Japan’s Caucasus Initiative

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JAPANESE AMBASSADOR IN BAKU, MR. TERUYUKI KATORI, IN AN EXCLUSIVE INTERVIEW WITH AZERI OBSERVER SPEAKS ON THE NEW JAPANESE EMPEROR, GOOD PROSPECTS FOR DEVELOPING TIES WITH AZERBAIJAN IN TOURISM, AGRICULTURE AND TECHNOLOGIES, AND THE BILATERAL AGREEMENT WHICH WILL CONTRIBUTE TO THE ENHANCEMENT OF ECONOMIC RELATIONS AND INVESTMENT COOPERATION. HE ALSO PROVIDES DETAILS ON FUTURE HIGH-LEVEL MEETINGS, OPPORTUNITIES FOR AZERBAIJANI BUSINESS IN JAPAN AND MENTIONS MUST-VISIT JAPANESE RESTAURANTS IN BAKU.

BY GEMMA BIANCHI SLATER

AZERI OBSERVER EDITOR

Question: Could you briefly tell our readers about the current state of relations between our countries?

Answer: Japan established diplomatic relations with Azerbaijan as soon as Azerbaijan gained its independence in 1991, and despite being 7,500 kilometers apart, we have successfully developed friendly relations. There are no political or historical disputes between the two countries and both Japanese and Azeri people see each other positively. As a Japanese diplomat I am very glad to have a chance to live and work in the friendly and positive atmosphere of Baku, and all the regions that I visit. I am also impressed to see Azerbaijan continually strengthen its presence in the international community, under the leadership of President Ilham Aliyev. One episode that I think illustrates the deep ties between our countries is the Japanese exhibition held last year by the Azerbaijan National Museum of Arts. Some of these works date back several centuries, while some are from the modern era. This collection illustrates the continuous cultural exchange between the two countries, even before the establishment of modern Azerbaijan. We are deeply grateful to the museum.

Economic and technical cooperation, supported by Japanese expertise and knowledge, is one of the pillars of Japan’s efforts to develop friendly relations with Azerbaijan since its independence. For example, technological cooperation and training in the fields of infrastructure, human resources, industry, and institution building, as well as small-scale, flexible grant assistance for the development of the regions outside of Baku. For years now we have supported exchanges of people from dignitaries to the Azeri youth, welcoming exchange students for training in various fields. We know that in the future those students will be the ones who carry the relationship forward, between our two countries.

President Ilham Aliyev visited Japan in 2006, and through numerous meeting and visits with His Majesty the Emperor and then-Prime Minister Koizumi, deepened relations between our two countries. We also strengthened ties when Minister of Foreign Affairs, Taro Kono visited Baku in September last year. He met with President Ilham Aliyev, Prime Minister Novruz Mammadov, and Foreign Minister Elmar Mammadyarov. Based on the Caucasus Initiative outlined in Minister Kono’s speech, I strongly believe we will see further development of the relations between Japan and Azerbaijan, together within the Caucasus region. 

Q.: What are the main items of reciprocal trade between our countries? How does the volume of trade change year over year?

A.: Currently, Japan exports iron, steel, automobiles, rubber tyres and tubing to Azerbaijan. Azerbaijan’s major exports to Japan are non-ferrous metals such as aluminum and agricultural products such as wine, honey, and licorice, which is a main ingredient in Chinese herbal medicine. In the last few years, annual trading volume between the two countries has remained stable, between roughly $70 million and $100 million. Currently, more than half of the figures shown above are from Japanese exports (exports in 2018 were around $55 million and imports were approximately $7.9 million.) In the future, the scale of those economic relations and investment will increase, given the agreement to begin formal negotiations during Minister Kono’s visit and the activation of the Japan – Azerbaijan Joint Economic Committee. Furthermore, Japanese companies including ITOCHU and INPEX are participating in the development of Azeri-Chirag-Gunashli oil and gas fields and Baku-Tbilisi-Ceyhan pipeline. In that sense, Japan is contributing to Azerbaijan’s position as an oil exporter.

