Japanese-Israeli Relations, The United States, And Oil

, March 1, 2005

Jewish Political Studies Review 17:1-2 (Spring 2005) 

The article surveys Japan’s attitude toward the Jews and Zionism beginning with the positive phase in the 1920s and 1930s. It describes the subsequent negative effect of the oil factor on Japanese-Israeli relations, and the improvement in these since the fall of the Soviet Union, the first Gulf War, and the Madrid Conference. The key change for Japan was the decision by Saudi Arabia, Kuwait, and the Gulf States to abolish their indirect boycott of Israel in September 1991. The fact is underlined that Japanese-Israeli economic relations proved robust enough to withstand the political upheavals during both the first and second intifadas. The development of alternative energy sources to oil would foster further improvement of relations. Although political differences continue, future relations will be based on mutually benefi cial economic interests centering on the growing importance of advanced technology.

Japan and the Zionist Movement

During the British Mandate, Japan supported the Balfour Declaration, which on 2 November 1917 set the goal of establishing a Jewish national home in the Land of Israel.Already on 6 January 1919 the Japanese ambassador to Britain, Sutemi Chinda, wrote a letter on behalf of his government to Dr. Chaim Weizmann supporting the Jewish national home.In 1920, Japan participated in the San Remo Conference that allocated the mandate for the territory to Britain. Although Japan’s contribution to the discussions that preceded the decision was marginal, this marked its first involvement in the Middle East.

The Zionist Federation of Shanghai conducted the contacts with the Japanese embassies and consulates. The first official visit to Japan by its spokesman, Israel Cohen, took place during 8-18 December 1920.The contacts with Japan through members of this Federation continued throughout the 1920s. For example, on 8 June 1922 the Japanese consul-general in Shanghai, Funatsu Tatsuichiro, wrote a letter to Nissim Ezra, its secretary-general, stating that if the subject of a Jewish homeland were to be discussed by the League of Nations in Geneva, Japan would be inclined to support the project.In appreci ation of these contacts, the Jewish Federation of Shanghai decided to include the name of Japanese Foreign Minister Oshida in the “Golden Book” of the Jewish National Fund (4 March 1923).

Most of the Japanese public and government knew little about the Jews and Zionism. At the same time, many anti-Semitic articles, translated from Russian, were published in Japan, originating in the Japanese encounter with Russian anti-Semitism in Siberia, to which the Jews were exiled or fled from the pogroms.Many Japanese viewed the Jews and Zionism as “the Jewish power,” as depicted in the anti-Semitic literature. In fact, the only foreign financier who was prepared to help finance the Japanese war effort against Russia (1904-1905) was an American Jewish banker named Jacob Schiff, who did so primarily as a protest against the anti-Semitism of the Czar and the Russian establishment.

Relations from the Establishment of Israel to 1973

Israel was the first Middle Eastern country to open a diplomatic mission in Tokyo in 1952, which received the status of embassy in 1963. Japan’s foreign policy in the period following World War II and since the restoration of its sovereignty on 28 April 1952 involved reliance on the United States. The successive Japanese governments, however, also espoused a policy of separating economics and politics, thus acting on economic considerations in general and, in particular, vis-a`-vis countries with which Japan had no diplomatic relations.

During the 1950s, structural changes in the Japanese economy affected Japan’s relations with the Middle East, including Israel. In 1952, Japan adjusted its energy policy when it changed from using coal in industry to oil. By 1957, amid accelerated development and in the wake of the Korean War, Japan became one of the world’s largest importers of Middle Eastern oil. The Japanese Foreign Ministry published a “Blue Book” outlining its policy toward Middle Eastern countries, emphasizing the desire to cooperate with the region’s oil producers that were members of the Afro-Asian bloc. In the 1960s, Japan’s dependence on energy from foreign sources reached 80.9 per cent of consumption. About 70 percent of these were in the Middle East, particularly in Saudi Arabia, Iraq, Iran, and the Gulf states. The relatively cheap oil in the 1950s and 1960s was an important compo nent of what would later be called the Japanese economic miracle. Japanese industry became more energy intensive than in other coun tries because of the growing dependence of its heavy industry, its steel and shipbuilding, and its chemical and petrochemical industry on oil; by the beginning of the 1970s Japan’s dependence on imported energy reached 90 percent.

Until the outbreak of the first energy crisis in 1973, Japanese foreign policy was generally neutral on the Arab-Israeli conflict. In 1956, after the Sinai Campaign, it advised the parties to reach a settlement by negotiations. In 1967 Japan criticized Israel’s conquest of the territories, though in the Arabs’ view Japan’s statement was low-key and unconvincing.7

In 1972, two events affected Japanese-Israel relations. In May, Kozo Okamoto and his Japanese Red Army terrorists carried out an attack at Ben-Gurion Airport, killing twenty-six people and wounding seventy, among them many foreign tourists. Amid fears of a negative reaction against Japan, the Japanese prime minister immediately sent a delegation to apologize and offered financial compensation to the victims’ families. This event also clarified the cooperation between the Japanese Red Army and the Popular Front for the Liberation of Palestine (PFLP), then and now part of the Palestine Liberation Organization (PLO). The Arab states, which viewed the murder of Jews and non-Jews on Israeli soil as a legitimate act, protested to the Japanese government against the apology. In response, the Japanese Foreign Ministry sent a delegation to the Arab countries to explain the meaning of the apology and its motives as a humanitarian gesture. In other words, they apologized for the apology.Dispatching personages and delegations to the Middle East to apologize, explain, and soothe became an element of Japanese Middle Eastern policy.

The second relevant event in the 1970s was that, also in 1972, King Faisal of Saudi Arabia visited Japan and warned that Japan’s “continued support of U.S. policy would lead to undesirable results for [it].”Faisal also tried to persuade the Japanese to transfer their oil purchases from Iran to Saudi Arabia, and he stated bluntly that “Japan’s future lies with the Arabs and not with the West.”

