breakdown of Israel-Palestinian negotiations. Peace negotiations were resumed in September 1997, but the negotiations remained virtually at a standstill on such issues as the redeployment (withdrawal) of Israeli troops on the West Bank, security and settlement construction.

The mediation by U.S. President Clinton at Wye River, on the outskirts of Washington, in October 1998 resulted in formation of an agreement (the Wye River Memorandum) on pending issues between Israel and the Palestinians. Some progress was made in line with this agreement, such as the subsequent partial redeployment (withdrawal) of Israeli troops on the West Bank in November, opening of the Gaza International Airport, and removal of the enemy clauses from the Palestinian National Charter, which is equivalent to a Palestinian Constitution; and the international community also sought to provide assistance through, for example, a ministerial conference on assistance to the Palestinians. However, a controversy arose within the Israeli Government as to how to implement the Wye River Memorandum, and the implementation of the agreement has effectively been frozen. The Netanyahu Administration was also criticized not only by the left-wing opposition Labor Party but also by extreme right factions within the ruling Likud Party, resulting in the Knesset passing a dissolution bill in December. The general elections which were to be held in the year 2000 will now be held in May 1999, greatly reducing the likelihood of any major progress in the peace process before the elections. With regard to Israel-Syria negotiations, which have been stalled since March 1996, Israel gave conditional acceptance in April 1998 to UN Security Council Resolution 425, which sought the withdrawal of Israeli troops from southern Lebanon, but there are still no definite prospects for resuming the negotiations.

With a view to assuming a part of the task of advancing the Middle East peace process, Japan has been seizing various opportunities to urge the parties involved to work toward peace, as well as to encourage Iran and other neighboring countries to take a positive approach to the peace process. Further, Japan has been providing economic assistance to the parties involved in order to develop an environment conducive to peace. It includes more than US$380 million to date in assistance to Palestinians. Japan also announced at the ministerial conference on assistance to the Palestinians in November 1998 its plan to provide up to US$200 million over the next two years. Japan intends to continue its assistance to Jordan, which played a pioneering role in making peace and maintains good relations with both Israel and the Palestinians. Further, Japan is promoting personnel contributions such as sending the election monitors to the Palestinian Council elections and dispatching the Japanese staff to the United Nations Disengagement Observer Force in the Golan Heights in 1996. Japan is also actively participating in multilateral negotiations in areas such as the environment, where it acts as a gavel-holder of the Environment Working Group, tourism and water resources.

b) Iran

In Iran, the reform course espoused by President Seyyed Mohammad Khatami, including "formation of a civil society" and "observance of the rule of law," met with increasingly stiff opposition from hard-line conservative factions, and the struggle for power is intensifying. President Khatami is expected to continue working to promote his reforms, but with weak oil prices bringing about the deterioration of economic conditions, he is facing a difficult political situation.

In the area of foreign policy, the Khatami Administration has developed a course of "dialogue among civilizations" and "alleviation of tension," achieving positive results, particularly in good-neighbor diplomacy with neighboring countries. Vice-ministerial level dialogue with the EU saw steady progress, while Iran also moved actively on economic and political bilateral exchange with EU member countries, France and Italy in particular. Where diplomatic relation had been broken off between the United States and Iran, President Khatami's January appeal for dialogue with the American people has since produced active bilateral private sector exchange. However, because the U.S. Government continues to impose economic sanctions on Iran, the Iranian Government is refusing to engage in inter-governmental dialogue, and there is currently little prospect of the initiation of such dialogue.

Japan attaches importance to its relations with Iran, a major power in the region, and is working to maintain friendly cooperative relations, while also using dialogue to urge Iran to develop more constructive involvement with the international community, and thus to contribute to the stability of the region. In 1998, Japan-Iran relations made progress in a wide range of areas through frequent personal exchanges such as visits to Iran by State Secretary for Foreign Affairs Koumura, a Keidanren mission and the Lower House Committee on Foreign Affairs, as well as a visit to Japan by Iranian Foreign Minister Dr. Kamal Kharrazi.

c) Gulf Cooperation Council countries

Close to 70% of Japan's crude oil imports come from Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain, the six countries of the Gulf Cooperation Council, headquartered in Riyadh. Based on the November 1997 visit of Prime Minister Hashimoto to Saudi Arabia and the visit of his special envoy to the other GCC countries, Japan is actively promoting the construction of diversified and comprehensive friendly and cooperative relations with these countries in economic, political and new areas (education, human resources development, the environment, medical and scientific technology, culture and sports). In 1998, many key government officials from Saudi Arabia visited Japan, including H.R.H. Crown Prince Abdullah Bin Abdul-Aziz and H.R.H. Prince Salman Bin Abdul-Aziz (Governor of Riyadh), while Kuwaiti First Deputy Prime Minister and Foreign Minister H.H Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah visited Japan, marking steady progress in ties between Japan and the Gulf Cooperation Council countries, particularly in terms of personnel exchange.

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