Section 7 The Middle East and North Africa

1 Overview

The Middle East and North Africa (the Middle East) is located in a geopolitically important area: the crossroads of Europe, sub-Saharan Africa, Central Asia and South Asia. The region is a vital supplier of energy, representing approximately 50% of the world's oil reserves and 40% of the world's natural gas reserves and also a market with high potential, pursuing the diversification of economy and decarbonization, especially in the Gulf countries, against a backdrop of a high population growth rate. In addition, Russia's aggression against Ukraine on February 24 caused energy prices to rise sharply, and attention was focused on the role of oil and gas-producing countries in the Gulf region in stabilizing energy markets.

Meanwhile, the region has gone through various conflicts and disputes along its history, and still faces a number of destabilizing factors and challenges. In recent years, regional tension is growing over Iran, and political turmoil continues in various regions since the “Arab Spring” in 2011. The civil war continues in Syria, resulting in a large number of refugees and internally displaced persons, and it has made a great impact on the stability of the entire region, including its neighboring countries. In Yemen, parties concerned, including the Government of Yemen and the Houthis agreed on a temporary truce in April, 2022, but this expired in October, and the severe security and humanitarian situation continues. The risk of the spread of violent extremism such as the “Islamic State of Iraq and the Levant” (ISIL) also remains in some areas. Furthermore, in Afghanistan, there are concerns that the serious humanitarian situation since the Taliban's takeover of Kabul in August 2021 may further deteriorate.

On the other hand, since 2020, the situation in some countries and regions is shifting toward rapprochement. In 2020, the United Arab Emirates (UAE), Bahrain, Sudan, and Morocco agreed to normalize diplomatic relations with Israel, and in 2021, the Qatar diplomatic crisis¹ that had been ongoing since 2017 was resolved. Other developments that contribute to regional stability include Turkey's normalization of its diplomatic relations with Israel in 2022 for the first time in four years, and the demarcation of the maritime boundary between Israel and Lebanon, mediated by the United States.

The Biden administration of the U.S., inaugurated in January 2021, has announced that it will hold talks with Iran to return to the Iran nuclear deal, from which the previous administration had withdrawn. Regarding the Middle East Peace Process, the administration has worked on improving relations with Palestine. The impact of these　policies on the Middle East continues to be the focus of attention. In July 2022, President Biden visited Israel, Palestine, and Saudi Arabia for his first visit to the Middle East since taking office. China is also strengthening its ties with the Middle East. In December, President Xi Jinping visited Saudi Arabia for his first trip to the Middle East since 2016, where he held the first China-Saudi Arabia summit, the first China-GCC (Gulf Cooperation Council) summit, and the first China-Arab summit.

Japan imports over 90% of its crude oil from the Middle East, and it is extremely important for Japan's peace and prosperity to promote peace and stability in the Middle East and to maintain and develop good relations with countries in the region. From this perspective, Japan in recent years has been striving to strengthen relations with countries in the Middle East in a wide range of fields that include economy, politics, security, culture, and people-to-people exchanges. In March, Foreign Minister Hayashi visited Turkey and the UAE, and in August, he visited Tunisia to attend the Eighth Tokyo International Conference on African Development (TICAD 8). In September, Prime Minister Kishida and Foreign Minister Hayashi held talks with the countries in the region, seizing the opportunity of the UN General Assembly and the state funeral for the late Prime Minister ABE Shinzo, and confirmed their close cooperation for regional stability with the respective countries. In addition, amid the instability in the energy market in the wake of the situation in Ukraine, Japan repeatedly conducted high-level outreach to the Gulf countries to help stabilization of the international crude oil market, including through telephone calls.

Following Russia's aggression against Ukraine, the Middle East, which depends on imports from Russia and Ukraine for much of its staple grain consumption, has been greatly affected by rising wheat import prices and other factors, and Japan is providing various assistance for these regions in cooperation with other relevant countries. For example, in July, Japan decided to provide a total of approximately 200 million US dollars in food security assistance for Middle Eastern and African countries and others that are facing a food crisis due to the situation over Ukraine. Japan, at various levels including the political level at international conferences, has been sending a message about its support for the countries affected by Russia's aggression, as well as the importance of responding to the situation especially in vulnerable regions, based on the principle of human security.

In 2023, a large-scale earthquake occurred in southeastern Turkey in February, causing severe damage in Turkey and Syria. In response, Japan has been implementing various kinds of assistance, including dispatching Japan Disaster Relief (JDR) teams (rescue teams, medical teams, etc.), transporting medical team equipment and materials by Japanese Self-Defense Forces (SDF) aircraft, providing emergency relief supplies, and implementing emergency grant aid, based on the policy of promptly providing necessary support on the basis of local needs.

• 1 In June 2017, Saudi Arabia, the United Arab Emirates, Bahrain, Egypt, and other countries announced they had severed diplomatic relations with Qatar, citing Qatar's support for the Muslim Brotherhood, which is designated a terrorist organization by these countries.

・Trade: China ranks first in terms of both import and export. The share of Japan and the U.S. has been on a long-term decline. Japan was the largest export destination until it was overtaken by China in the 2010s (Saudi Arabia and the UAE are main exporters to Japan. China has significant trade with Iraq and Turkey in addition to Saudi Arabia and the UAE). Not only European countries and the U.S., but also India has a certain presence in the region. In 2021, Japan ranked third in terms of its share in the region's exports, and 10th in terms of imports.²

・Investment: Israel, Saudi Arabia, and Turkey account for the majority of the region's inward FDI stock. Among these, the U.S., which is the largest foreign investor in Israel, has a large presence. Europe also has a certain share. In contrast, Japan and China have a limited share.

・Finance: External debts to various countries exist, mainly to Europe and Japan. Recently, external debts to China have been on the rise. Japan was the second largest bilateral creditor country in 2021.

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• 1. See page 193 for notes regarding this data.
• 2. While only limited number of countries such as Japan, the U.S., and China are illustrated in the chart, the rankings in the text are for all countries/regions for which data is available (including countries, etc. in the relevant region).