The Japanese believed that Faisal’s threat was merely verbal and did not take it very seriously. Hence, the energy crisis of 1973 came as a complete surprise to the Japanese decision-makers.

The Yom Kippur War: A Turn for the Worse

About ten days after the outbreak of the Yom Kippur War in October 1973, the Organization of Arab Petroleum Exporting Countries (OAPEC) decided to raise the price of oil and, concomitantly, to use oil as a weapon in the Arab-Israeli conflict.10

At the end of that month, Saudi Arabia repeated its demand that Japan sever relations with Israel. On 6 November 1973, the secretary-general of the Japanese cabinet declared that: “Israel must withdraw from the occupied territories” and expressed its support for the “legitimate rights of the Palestinian people.” Japan hoped that the Arabs would treat it the same way they had treated the European Community, most of whose members, except for Holland, had not been declared unfriendly states. The Arabs, aware of the debate within the Japanese establishment and sensing Japan’s weak ness, increased the pressure. The United States, however, pressured Japan not to cave in to the Arab demands, and Secretary of State Henry Kissinger emphasized this in a visit to Tokyo in November. In exchange, the Japanese demanded a guarantee from Kissinger for the supply of oil from the U.S. emergency stocks if the oil flow from the Middle East were to be cut off. When Kissinger did not give the Japanese such an explicit commitment, they saw it as justification for changing their policy.11

Amid contending pressures from the Arab and American sides, opinions in Japan were divided. Foreign Minister Masayoshi Ohira and his adviser, Kensaku Hogen, held that Japan should not hasten to decide. The minister of MITI (the Ministry of International Industry and Trade), Yoshihiro Nakasone, who later became prime minister and chairman of the Friendship League with the Arab League, supported the Arab demands to sever relations with Israel, claiming that “energy and markets were just as important to Japan as defense.”

Japanese businesspeople were also divided in their opinions, with some among them arguing that most Japanese imports into the United States were managed by Jews.12 The results of the debate were typical of Japan. The new line adopted was based on a formula with two conflicting components: to soothe and satisfy the Arabs on the one hand, without causing a schism with the United States on the other. The actual significance of the formula included the adoption of a declarative pro-Arab policy; total support by the business world, backed by the establishment, for the rules of the Arab boycott against Israel; and, concomitantly, ongoing low-profile relations with Israel.

On 22 November 1973 (two days before expiration of the Saudi ultimatum on severing relations with Israel), the Japanese government published a statement accepting the Arab interpretation of Security Council Resolution 242, warning that Japan would consider changing its policy toward Israel if the latter did not uphold the resolution. The Arabs, knowing that a decision to boycott Japan was not practical and was liable to show the world the hollowness of the threat, sufficed with this declaration. Japan, as was customary, sent Deputy Prime Minister Takeo Miki to eight Arab countries to explain the change in Japanese policy, in the course of which Miki offered significant financial assistance to Egypt and Syria. During additional visits, Japan offered extensive credits for implementing projects in Iraq and applied the interpretation of “Israeli withdrawal from all territories” to East Jerusalem.

It should be noted that the change in Japanese policy occurred at a time of American demands that the Japanese markets be opened to American products, with the aim of reducing the trade deficit. The Americans claimed, among other things, that Japan, which bene fited from the American security umbrella, was competing unfairly with American firms within the United States and taking a foreign policy line that contravened U.S. policy. This explains the differences of opinion within the Japanese establishment and its lack of compli ance with all the Arab demands: to sever diplomatic and trade relations with Israel, to sell arms to the Arabs, and to pressure the United States to change its policy toward Israel. We must not, how ever, underestimate the importance of the change and its results. Japan became a more vociferous supporter of the Arabs and the PLO than other Western countries-except for Greece and Spain- and made every effort, even when not required, to implement the Arab boycott of Israel with the total backing of its political-economic establishment.

The years 1973-1985 were the pro-Arab period in Japan’s foreign relations, marked by discrimination against Israel. The consensus in the Japanese bureaucracy, ruling party, and business community was to maintain very low-profile relations with Israel while expressing, in every manner possible, support for the Arabs and the PLO. This state of affairs continued until the mid-1980s, and the effects were still felt at the start of the Gulf War in 1991.

The Ramifications of the First (1973)and Second (1979) Oil Crises

The deep freeze in the relations continued until the visit of Foreign Minister Yitzhak Shamir to Tokyo in September 1985. The Japanese took every opportunity to express their pro-Arab line particularly in international institutions. Sometimes they used arguments taken from the ideology of Japanese militarism of the 1930s and 1940s. In those decades, there was a wide consensus in Japan that the availability of raw materials and energy determines a nation’s strength and level of development. Japanese militarists invoked the vital need for raw materials when they conquered Manchuria and large parts of China and Indonesia. An entire generation of Japanese was educated on the ideology of the pivotal importance of raw materials. The Japanese government also continued this line in the 1970s, and a generation of Japanese Arabists regarded the Arab states as a crucial source of oil and a primary market for Japanese products. The Japanese establishment disseminated King Faisal’s statement that Japan’s future lay with the Arabs and not with the West. Japan established bodies whose task was to strengthen relations with the Arab world including the PLO. At the same time, the perception gained ground, fed by ignorance, that relations with Israel would detract from relations with the Arabs. The Arabs’ work in Japan in 1973-1985 was easy. Most of the propa ganda about implementing the Arab boycott was put forth by the Japanese-with even greater fervor than required, since this was seen as serving Japan’s interest.

Funding and assistance for anti-Israeli activities were provided by Japanese institutions and companies; the following are examples.

