Japan and Central Asia

Sasakawa Peace Foundation

Well, thank you very much. Having been in the “hot seat” here, I must say it is nice to be a commentator, as opposed to a speaker. It’s a particular pleasure to do this because I’m the Deputy Assistant Secretary of State for Central Asia, but you may know that a very considerable part of my career has been working with Japan or on Japan. So it’s nice to have the chance to talk about Japan and the United States and Central Asia.

This is Kawato-san’s night, so I will be brief. I’m just going to make three points: one about Japan; one about Central Asia; and one about U.S.-Japan relations. And then I’m going to put a few questions out there.

So first, on Japan.

I was in Bishkek last week, and in addition to meeting a variety of people in Kyrgyzstan, the Foreign Minister of Lithuania happened to be in town. So I had a cup of coffee with him. And it was very interesting because he was there partly on EU business, but partly also on bilateral business to talk about Lithuania’s relationship with Kyrgyzstan and other countries. And that’s interesting because we are living at a moment in time when almost everyone seems to be interested in Central Asia—Russia, China, the United States, Europe, Japan, India, even Lithuania. So at times like these, when everyone is interested in this part of the world, how do you sort through that? One way I sort through it is to ask myself a couple of questions:

The first is: the countries that are interested in the region hit what I think of as all of the major “baskets” of interests. What are these baskets? (1) Do they have a strategic interest in the region, a real strategic interest? (2) Do they have a commercial interest in the region? (3) Do they have an assistance program in the region? And (4) do they do project finance in the region?

Then, the second question I ask myself is: how do you measure that interest? There are a couple of measures that at least I rely on. One is: is the country present? Does it have embassies? Does it a have a presence across the region? Because not everybody does in this region. What about levels of political interest and intention? What about money?

The interesting thing about Japan in this region is that it hits all of the major baskets of interests. And you can measure those baskets of interests in a very tangible way, which is why I think Japan will become an even more important player in the Central Asian equation.

It’s easy to see the strategic and political interest, and Kawato-san talked a little bit about this. You see it going back to the 1990s with Prime Minister Hashimoto’s declaration of “Silk Road Diplomacy.” But you see it particularly in recent years, with the visit of Prime Minister Koizumi to the region and with the establishment of the “Central Asia Plus Japan” mechanism, with Afghan involvement. You see it in a whole variety of ways.

Japan has a very robust assistance program in the region through JICA, the Japan International Cooperation Agency. Japan, we all know, does project finance very well through JBIC, the Japan Bank for International Cooperation. It has been very active in, I think, all five countries, even Turkmenistan.

As Kawato-san has said, there hasn’t been a lot of commercial interest, but there’s growing commercial interest, particularly in industries like uranium development and processing, as you said. Part of the challenge for Japanese industry has been that most Japanese business interests in the region have been in the implementation of Yen loans rather than in direct private sector FDI into the region. But that is going to change, I think, in certain sectors: beginning small, but five years, six years, ten years down the road, I think, the trends are upward.

Likewise, if you look at the measurements of interest that I gave you, Japan has embassies in all five capitals, which is something I can say for very few countries. Japan has some level of political interest as we see with the Prime Minister’s visit. And most importantly, Japan has made substantial investments in the region through JBIC and through JICA.

So as you sort through the clutter of speculation about Central Asia—who is interested, who is not interested, and what does it mean to be interested—it has always struck me that Japan, in all of these dimensions, has played, and will continue to play, a fairly substantial role, certainly comparatively and I think increasingly robust over time.

Second, I want to make a point about Central Asia.

One of the things that, I think, from an American vantage point, is most interesting is that we are living at a moment when what Central Asia needs, particularly on infrastructure and on the economy, happily coincides with a lot of Japanese strengths. And you see this particularly in sectors like power generation, infrastructure, transport infrastructure, rail infrastructure, road infrastructure—and Kawato-san has talked about some of those things—and also education, healthcare, and the transition to a more market-based economy. And you see that reflected in the assistance program, but also in the Yen loan program that Japan has developed for the region.

The infrastructure, I think, is most interesting, in part because of the American government equity in the bridge. We are building a $36 million bridge that I saw last week. I drove down from Dushanbe to the Afghan border to see the bridge: it is almost done; it’s pushed all the way across the river, and it is going to open over the summer. And what is interesting is that you can conceive of a future in which this bridge links to a road system that is being built in Afghanistan—a ring road in Afghanistan, which is a genuinely multinational project—but also links to the various road projects that Japan, China, the Asian Development Bank, and others have been so heavily invested in inside Tajikistan. So as Kawato-san said, you have this genuinely multinational infrastructure built in partnership with Tajikistan, Afghanistan, and other countries in the region. And so you will have an international road linked to an American-built bridge, linked to a Japanese-built road, which links ultimately to Chinese-built roads, and there is other infrastructure in the region, too. And so Central Asian countries, working in partnership with Japan, the United States, China, and others are beginning slowly—but in what will be a very substantial way over time—to create the kind of infrastructure that will facilitate trade, not just from Central to South Asia but within Central Asia itself. Same on airports, roads—and Kawato-san talked about some of those.

