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Jerusalem Center for Public Affairs
Strategic Alliances for a Secure, Connected, and Prosperous Region

Japan and the Palestinian Authority: Foreign Policy and Economic Interest

Filed under: Palestinians, South East Asia

On March 1, 2014, the government of Japan announced a $200 million gift to the Palestinian Authority for the coming year, making Japan the PA’s third largest benefactor, after the United States and the European Union. Japan’s aid to the Palestinians began with the Oslo accords and to date stands at $1.5 billion. After initiating projects such as sewage systems in refugee camps and a hospital in Jericho, Japan moved to channeling its support to organizations it could trust, such as the World Bank, and to infrastructure projects as envisioned by former PA Prime Minister Salam Fayyad.

What lies behind this support? Japan’s material assistance stems from its direct interests in the Middle East, from its general foreign policy leanings, and from lessons it carries from its own historical past.

Japan’s mass industry is wholly dependent on the energy it imports from Arab Gulf states. The black gold that feeds its entire economy flows through the bottleneck of the Straits of Hormuz. Thus, a stable Middle East and the free flow of oil are as vital to Japan as oxygen is to breathing. The Japanese view the Palestinian issue as a volatile element that could upset regional stability and put this energy supply at risk. It therefore follows that from Japan’s perspective, implementing a political solution as soon as possible would stabilize the Palestinian economy and thereby calm the Middle East as a whole. For this reason, Japan devotes attention and resources to developing a Palestinian middle class as a sector that would encourage stability.

Japan also encourages regional economic cooperation as a dynamic that could diffuse tension. Its flagship project is the ambitious “Peace and Prosperity Valley,” which encourages joint ventures between Israel, the Palestinians, and Jordan adjacent to Jericho’s Agro Park in the Jordan Valley. Japan’s aim is to imbue the peoples of the Middle East with an acquired taste of prosperity and the good life. 

From the perspective of its foreign policy, Japan, with its pro-American orientation, sees itself as keeping step with American foreign policy.  When it comes to the Middle East, Japan follows the U.S. lead: the U.S. supports the two-state solution, as does Japan, which invests resources to realize this principle. Recent differences of opinion with the U.S. over China may prove significant, however. Feeling irked by America’s insufficient support in the face of the Chinese naval threat, Japan has moved closer to India and to establishing an effective Japanese military – a step it has so far refrained from taking, as a holdover from its defeat in World War II, to shun its imperialist past.

There remains an important distinction regarding Japan with respect to Palestinian aid. Japan funds numerous development projects on which it exercises direct oversight or supports through international bodies such as the World Bank. However, unlike the U.S. and Europe, Japan makes no direct contributions to the PA budget, and thus is not a player when it comes to the Palestinian Authority’s most pressing issue – its salary payroll.

Finally, unlike Europe, Japan has refrained from the tactic of employing the threat of economic pressure on Israel and the Palestinian Authority as a means of advancing political interests. If peoples of the region have an inherent interest in stability and economic prosperity, Japan believes that this motivation should be optimally leveraged.