1. Setting up a pro-Arab lobby in Japan, initiated and funded by Japanese political and economic institutions.

Following the first oil crisis, the Japan Oil Development Company (JODCO) was established and became the instrument for cementing relations between Japan, the Arab countries, and the PLO. Former Foreign Minister Toshio Kimura was appointed chairman of the Japan-PLO Friendship League. Yoshihoru Nakasone was appointed chairman of the Friendship League with the Arab League. Nakasone also served in this capacity while he was prime minister, which is inconsistent with diplomatic practice. Toshiki Kaifu, a senior member of the ruling party and also subsequently a prime minister, was ap pointed chairman of the Friendship League with Jordan, and there were several other appointments of chairmen of friendship leagues with Arab countries. The Japanese officials employed by these leagues had all material published in Japan on relations with Israel translated into English and brought it to the attention of the Arab and PLO embassies and missions, thus giving direction to their anti-Israeli activi ties. Except for what was customary in the Communist countries during the Cold War, there is no precedent for a country and its institutions establishing and financing such activities against another country on its own territory. But this has been done publicly in Japan from the 1970s to this very day.

Iko Kasuga, chairman of the Japan-Israel Parliamentary Friend ship League, was for many years until his death chairman of the Social Democratic Party (DSP), the opposition to the ruling Liberal Democratic Party (LDP). Kasuga and his replacement, Masaaki Nakayama (the brother of the former foreign minister, Taro Nakay ama), were true friends of Israel and worked diligently to cultivate relations under the adverse conditions. The Japan-Israel Parliamentary Friendship League did much to strengthen the relations, but never acted against the interests of the Arab states or the PLO on Japanese territory.

It was then hard to find a senior Japanese who was prepared to be chairman or even a member of the Japan-Israel Parliamentary Friendship League and support Israeli positions. Only in the mid 1980s did several important LDP parliamentarians agree to add their names to this League. In a meeting held on behalf of the Friendship League with Abba Eban, who visited Japan at the head of an Israeli parliamentary delegation in September 1986, fifty members of parlia ment from various factions participated. Conspicuously absent were parliamentarians from the Japanese Socialist Party (JSP). In contrast, the entire Social Democratic (DSP) faction stood behind its party chairman Kasuga, as did several important members of the Komeito (“Clean”) Party. Opposition members of parliament who were mem bers of the Friendship League, however, did not publicly criticize Japan’s discriminatory policies against Israel.

2. The negative influence of the Arab boycott in Japan.

Japan’s approach to the Arab boycott was different from that of other industrialized nations. The acquiescence of its political-econom ical establishment went far beyond the requirements of the Arab boy cott rules. The establishment and the companies willingly complied with the boycott even when it came to matters that were not prohibited by its rules, such as the sale to Israel of cars and other finished products, and did not try to circumvent it as was done in other countries. To critics, the Japanese government responded that it did not interfere in the economic decisions of Japanese companies.13

Foreign Ministry, MITI, the Keidanren (an umbrella organization for large Japanese companies), or the Tokyo Chamber of Commerce regarding ties with Israel was answered with explanations about the need for caution so as not to infringe the boycott. In certain cases officials warned Japanese companies against ties with Israel, and in other cases they informed on companies that did maintain such ties. During that entire period, Japan officially reiterated to the United States its adher ence to the principles of “free trade.”

The Japanese government’s claim that it did not interfere in the companies’ economic decisions was only partially accurate. Although there is a certain amount of decentralization in Japan, at that time it was the government that conducted negotiations on behalf of its companies regarding the voluntary restriction of automobile exports. It also conducted, and still does, negotiations for semiconductors, information technology agriculture, fishing rights, and so forth. As such, what the Japanese government could have done, but refrained from doing, was to direct the Tokyo Chamber of Commerce not to issue confirmations that an official Japanese entity did not trade with Israel, its products did not contain spare parts from Israel, and Jews did not serve on its board of directors.

It should be noted in this context that the rules of the Arab boycott were determined back in 1945-1946, before Israel’s establishment, with the aim of choking off the economic development of the Jewish community in Palestine by boycotting goods and services produced by Jews. In the 1950s, the direct or “primary” boycott system, which prohibits Arab companies from trading directly with Israel, was ex tended to the “secondary” and “tertiary” boycott. The former refers to prohibiting trade with companies (from a third country) that trade with Israel or whose owners are Jewish; the latter requires companies from a third country to force their secondary suppliers not to trade with Israel. There is a fourth type which is a voluntary boycott of Israel. The Japanese companies, in cooperation with the establishment, excelled in their voluntary boycott of Israel. Even the Japanese media joined in this. For example, they did not report condemnations of the boycott by American politicians visiting Japan. When then New York Mayor Ed Koch sharply criticized the Japanese capitulation to the boycott during his visit in 1985, claiming that it cast Japan’s adherence to “free trade” in doubt, no Japanese-language newspaper made any mention of these statements.

There are countless examples of Japanese companies’ refusal to sell finished products to Israel, which, as mentioned, is not prohibited by the boycott rules. The pharmaceuticals company Matszushita re fused to supply Israel with pharmaceutical products and equipment for hospitals. Toshiba refused to sell mail-sorting equipment to the Israeli Communications Ministry.

The Arab boycott’s impact on Japan reached a peak during the second oil crisis in 1979. For example, the semi-governmental agricul tural cooperative Zenno, which for twenty-six years had imported potash from Israel’s Dead Sea Works firm, decided unilaterally and arbitrarily to cease importing from Israel. Zenno made known that it had been inundated with letters from the friendship leagues with Arab countries, whose officials had informed about the company’s ties with Israel, and claimed that the company had had to choose between potassium and oil.

The slow and gradual change regarding the boycott began in the second half of the 1980s. Late in that decade and during the 1990s, Japan consumed less energy and fewer raw materials than in the 1970s. The downward trend has continued since. Japan’s economic-financial crisis during the 1990s led to a further significant decrease in its consumption and import of oil.