The third point I wanted to make is on U.S.-Japan relations. Because we are also living in a moment when two trends that are quite interesting are converging at the same time:

One is what I would call the “globalization” of the U.S.-Japan bilateral relationship: a U.S.-Japan relationship that increasingly is focused on problems, challenges, opportunities, not just in East Asia but on a global scale, and on challenges of global scope.

It makes sense. Because if you look at the international architecture, it was established in the late 1940s, largely by Americans and Europeans, and it in many ways does not reflect the weight that Japan—and Asia, more generally—has come to have in the international system. It’s why you have a Permanent Five in the UN Security Council without Japan. It’s why the voting weights in the International Financial Institutions are skewed in many ways toward a heavy voting weight for the Europeans and a much lower voting weight for China, for instance, which has only a 3% voting share in the IMF. I think it is about 3%.

In light of Japan’s extraordinary role in the world—second largest economy, second largest donor of development assistance, a major financial and commercial player—in all these senses, you have seen the trend in U.S.-Japan relations toward an increasingly global scope to that relationship. And Central Asia fits nicely into that. It’s not the only region where the U.S. and Japan have some common and overlapping interests. But in many ways, it is a natural area for the United States and Japan to expand their coordination.

That converges nicely with the second trend, which is the American search for partners in Central Asia.

We have some traditional partners, like the European Union, that we work very well with, and that we have worked very well with for a long time. But we are also at a moment when we have discovered that the United States working alone—or other partners working alone—can’t pursue the kind of common agenda that we have tried to pursue with Central Asian countries for stability, for security, for market-based reform, for democratic reform. We can pursue that more effectively, more efficiently, and much more expansively working with partners than working alone.

So we are looking both to our traditional partners and to some non-traditional partners. It is one of the reasons why, in the eight months that I have been doing this job, in addition to spending a lot of my time on the road in Central Asia, I spent a lot of time around the world. I have been to Tokyo. I have been to Seoul. I have been to Ankara. I have been to Brussels and London and Berlin. And I’ll go off to Delhi very soon. So, we are looking for partners, both traditional and nontraditional. And Japan, we feel, is one of our best and most promising partners in the region.

So you have this interesting convergence of a U.S.-Japan relationship that is globalizing, at a time when the United States is also looking for partners in Central Asia.

So, on our part, we are doing a lot of interesting things with Japan in the region. We have inaugurated some policy talks. These are really integrated policy talks: they concern strategy and policy, but also assistance as well. Because it is not enough just to talk about policy. So, we try to talk about our strategic priorities, but also our policy priorities, and then the assistance priorities that flow from that. We have done that once. We are going to do it again. We do it on a genuinely interagency basis.

We have a lot of very robust assistance coordination between the U.S. Agency for International Development and JICA. We are talking to the Asian Development Bank (ADB)—Japan, the European Union, and some of the member countries—about the possibility of taking the ADB’s Central Asia Regional Economic Cooperation (CAREC) mechanism and trying to create something we like to call “CAREC Plus 3”—the three being the major market economies, the United States, Japan, and the European Union, as a way of coordinating with the international financial institutions and the member countries that are part of the CAREC program in order to help promote market-based solutions to the challenges in the region. So that is something we have been talking both to our Japanese and European colleagues about, and also to the ADB in Manila, and others.

As Kawato-san’s story about coordination with the American ambassador in Tashkent demonstrated, we coordinate a lot in the field, on the ground, where it matters. And we do that among Chiefs of Mission. But we also do that among personnel at embassies. And we do that among our assistance missions as well. In fact, I was in Dushanbe and Bishkek just last week, and I met with our Japanese counterparts on the ground and a lot of others, too. But it all reflects, I think, the fact that we view Japan as having a potentially important and genuinely unique role to play in the region.

I'll stop and just leave you with a couple of questions that occurred to me.

The first is: can Japan continue to sustain the level of interest that we have seen in the region over the last few years? The Koizumi visit was important, but unprecedented. And there is a question of whether we will continue to see that same level of political interest in Central Asia that I think we have seen in the last few years.

A second question, as I think both Kawato-san’s comments and my own suggestions pointed to, is whether Japan, particularly Japanese private sector companies, can develop a real commercial interest in the region? So there is a transition from just doing Yen loans to the kind of private sector FDI and commercial interest that ultimately will help to promote the kind of business environment that really will promote further investment in this region from everybody, not just Japan but from American companies, European companies, and for that matter Russian companies and Chinese companies.

A third question is: can Japan sustain the kind of bilateral relationships with Russia and China that I think will facilitate a greater Japanese role in the region?

Fourth: can Japan, working with the United States, the European Union, and the international financial institutions, try to create the more robust coordination mechanisms that I think would be reflected in something like a “CAREC Plus 3”?

And finally, building on Foreign Minister Aso’s talk about values-based diplomacy, what role are values, political reform, democratic reform, good governance, the rule of law, open institutions, going to play in Japanese diplomacy toward this part of the world? Is it something that is a natural area for the United States and Japan to not just have a dialogue on, but to be pursuing, if not a joint agenda, at least a complementary agenda?

So I’ll just conclude by saying that for our part, in the U.S. Government, we are excited about the prospects for U.S.-Japan coordination and cooperation in the region. It does not mean we have to do things jointly. It just means we hope to do things in a complementary way. And that is true of all of our partnerships whether they are with Beijing or Moscow or Ankara or with Brussels. So thanks for having me, and I'm looking forward to the discussion.