«14 CSR White Paper Economy ESG Investing as an e Unchanging Face of Japanese Antidote to Myopic Employment Management International A airs Japanese ...»
Japan has a keen interest in economic cooperation with Russia, including in the energy sector, which could make a positive contribution to the development of Russia’s Far East, Eastern Siberia, and the Arctic Ocean. Some economic cooperation projects have been stalled due to the economic sanctions imposed after the Ukraine crisis and the sharp drop in oil prices since last November. Still, we have seen positive developments in the agriculture and medical sectors, even after the crisis. I am confident that investment and business will recover gradually, as neither the West nor Russia want the relationships to deteriorate any further, as long as at least the ceasefire part of the Minsk-2 agreement holds. The United States, I am sure, is not interested in starting a new Cold War.
Japan’s official attitude toward Russia has remained largely unchanged since the crisis, although the country was forced to make a politically difficult choice between its desire to promote Japan-Russia relations and to maintain solidarity with the G7 by taking a tough stance against Russia.
The dialogue between the Tokyo Foundation and the Russian International Affairs Council were held as scheduled last autumn, even when our bilateral relations soured following the Ukrainian crisis, and we publicly issued a joint statement to promote friendly ties. Communication and exchange at the unofficial level are therefore continuing as before. This suggests that Track 2 dialogue may become more important under the current political situation.
Reprinted with permission from the website of the Valdai Discussion Club.
September 24, 2015 The Politics behind Russia’s Support for Syria Paul J. Saunders Russia’s heightened military support to Syria has raised questions about Moscow’s intentions and whether it will help or thwart efforts to fight the Islamic State. The consequences, notes Paul Saunders, will depend on whether or not Washington and Moscow can find a mutually satisfactory way forward in the war-torn country.
* * * R ussia’s dramatic recent increases in military support to Syria have produced considerable uncertainty regarding Moscow’s intentions. Will Russian forces engage directly in combat against the so-called Islamic State?
Could Russia’s help allow the Syrian military to intensify attacks on “moderate” opposition groups? Or could it lead to accidental confrontation between Russian and American military personnel? And what will Moscow do next?
Moscow faces very substantial constraints, though, that are likely to impose important limits on its conduct. Russia’s actions will probably be much more consequential politically than militarily.
Mutually Reinforcing Objectives
President Vladimir Putin’s decision to send aircraft, armored vehicles, and naval infantry to Syria—and, apparently, to build at least one new base there—is likely the result of several mutually reinforcing objectives. Militarily, Russia seeks to avoid a victory for the Islamic State that would allow the extremist group to consolidate control over Syria’s territory and, no less important, that would release over 2,000 experienced and dangerous Chechen fighters from combat for potential return to Russia.
Unlike the United States and many of its allies in the region, Russia does not Paul J. Saunders Executive Director, Center for the National Interest (Washington, DC).
see the moderate Syrian opposition as a viable force that could counterbalance and eventually defeat Islamic State fighters. Since no one else (including the United States) is willing to provide a major ground force, and air strikes alone cannot defeat the Islamic State, Russian officials see Syrian President Bashar al-Assad’s army as an essential partner.
Politically, Russia’s leaders have sent several messages simultaneously. To the United States and its allies, Moscow is arguing for a significant role in any international coalition against the Islamic State and in any political process to establish peace. More narrowly, the moves looked calculated to force open military-to-military dialogue with Washington, suspended after Russia’s seizure of Crimea, in order to avoid accidents or miscalculations.
This has already partially succeeded in producing a telephone conversation between Secretary of Defense Ashton Carter and Defense Minister Sergey Shoigu.
What remains unknown is whether President Barack Obama will agree to meet Mr.
Putin during his visit to the UN General Assembly on September 28.
At the same time, Russia’s actions demonstrate to Bashar al-Assad and Syria’s generals that Moscow is committed, at least to some degree, to preventing their defeat. This gives Syria’s leaders a greater stake in their relations with Moscow. It could also help to reassure Mr. Assad and others of Russia’s intent in any international negotiations—something required to win the Syrian government’s support for any deal.
Still, despite its military deployments, Russia lacks the capability to deploy, or to sustain, a large enough number of its own troops to make a difference in Syria’s bloody civil war. Russia’s “naval base” in Tartus, Syria, cannot accommodate large ships and is primarily a repair and resupply facility.
Though Moscow recently negotiated naval access to Cyprus, this is not sufficient either—soldiers and supplies would still have to travel by ship or by air to Syria. Supporting a meaningful force in Syria by air would be extremely expensive and logistically quite demanding. Taking into account the number of portable surface-to-air missiles in Syria, it could also be quite risky for Russian cargo pilots.
Russia faces similar political constraints. Most important, Russian public opinion remains deeply scarred by the Soviet war in Afghanistan and Russia’s two wars in Chechnya. Not unlike the American experiences in Vietnam and Iraq, these bloody conflicts—a defeat in Afghanistan and at best inconclusive in Chechnya— have produced a profound reluctance to fight in far-off lands. If Islamic State forces
110 InternatIonal affaIrs
were to capture and publicly execute one or more Russian soldiers, as they have already done to others, President Putin could face an angry public with few credible policy responses.
The most important question following Russia’s sudden escalation in Syria is whether it may advance—or set back—wider efforts to thwart the Islamic State and reestablish stability. The answer to this will depend heavily on whether or not Washington and Moscow can find a mutually satisfactory way forward in Syria that facilitates not only their cooperation but also a new international coalition.