In 1985, the American Free Trade Committee began to operate in New York with the participation of representatives of all the important American Jewish organizations, headed by Walter (Wally) Stern who had extensive contacts in the Japanese business and banking world. The Committee worked effectively under his leadership, and during his twice-yearly visits to Japan beginning in 1985, he held talks with high government officials, the economic organizations, and large com panies about Japanese adherence to the Arab boycott. His discreet approach influenced the Japanese establishment’s attitude toward this.

The United States also raised the subject of the boycott officially through the under secretary of state for economic affairs, Allen Wallis, during periodic U.S. government consultations with Japan. American public figures such as Congressman Steven Solarz, and Jewish and non-Jewish businesspeople also stressed to the Japanese that adherence to the boycott gave its companies unfair advantages over American competitors that had to obey the American laws against the boycott and discrimination.

It should be emphasized that there is and was no Israeli policy to pressure Japan via parties in the United States. Those who acted did so for American interests. Moreover, the factors that affected the decision of Saudi Arabia, Kuwait, and the Gulf states to abolish the secondary and tertiary boycotts following the Gulf War in 1991, a decision that altered the Japanese attitude toward the boycott, involved American interests. The Americans argued that American soldiers, among them Jews, had fought for Kuwait’s independence and Saudi Arabia’s security and to ensure the flow of oil from the Middle East to Japan, Korea, and elsewhere, whereas these countries boycotted American companies because they traded with Israel and had Jews in their management. The Americans stressed to Japan that it was among the principal beneficiaries of the U.S. effort to maintain the regular supply of raw materials and oil, and Japan could not continue discriminating against U.S. companies and citizens on a religious and political basis.

The Maghreb countries, for their part, never implemented the secondary and tertiary boycotts, while Egypt and subsequently Jordan officially canceled the boycott of Israel when they signed peace agree ments with it.

The Mid-1980s: Gradually Improving Relations

Starting in the mid-1980s, Japan adopted a cautious and gradual policy of improving relations with Israel. Its reasons were:

  1. A decrease in Japan’s dependence on Middle Eastern oil, from 90 percent in the 1970s to about 65 percent at the beginning of the 1990s.
  2. A dramatic decrease in Japanese exports to the Middle East due to the rise in the value of the yen during that period and a decline in the purchasing power of Arab oil producers.
  3. The lack of significant Arab counterreactions to Japan improving the form and content of its relations with Israel, including an increase in bilateral trade.14
  4. Inherent Middle Eastern instability as demonstrated by the Iran-Iraq War, impairing the Japanese government and companies’ ability to plan investments and development in the region. Japanese companies also encountered the phenomena of bad loans, delayed payment or nonpayment for goods and projects that had been supplied. This cost the Japanese government a great deal of money through its foreign risk insurance company.
  5. The realization, again via the Iran-Iraq War, that the claim that Israel was the root of everything that ailed the Arab world was merely propaganda.
  6. Japan’s reluctance to add its adherence to the Arab boycott to the disputed issues between itself and the United States.
  7. The great importance that the Japanese government and the large companies in the Keidanren ascribed to the position of American Jewry in general and the issue of the boycott in particu lar. They emphasized that there were many Jews among those representing the large Japanese companies throughout the United States, and that a large part of Japanese exports to the United States was managed by Jews.15

Milestones on the path of improved bilateral relations, starting in the mid-1980s, were:

  1. Foreign Minister Shamir’s official visit to Japan in September 1985. The Israeli finance and communications ministers also visited Japan that year.
  2. Exchanges of visits by parliamentary delegations in 1985 and 1986.
  3. Two visits to Japan by delegations of the Israeli Industrialists’ Association in October 1987 and in May 1988.
  4. A reciprocal visit to Israel in November 1987 by a delegation from the Keidanren-the first such visit to Israel by the top Japanese economic echelon.
  5. The first seminar on the Israeli economy under the auspices of the Japanese Foreign Ministry, MITI, the Keidanren, and the Kikanren-also an umbrella organization of the Japanese econ omy-in Tokyo and Osaka in 1988 with the participation of Israeli business representatives.
  6. Not least, Sosoke Uno becoming the first Japanese foreign minis ter to visit Israel in June 1988.

What differed from the past was that these were the first events of their kind to be regarded by the Japanese government and business community as openings for advancing relations with Israel, albeit cautiously.16 At that time, Mitsubishi became the second Japanese automobile exporter to Israel, after Subaru. Direct and indirect Israeli exports to Japan in 1988 reached $850 million, and imports reached $650 million. During that period, part of the Israeli exports reached Japan indirectly through Hong Kong, and part of the imports into Israel arrived through Europe and Cyprus.17 

The ambassadors of Arab countries, headed by representatives of the Arab League, the PLO, and Iraq, requested an urgent meeting at the Japanese Foreign Ministry to officially protest the increased Japanese-Israeli trade. They used material in Japanese that was sup plied by officials of the Japanese friendship leagues with Arab coun tries. During those years, the Japanese got used to a ritual in which the Arab ambassadors in Tokyo would protest visits of Japanese per sonalities to Israel, and be told that actually there was no change in Japanese policy toward Israel. Concurrently, the Americans and Isra elis were told that Japan had decided to improve its relations with the Jewish state. Thus, upon his return from his visit to Israel, Foreign Minister Uno explained to the Japanese press that his visit did not in any way signify a change in Japanese Middle Eastern policy, and his office sent these words in writing to the Arab embassies and the pro-Arab lobby in Japan.18 However, the Japanese ambassadors to the United States and to Israel spoke of an upward trend in relations.

