Japan-UAE: Mutually indispensable trade partners

Message from Kanji Fujiki, Ambassador of Japan to the UAE

A year has passed since my arrival in the UAE as Ambassador of Japan. Through numerous conversations with Emiratis, from top leaders to young students, I have been frequently reminded of the strong ties existing between Japan and the UAE.

Japan and the UAE have always enjoyed an amicable relationship even before the formation of the UAE. The relationship started in the oil and gas sector more than 40 years ago. Since then, it has significantly expanded, diversified and multi-layered into many other sectors such as renewable energy, environment, education, science and technology, security, finance, tourism, and others. Now, we are in the best-ever relationship, thanks to the mutual trust nurtured through recent reciprocated visits by our top leaders, His Highness Shaikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Prime Minister Shinzo Abe.

Let me first touch upon a few recent examples of positive developments in the economic ties between us.

Today Japan and the UAE are mutually indispensable trade partners. In 2015, Japan was the largest crude oil importer from the UAE, which accounted for 26 per cent of Japan's total crude oil import. Non-oil imports from the UAE have increased by 42 per cent from 2013 to 2014. As for import from Japan, Japan has exported industrial products, such as vehicles and electrical machinery to the UAE, and was the fifth largest exporter to the UAE in 2014. In addition, the UAE today plays an essential hub function to connect Japan with the rest of the world, which has made the UAE more valuable for Japanese industry. The trade relationship is now expanding to various new sectors where we have not seen any business opportunities before. A good example is a new partnership programme in space development. A new contract was concluded between Mitsubishi Heavy Industries and the Mohammed bin Rashid Space Centre this year for the launch of the UAE Mars Mission, which well represents the expansion of trade relations into a new cutting-edge technological phase.

There has also been a vigorous effort to promote mutual direct investment. The Japan-UAE Financial Cooperation Seminar was held in Abu Dhabi to share knowledge among financial authorities in 2014. In May 2016, the Abu Dhabi-Japan Economic Council (ADJEC), a high-level framework to discuss the promotion of bilateral trade and investments, successfully completed its fourth meeting, where initiatives to promote further mutual direct investment were intensively discussed. In 2015, His Excellency Sultan bin Saeed Al Mansouri, Minister of Economy, visited Japan to call for further strengthening of economic ties, particularly participation of Japanese companies in the UAE's infrastructure projects. Although Japan's direct investment in the UAE currently accounts for just a small portion (about 3 per cent in 2014) of its total foreign direct investment, I expect to see greater amount of investment by Japanese companies in coming years. In 2015, indeed, JFE Steel Corporation, Marubeni-Itochu Steel Inc, in cooperation with SENAAT GHC, made a large-scale investment ($300 million in total) to establish a joint venture for the manufacturing and sales of welded steel pipes for oil development and transportation.

Meanwhile, the UAE's total direct investment in Japan amounted to approximately $271 million in 2014, accounting for the largest portion (38 per cent) of the total investment by Middle East countries. Promotion of foreign direct investment in Japan is one of the major pillars of Abenomics, and I expect more investments by the UAE companies, recognising Japan's many advantages as an ideal investment destination. From a business point of view, Tokyo, the capital of Japan, is a world-leading capital market (the 3rd largest in the world), equipped with advanced and sophisticated technology and infrastructure, as well as a well-established legal system. As for its living environment, it has supreme public safety, excellent livability, cleanliness, high-quality systems for education and healthcare, and of course, the world-popular Japanese cuisine, such as sushi. In addition, the diligence and tolerance of Japanese public must be also attractive for investors.

Now allow me to refer to several specific areas that seem to me particularly promising for our mutual future benefits: space development, sports, education, women empowerment, and tourism.

First, space development. Japan Aerospace Exploration Agency (JAXA) signed a cooperation agreement with the UAE Space Agency in March, and also the governmental cooperation agreement was concluded in May this year. Space science, technology, and exploration such as Emirates Mars Mission are of great significance both in promoting space industry such as satellite communication and broadcasting, Earth observation and ground positioning, and in nurturing the spirit of science in young generation by fulfilling their dreams and hopes. I am convinced that Japan and the UAE will benefit greatly from space cooperation in R&D and human resource development, which could be an ideal cooperation opportunity in the area of cutting-edge technology.

Second, sports cooperation in Judo. The success of the UAE national Judo team at the Rio Olympic and Paralympic Games, especially the great achievement of earning bronze medal by Mr. Sergiu Toma, greatly impressed us. In recognition of the promising potentials of young Judokas in the UAE, my Embassy, in cooperation with the UAE Wrestling, Judo and Kick Boxing Federation, is planning to hold a new Judo competition for young cadets in November this year, where Japanese Ambassador's Cup will be awarded. I sincerely hope to witness the success of young UAE Judokas at the 2020 Tokyo Olympic and Paralympic Games.

Third, education cooperation. The importance of cooperation in education between Japan and the UAE cannot be overemphasised as it could be nurturing brighter young generations, bringing our two nations closer, and realising a more prosperous future for both of our two countries. At the Japanese School in Abu Dhabi, 25 Emirati students are learning together and sharing valuable experience with Japanese students. I believe that they will contribute to strengthening our bilateral ties by bridging the hearts and minds of the two nations. Student exchanges at a higher education level as well as Japanese language education programmes are on the rise in the UAE. The Japanese Language Course operated by my Embassy admitted 132 applicants this autumn term, which was the largest ever in its history of more than 20 years. The Japanese Speech Contest is now an annual target for Japanese language learners.

Fourth, cooperation in women empowerment. The expansion of women empowerment in the UAE strongly draws my attention. I admire the strong and wise leadership of this country to provide women with increased educational, social and economic opportunities, and to enable them to succeed in various fields. As Japan has been making similar efforts, cooperation in this field will be fruitful and mutually beneficial to further enhance participation of women in both countries.

Fifth, tourism is a field that the Japanese Government is now strategically focusing on. Japan has set a goal to double its inbound tourists by 2020. In order to achieve that goal, welcoming more Muslim tourists is a must. In this regard, Japan has launched several initiatives such as designing travel tours tailored especially for Muslims, and increasing the availability of halal food. As a result, the number of Emirati tourists visiting Japan has increased by about five times in the past five years. The number of Japanese tourists visiting Abu Dhabi has also increased by 30 per cent in the same period. The important reason of this increase is, without doubt, a wide availability of comfortable flights by Emirates airlines and Etihad Airways: 35 direct flights every week from Dubai and Abu Dhabi to Japan. One report estimates that the ratio of Muslim tourists in Japan to the total number of visitors will go up to 19 per cent from the current 4 per cent by 2020. I really hope that through the cooperation among relevant authorities and organisations in both countries, the estimate would be realised.

It is so pleasing to witness such a variety of new cooperative initiatives currently in progress, strengthening the relationship between Japan and the UAE. I am committed to working together with the people of the UAE to develop the relationship between our two countries toward a future of mutual trust
and prosperity.

Data sources: Ministry of Finance in Japan - Trade Statistic of Japan from: JETRO - Foreign Trade Annual Database World Integrated Trade Solution World's Leading Authority on Halal Travel - CrescentRating Abu Dhabi Tourism and Culture Authority Immigration Bureau of Japan

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