So far, the biggest obstacle to such an understanding is the long-standing US-Russian disagreement about President Assad. Washington views Assad’s behavior as a recruiting poster for the Islamic State, while Moscow considers his leadership necessary to preserving a unified Syrian state that can continue to fight the ground war. And, of course, President Obama has insisted that Assad must agree to step down as a pre-condition for talks. Moscow rejects this approach.
Some in Washington sound increasingly prepared to contain their distaste for Mr. Assad—and, for that matter, for Mr. Putin—at least for a time. Neither decision would be an easy one for the Obama administration, however, particularly as the 2016 electoral campaign heats up. Look to the White House for the next move.
July 22, 2015 The AIIB and Japan’s Development Assistance Hiroyuki Kato Tokyo’s decision not to join the AIIB may have been made in deference to Washington’s wishes, but given its distinguished record of assistance to developing countries, notes Hiroyuki Kato of Kobe University, Japan should pursue its own strategies for how it works with the bank to promote infrastructure investment in developing countries.
* * * A fter considerable debate, the Japanese government chose not to become a founding member of the Asian Infrastructure Investment Bank. Opinions differ, though, over the stance Japan should take in the future: Should Japan continue to keep its distance from the AIIB, or should it join the China-led bank as a regular member and exert influence from inside? Arguments pro and con are likely to be advanced for some time.
The AIIB is a new multilateral development bank that China is establishing with the aim of satisfying the huge demand for infrastructure investment in Asia— demand that, as estimated by the Asian Development Bank, will reach $730 billion through 2020. Fifty-seven countries signed up as founding members by the March 31, 2015, deadline, with China expected to provide a considerable share of the bank’s $100 billion initial subscribed capital. In addition to developing countries, a number of developed countries, such as Britain and Germany, scrambled to join at the last minute. What were they hoping to gain? What is China seeking to achieve from this initiative? And how should Japan respond? Below, I will approach these questions from the perspective of how Japan should provide assistance to developing countries.
A Variety of Agendas The response of other states to the AIIB varies according to their aid recipient/ Hiroyuki Kato Professor of Economics, Kobe University.
donor status and how close they feel to China and to the United States. For developing Asian countries with immense appetites for infrastructure investment, nothing could be more welcome than the arrival of the AIIB as a new lender alongside the World Bank and the ADB. Competition between the new bank and the older ones can mean more relaxed conditions for loans.
For such Group of Seven countries as Britain and Germany, the decision to join the AIIB despite pressure from Washington to stay out can be attributed to a number of factors: For one thing, the amount of capital required from non-Asian members is modest. Membership is seen as offering improved access to the fast-growing Asian economies for the participating countries’ businesses. And their governments may be feeling strongly distrustful of the existing US-centered international financial order. For the United States, meanwhile, the establishment of the AIIB under Chinese leadership looks like a major challenge. Washington did its best to keep other countries from joining, but its efforts fell short. The decisions by other G7 countries and South Korea—which depends heavily on the United States—to seek membership in the new institution highlighted the decline of America’s influence in the international community. Some have even argued that it is a harbinger of change from a US-dominated world order to a multipolar structure.
The country that finds itself in the most awkward position vis-à-vis the AIIB is Japan. Our country achieved economic growth in the postwar era thanks to the US-centered international financial order. This order has survived a number of crises over the decades—notably, the Nixon shock of 1971, the Asian currency crisis of 1997, and the global financial crisis following the bankruptcy of Lehman Brothers in 2008. Each time, Tokyo stood by Washington’s side. In geopolitical terms and also in terms of its track record as a provider of development assistance, Japan could naturally have taken a leading role in the AIIB. The biggest reason for its decision not to become a founding member was its unchanging adherence to a policy of staying in step with the United States. And even if Beijing had promised Tokyo the number-two spot in the new bank, there would probably have been some resistance to the idea of playing second fiddle to China.
China’s Emergence as an Aid Donor
The move to establish the AIIB sheds some light on China itself, a country that has been sustaining rapid economic growth and is emerging as a superpower. The leaders in Beijing are aiming for more moderate economic expansion given the deceleration in the growth rate, expected to be around 7% this year. There has not yet been a fundamental change in China’s structure of excess capital accumulation—a
113 Views on China
chronic consumption shortage offset by excess investment (Marukawa and Kajitani 2015). Meanwhile, as a result of the export-promotion policies China has been implementing for many years, it has been running large current account surpluses with the United States, and these have caused global imbalances that adversely affect the stability of the world economy. China’s foreign reserves have grown to $3.8 trillion, and if it hopes to keep the yuan-dollar exchange rate steady, it needs to “recycle” more of this foreign currency. This means using it outside of China in such forms as official development assistance and direct investment. Recycling the funds in this way will also stimulate other countries’ economies, generating additional demand that can help absorb China’s excess production capacity.
Since around 2004, Beijing has been encouraging Chinese enterprises to invest abroad. The volume of China’s outward direct investment is now on the same order as that of industrially advanced countries like the United States and Japan, and within the next few years it is expected to exceed the volume of inward direct investment. In July 2014, the five BRICS countries (Brazil, Russia, India, China, and South Africa) agreed to establish their own development bank and foreign currency reserve pool. The establishment of the AIIB may be seen as an extension of these earlier moves.