During the first intifada, the Japanese Foreign Ministry would regularly summon the Israeli ambassador to protest some action taken by the Israel Defense Forces that affected Palestinian civilians. This, however, did not prevent the Japanese from sending numerous profes sional delegations to Israel in various fields. For example, from January to May 1988, while the intifada was in full force, fifteen Japanese delegations in the fields of science, economics, religion, communica tions, and education-a delegation of university presidents-visited Israel.

The gradual change in relations was influenced by signals from official circles in Japan. Conflicting signals adversely affected the rela tions at the beginning of the Gulf War, but after it, with the Madrid Conference and the launching of the Arab-Israeli political process, the signals were positive and had a favorable effect. Throughout the period, a Japanese company, institution, or bank rarely made its own overture to Israel without coordinating with the establishment. By the end of the 1990s, however, this situation changed because of the diminishing role of the bureaucracy and governmental guidance in Japan.

The Disgraceful Behavior of Japanese Banks and Companiesduring the Gulf War

In January 1991, the Japanese banking association recommended that its members include Israel among the eleven nations for which they should not finance trade as long as the Gulf War continued.19 Thus, the Japanese banks refused to accept letters of credit from Israeli banks or to open letters of credit in favor of Israeli customers. The Japanese banks also halted the transfer of payments that were owed to Israeli companies. On 15 January 1991, the Japanese postal service refused to accept or send mail to Israel. Japanese newspapers joined the chorus and advised Japanese importers of diamonds from Israel to seek alternative sources in Antwerp, Bombay, Amsterdam, and New York. Particularly blatant was the behavior of the Foreign Risk Insurance Company of Japan; in several cases, goods that had already been loaded were removed from ships.

The Japanese establishment’s hysterical reaction to the war stemmed from ignorance and years of anti-Israeli propaganda. If they had bothered to check what had happened to Israeli foreign trade during previous wars, they would have found that the Israeli companies and banks did not cease payments to their foreign suppliers and clients in even one case. After protests swept Israel’s media and business community in response to the Japanese measures, Japan returned to proven tactics, sending Deputy Foreign Minister Hisashi Oda to Israel on 26 February 1991 for a two-day visit to explain and reassure. In fact, the government’s signals to the economic establishment had been full of contradictions and reflected fears about Arab reactions, and more specifically about the fate of several projects in Iraq. Yet, at this time, America was putting together a coalition against Saddam Hussein that included Arab states.

This episode in Japanese-Israeli relations occurred during a period in which Israel’s behavior, even from Japan’s viewpoint, was irreproach able, as Israel refrained from reacting to the Iraqi missile attacks. In contrast, Japan’s behavior was negative and its adherence to the boy cott of Israel did not change as a result of Oda’s visit. Ultimately what calmed the situation were the roundabout solutions found by Israeli banks and companies over the course of time, by financing transactions in or with Japan through the branches of American and European banks.

Changes since the Gulf War

Since the end of the Gulf War and the official cancellation of the secondary and tertiary boycotts by Saudi Arabia, Kuwait, and the Gulf states, there has been a significant overall improvement in bilateral and multilateral relations with Israel. In May 1992, Japanese Foreign Minister Taro Nakayama paid a visit to Israel in which he praised Israel’s restraint during the Gulf War and the progress that had been made at the Madrid Conference. In September 1995, Prime Minister Michi Murayama made the first visit by a Japanese prime minister to Israel. In addition, Prime Ministers Yitzhak Rabin and, later, Benjamin Netanyahu, as well as Foreign Ministers Shimon Peres and David Levy, visited Japan.

An envoy of the Japanese prime minister brought a message to Prime Minister Rabin about Japan’s willingness to take an active part in the peace process. Japan assumed the chair of the environmental committee in the framework of the multilateral process, even during periods in which it stagnated. The Japanese government has financially supported the Palestinian Authority more than other countries except for the United States and the European Union. The abolition of the indirect boycott by Saudi Arabia, Kuwait, and the Gulf states brought to Israel the large Japanese vehicle manufacturers: Toyota, Nissan, Honda, Mazda, and others. Import of the cars harmed Israel in the bilateral balance of trade-proving that it was not an Israeli talent for commerce that had made the balance of trade favorable to Israel for so many years, but rather Japanese companies’ fear of trading with Israel because of the Arab boycott. Since the opening of a JETRO (the Japanese Institute of Foreign Trade) branch in Tel Aviv and of representations of Japanese trading companies in Israel, the trade gap has widened even further in Japan’s favor.

The signing of agreements on avoiding double taxation (1993), on scientific and technical cooperation (1994), on cooperation regarding foreign risk insurance (1997), on air traffic (1998), and on investment protection put trade relations on a new footing. However, one should beware of illusions. The Japanese are still deterred by the high risk involved in investments in the Middle East; only 1 percent of their total foreign investments are in Middle Eastern countries. The air traffic agreement was signed, but not put into practice. Since the late 1990s, however, there have been positive developments with the Japanese beginning to invest in Israeli venture capital funds, Japanese enterprises submitting tenders for infrastructure projects in Israel, and investing in Israel in high tech, a seaweed plant in Eilat, and other ventures.

In the 1990s Japan, which had become the largest single-state contributor of international assistance in the world, began to take more responsibility in the international arena. For example, it dispatched a Japanese army unit to UNDORF (the UN peacekeeping force). The Japanese defense minister went to visit the Japanese soldiers stationed since 1996 on the Golan Heights. Japan also aspired to become a permanent member of the Security Council.

With the boycott weakening as the dominant component in Ja panese-Israeli relations, there was less need for roundabout commerce by Japanese companies-that is, the import into Japan of Israeli pro ducts through a third country (usually Hong Kong), and the export of Japanese products to Israel through agents in European countries, or by switching papers in Cyprus. Whereas until the Gulf War 15-20 percent of the trade was indirect, not listed in the statistics, the data on current trade more or less reflect the existing situation.20

Japan and the Jews

Anti-Semitism came to Japan in three waves. The first originated in Russian anti-Semitism before and after the October Revolution of 1917. In this period the Protocols of the Elders of Zion and various publications on “the Jewish danger” and the “Jewish conspiracy” were translated and distributed in Japanese.21

The second wave, which included the translation of Mein Kampf and other anti-Semitic works, reached Japan during the period of its cooperation with the Axis countries. In their lectures and publications, the Japanese anti-Semites warned of “the danger of Jewish domination of the world.” One of the major anti-Semitic propagandists in Japan during that period, former General Shiodo Novotaka, won the largest number of votes in general elections held in 1942.22

Despite its partnership with the Axis countries Japan allowed Jewish refugees from Europe to settle in territory it had conquered in Manchuria and Shanghai. Many refugees were even allowed to enter Japan itself and stay there until they found another place of refuge. At that time the desperate Jews were not allowed to enter the United States, the territories controlled by Great Britain including Mandatory Palestine, and other countries.

The Japanese consul-general in Kovno, Lithuania, Chiune Sugih ara, saved thousands of Jews, among them a future Israeli minister of religious affairs, Zerach Warhaftig, by giving them transit visas without obtaining approval from the Japanese Foreign Ministry. Sugihara was punished for his humanitarian actions by the Japanese government at the time, and only many years later was he recognized as a Righteous Gentile by the Yad Vashem Holocaust memorial in Jerusalem.

The third wave of anti-Semitism reached Japan following the first oil crisis and originated in Arab anti-Semitism. Masami Ono, an author of many anti-Semitic books, began his career as director of the Center for Middle Eastern Studies in Osaka. The inspiration for his anti-Semitism, including Holocaust denial, probably came from his visits to Arab countries. In If You Understand the Jews, You Will Understand the World, he warns about Jews taking over Japan. The book sold more than 1.1 million copies in Japan and went through several editions. Ono idealized Adolf Hitler and asserted that the Holocaust was Jewish propaganda. He urged the Japanese to awaken to the Jewish conspiracy and to emulate Hitler so as to protect the interests of the Japanese “Volk” from the “insidious Jewish menace.”23

Apart from Ono, the second half of the 1980s witnessed a surge of anti-Semitic books by Ota Ryo, Shoko Asahara, and others. These authors blamed the Jews for Japan’s economic woes and other prob lems, including AIDS. This wave of anti-Semitism continued through out the 1990s. In January 1995, on the day marking the fiftieth anniversary of the liberation of Auschwitz, a monthly magazine called Marco Polo, with a circulation of 250,000, published an article denying the Holocaust and claiming there were no gas chambers in Auschwitz. As a result of the activities of the Simon Wiesenthal Center, advertise ments placed by Japanese and international economic companies in Marco Polo were canceled, which led the publisher to fire the editor and close the newspaper.

Although Japanese anti-Semitism, compared to European, Muslim, and Arab anti-Semitism with their religious, ideological, and socioeconomic roots, is still marginal, it had horrendous effects in the attack by Kozo Okamoto and his comrades. As evident, however, in the episodes of Marco Poloand the behavior of the Japanese banks and companies during the Gulf War, Japan is very sensitive to criticism. This underlines the importance of struggling against Japanese anti-Semitism and anti-Israeli activities by all legitimate means.

The Jewish community in Japan is small. Composed mainly of foreign nationals, it changes in accordance with the number of Jewish employees of foreign firms in Japan. Even those Jews who have lived in the country since World War II have not been given Japanese citizenship; like many others, they are considered foreign residents. Jews’ economic, cultural, and political influence is minuscule, and Japan has not given a foothold to any Jewish economic entity. The late Israeli billionaire Shaul Eisenberg-thanks to whom there is a synagogue in Tokyo and who helped the state of Israel purchase a lot and a building for an embassy-married a Japanese woman and began his career in Japan, but did not remain there and did not receive Japanese citizenship.

There are two pro-Israeli Christian sects in Japan. The larger one, the Makoya, was founded by Ikuro Teshima, who preached the centrality of Jerusalem and that the Japanese are the descendants of the ten lost tribes. Members of the sect, estimated at about 120,000, visit Israel to work and study in various fields, including Judaism and Hebrew. They have published guidebooks on Israel in Japanese and a Japanese-Hebrew dictionary. The second, smaller sect, Beit Shalom, comprises about ten thousand people and was founded by the late Father Takeshi Otsuki. Based in Kyoto, it was the only group in Japan that demonstrated on Israel’s behalf during the Yom Kippur War. Beit Shalom was also active in the cause of Soviet Jewry during the 1980s.

The Oil Factor in Japan’s Current Political Considerations

At the beginning of the 21st century, Japan needs the United States more than at any other time. It needs the American market and the support of the American government to balance the rising power of China, to neutralize the missile threat from North Korea, and to fulfill its aspirations to win a permanent seat on the Security Council. Hence the American consideration in Japanese foreign pol icy, including its economic foreign policy as viewed by the political-economic establishment, the economic establishment, and the com panies, is far more important than all other considerations jointly and separately.

In addition, the Japanese fear of the use of oil as a political weapon, as occurred in the 1970s, faded over the years, particularly from the early 1990s with the rise in significance of oil producers outside OPEC. Moreover, the status of Saudi Arabia, which played an extremely negative role in Japanese-Israeli relations in the 1970s, as well as its ability to influence American positions, changed greatly at the beginning of the 21st century. Even the present period of fluctuating oil prices has not changed basic political facts, which are that Saudi Arabia, Kuwait, and the Gulf states need the United States more than ever as their crutch in the region. Since 9/11 Saudi Arabia has constantly been on the defensive, and its re presentatives in Washington must work hard to deflect verified ac cusations about the connection between its financial support for Muslim movements around the world and fundamentalist Muslim terror. The facts that have been published about the bin Laden family belonging to fundamentalist movements like the Muslim Brotherhood, about their longstanding support for the Taliban in Afghanistan, and about the use of their investments in the United States-through Citygroup, Merrill Lynch, Goldman Sachs-to finance the activities of organizations that were later determined to be terror ones, do not help Saudi Arabia and its emissaries in the United States to convince the American public of the purity of its motives.

The American public was not convinced by the Saudi propaganda blitz explaining that its longstanding policy on behalf of fundamental ist movements was “only” intended to keep terrorism out of its own territory and maintain the stability of the royal family. On the contrary, the awareness among large parts of the American public that Saudi Arabia supports Muslim fundamentalist movements around the world, and the fact that fifteen of the nineteen terrorists who committed the 9/ 11 attack were Saudis, has greatly reduced Saudi Arabia’s maneuvering space in Washington. At the beginning of the 21st century, Saudi Arabia’s status in the United States, both among politicians and the general public, is not what it once was despite the ties between the Saudi royal family and the Bush family.24

What remains from the period of the illusion of Arab political and economic power, Arab unity, Arab “solidarity,” Arab “immense” purchasing power, and the belief in the myth of its ability to utilize the oil weapon to influence American positions, is the Japanese fear of an irrational response by extreme elements in the Muslim Arab world that might damage Japan’s interests around the world. The Japanese are aware that their support for the United States in Iraq makes them more vulnerable. They are also aware that this has no connection to Japanese-Israeli relations.

Until 2030, the world will be dependent on Saudi and Iranian oil. The continuation and duration of this dependence are contingent on the policy decisions of the U.S. government and the means it will allocate to reducing the dependence on imported oil. If extensive use is made of new technologies as alternatives to oil, even if it is done gradually, the status of Saudi Arabia and Iran, whose role in financing fundamentalist and subversive movements is unquestioned, will change, and Japan and other oil consumers will then be less influenced by oil considerations.

In the short term, the oil minister of Venezuela, Humberto Calderon, was confident when he declared in September 2004: “The world must accustom itself to a situation in which oil prices remain high.” However, in the medium and long term it is highly probable that the prediction of Sheikh Zaki Yamani, the legendary oil minister of Saudi Arabia, will come true. He said and reiterated several times during the 1970s: “The age of oil [will] end long before the oil reserves ended.”25

Japanese-Israeli Relations at the Start of the 21st Century

In general, the political dimension of the relations was affected by the outbreak of the Palestinian intifada, while the economic dimen sion was affected by the economic situation prevailing both in Japan and Israel during that period and the financial situation around the world. Bilateral trade, which reached $2 billion during the period of the high-tech bubble, dropped to about $1.5 billion in 2003. For political reasons, Japan halted implementation of cultural, scientific, and air traffic agreements with Israel. Japanese groups stopped visit ing Israel because of an advisory by their Foreign Ministry. The investments by Japanese companies in Israeli venture capital funds also declined. This was connected in no small part to the losses in venture capital funds around the world and in Israel after the high-tech bubble burst.

Nevertheless, the economic relations did not come to an end and new high-tech deals were even made. Israeli tourists continued to visit Japan, and Israeli businesspeople continued trying to get a foothold in the Japanese market. According to records of the Israeli Embassy in Tokyo, about sixteen Israeli companies kept active representation in Japan during 2000-2004, and four of them even acquired Japanese companies while operating them with Japanese managers and em ployees. In 2004, Japanese-Israeli trade began to return to its previous level and Japanese investments in Israeli venture capital funds began to grow once again.

Despite the period of coolness in relations, the political dialogue continued. Foreign Minister Yoriku Kamaguchi visited Israel twice in 2002. She has served two terms as foreign minister and was appointed on 27 September 2004 as special adviser to the prime minister for international affairs and worked in her youth as a volunteer at Kibbutz Ayelet Hashachar.

Despite the Koizumi government’s pro-American policy and public reservations about nuclear proliferation, in February 2004 Japan signed a deal to develop oil fields in Azadegan, Iran. At about $2 billion, the deal is considered one of the largest of its kind to be signed in this period. It reflects a continuation of the traditional policy of acting with oil considerations in mind, while ignoring U.S. demands that its allies act to thwart the nuclear empowerment of dangerous countries. At the same time, Japan tried to convince the Americans to include it in the Quartet that now consists of the United States, the European Union, Russia, and the UN, and wishes to help out with security arrangements between Israel and the Palestinians as part of Prime Minister Sharon’s disengagement plan in Gaza. As noted earlier, Japan still has fears of extremist Arab or Muslim elements damaging its interests, while also recognizing that this is not connected to its relations with Israel.

Japan has a great interest in Israeli technologies in the fields of biotechnology, medical instruments, electro-optics, agrotechnology, informatics, telecommunications, Internet and information protec tion, homeland security, antimissile defense, space science and tech nology, and so on. The Japanese are becoming more aware that the Israeli and Japanese economies are complementary in the sense that advances in these fields in Israel can integrate easily with the manu facturing, marketing, and financial capacity of the Japanese compan ies and help them diversify their products. Whereas Japanese high-tech companies have almost no ties with the Arab world, they have extensive ties with concerns in the United States, where the same Israeli companies operate that are active in Japan. This contributes to appreciation of the benefits of ties with Israel and of tripartite technological cooperation among Japan, the United States, and Is rael. Although slow and gradual, this perceptual change may eventu ally affect many other areas. It will not be the first time high-tech has influenced the low-tech world.

Conclusion

Although the stalemate continues in the political field, we are now on the threshold of a new era in Japanese-Israeli economic relations.

Reasons include the opening up of the Japanese economy to foreign investment, the gradual economic recovery both in Japan and Israel, Japanese technology firms’ continued investment in Israeli firms and venture capital funds, and, not least, Israeli firms’ recent successes in acquiring and operating Japanese companies, a development that op ens promising possibilities. Orbotech, for example, runs its operation in East Asia and the Pacific through Orbotech Japan-a company that is successful in the Japanese market. Despite the reservations of the Japanese Foreign Ministry, two Japanese economic delegations visited Israel late in 2004, including experts in homeland security and in communications.

The era of Japanese companies’ and banks’ massive adherence to the Arab boycott effectively ended in the 1990s. What remains is a voluntary boycott that is maintained out of a mixture of caution and ignorance. The anti-Israeli activities of Japanese officials and of the friendship leagues with the Arab states and the PLO, which were established and are being funded to this day by the Japanese establish ment, are still having a negative effect. Also problematic are the certi fications issued by the Tokyo Chamber of Commerce, which attest-at the behest of the boycott office in Damascus-that a particular com pany does not trade with, invest in, or use spare parts from Israel and that its board of directors contains no Jews. The Japanese political and economic establishment, however, is aware that there is no longer any danger of the oil weapon being used against Japan by Saudi Arabia, Kuwait, or the Gulf states. This time, no one in Japan accuses Israel of being the cause for the rise in oil prices. Nevertheless, oil-related considerations will continue to influence Japanese policymak ers, as evidenced by the $2 billion investment in discovering new oil reserves in Iran.

Thus, while the political differences between Tokyo and Jerusa lem continue, the economic relations have shown notable resilience during the recent difficult period. Presumably, the political relations will improve as a result of President Bush’s reelection and the ex pected adoption of new policies after the death of Yasser Arafat. The outlook for future relations both in the political and economic spheres is one of cautious optimism. Oil will remain a factor in Japan’s policies in the short term. However, what will have an impact on relations in the medium and long term will be the processes connected to developing innovative technologies to lower the cost of oil replacements. Also, Japanese firms’ interest in the growing importance of advanced technology will increasingly affect Japanese-Israeli relations.

 

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Notes

 

1. Naoki Maruyama, “Japan’s Response to the Zionist Movement in the 1920′s,” Bulletin of the Graduate School of International Relations, 1984, pp. 28, 30.
2. Central Zionist Archives, Jerusalem, copy Z4/2039. The same copy is kept at the Weizmann archives in Rehovot.
3. Yasumasa Kuroda, “Japan, the Arab World, and Israel,” article derived from his lecture at the Truman Institute, Hebrew University of Jerusalem, 24 March 1988.
4. Israel Messenger, Monthly Bulletin of the Zionist Federation (Zionist arch ives), March 1923, Central Zionist Archives, Jerusalem.
5. Maruyama, “Japan’s Response,” p. 30.
6. See the section below on “Japan and the Jews.”
7. Naoki Maruyama, “Japan’s Middle East Policy in a Dilemma,” Bulletin of the Institute of Middle Eastern Studies, 1986, p. 264.
8. Kobi Moshe, Japan-Israel Chamber of Commerce Bulletin, 1989, p. 2.
9. W. Nester, “Japan’s Oil Diplomacy,” JWQ, January 1989, p. 77.
10. Maruyama, “Japan’s Middle Eastern Policy,” pp. 270, 275.
11. Nester, “Japan’s Oil Diplomacy,” p. 78; Katakuro Kunio, “Narrow Options for a Pro-Arab Shift,” Annals of Japan Association for Middle Eastern Studies, 1973, p. 140.
12.Maruyama, “Japan’s Middle Eastern Policy,” pp. 271, 274.
13. W. Stern, “Japan a Willing Participant in the Arab Boycott of Israel,” Middle East Review, Fall 1988, p. 47.
14. Yaacov Cohen, “Japan-Israel Relations 1985-1988,” Economic Quarterly, No. 142, October 1989, p. 222.
15. Ben Ami Shilloni, “Japan and Israel,” Middle East Review, Winter 1985-86, pp. 17-18.
16.See “The Japanese Are Coming,” Ha’aretz, 23 November 23 1987 (Hebrew); Oded Shorer, “Japan-There’s a Chance,” Ma’ariv, financial supplement, 28 June 1988 (Hebrew).
17. Cohen, “Japan-Israel Relations,” p. 231.
18. Antony Lerman, “Japanese Compliance with the Arab Boycott of Israel,” Research Report, Institute of Jewish Affairs, New York, February 1991, p. 9.
19. Ibid.,p.1.
20. Cohen, “Japan-Israel Relations,” pp. 222-23.
21. Rotem Kowner, “On Ignorance, Respect and Suspicion: Current Japanese Attitudes towards Jews,” Vidal Sassoon International Center for the Study of Antisemitism, the Hebrew University of Jerusalem, 1997, p. 5.
22. Ben Ami Shilloni, “The Japanese and the Jews,” paper presented at the International House of Japan, Tokyo, 10 May 1985 p. 16.
23. David Goodman, “Japanese Anti-Semitism,” Book World Review, November 1987, p. 403.
24. Craig Unger, Bush and the House of Saud (New York: Scribner, 2004).

25. ”The End of the Oil Age,” The Economist, 25 October 2003.

About Dr. Yaacov Cohen

Dr. Yaacov Cohen completed his doctorate in economics at the University of Vienna while employed by the Israeli Foreign Ministry. He has held various foreign assignments: ambassador to Spain, 1992-1995; to Japan and South Korea, 1985-1988; to Venezuela, 1981-1985; chargé d'affaires in Turkey, 1980-1981; minister (economy) at the Israeli embassy in Belgium and deputy head of Mission to the European Union in Brussels, 1972-1976. In Jerusalem: deputy economic director of the Foreign Ministry, 1988-1992; head of the foreign trade desk of the Ministry of Industry and Trade, 1976-1980;. Since 1995, Dr. Cohen has been senior lecturer in East Asian Studies at the Hebrew University.