Q.: How can Azerbaijan and Japan further develop our economic and trade relations?

A.: Recently, Japanese small businesses have shown interest in exporting Japanese foodstuffs to Azerbaijan and there are several Japanese restaurants such as Seto, Katsu (a new restaurant) and Yui – all of which you visit! However, this exchange does not have to be one way. I believe that Azerbaijani agricultural products could be exported to the Japanese market as well. As I mentioned before, Azerbaijan currently imports more than it exports to Japan, so I would encourage Azerbaijan’s government and companies to conduct research on the Japanese market and consumers.  With the support of the Japan External Trade Organization (JETRO) and others from the Japanese side, we can implement ambitious marketing strategies. I think that tourism is another area where we could see further development of our union. Japanese tourists love to learn about different cultures and historical sites, so Azerbaijan is a compelling destination for them.

Recently, Japanese nationals became eligible to obtain a visa on arrival at the airport. Despite the fact that the total number of Japanese tourists is relatively low (the approximate number of the passengers in 2018 was 5,000), it is still, however, an upward trend. Many Japanese tourists visit neighboring Turkey, and in my opinion, developing new tour packages that include Turkey, Georgia and other nearby countries in the region would be effective for attracting more Japanese tourists to Azerbaijan. In addition, it is important to further improve tourism infrastructure and quality of service; as well as the availability of direct passenger flights (again, like they have for Turkey), which is currently under discussion.

Q.: Japan has a very competitive market. What should Azerbaijani business know about the Japanese market?

A.: If Azerbaijani companies would like to expand to Japan, the first step would be to conduct a preliminary survey of the Japanese market to have a clear vision about the products Japanese consumers want, and the quality they demand. For example, Azerbaijan’s fresh fruits and vegetables are incredibly delicious. There are products that Azerbaijan has, that cannot be found in Japan. I recommend anyone considering the Japanese market to choose products strategically and refine their strategy. If I can speak more about agricultural products, Japanese consumers demand very high quality for such products. If damaged or infested products are included, the products become unsellable. Pests, disease, the strictness of plant quarantine and freshness, are some of the challenges that Azerbaijani businesses would have to consider, for example, the processing and appropriate quality control methods. Japanese consumers have an experienced eye, and if the goods are of high quality, they will pay a fair price. Azerbaijan has potential. It is up to the Azerbaijani people to take the advantage of it.

Q.: Tell us about investment cooperation between our countries.

A.: Over the course of 26 years, Japan has invested a total of roughly $7 billion in Azerbaijan, which ranks relatively high compared to the investment of other foreign nations. Most of that investment is in the oil and gas industry. As I mentioned before, during the official visit of Foreign Minister, Taro Kono, last September, we agreed to start official talks towards a bilateral investment agreement. This could assist Japanese companies to penetrate into new sectors, therefore is important to also generate attractive investment opportunities for the Azerbaijan side; to create fair rulesin compliance with international principles to improve the investment atmosphere and ensure transparency. Regarding the intergovernmental yen loan projects, the following projects have been completed: Severnaya1 Gas Combined Cycle Power Plant Project (1998, approximately $193 million), Phase 2 (1999, approximately $153 million), 2nd Shimal Gas Combined Cycle Power Plant Project (2005, approximately $274 million), and the Provincial Cities Water Supply and Sewerage Project(2009, approximately $291 million).

In addition, though it is on a much smaller scale, Japan has implemented grassroots grant aid throughout Azerbaijan. The main purpose of these grants is the economic and social development of developing countries. The project supplies smaller scale grants, for the direct benefit of local residents to be realized through local NGOs or local public agencies. A total of 248 projects, equaling almost $21 million, has already been implemented in Azerbaijan from 2000 till 2018. The grants have helped to support education, school repairs and the construction of health clinics in villages to ensure they have safe drinking water. Those areas account for almost one-third of the total. I believe that there is potential for even more varied technical cooperation from our side, especially the training of specialist personnel.  In agriculture and manufacturing, it is the quality of the workers on site who determine the success of the industry. Japan has many vocational secondary schools specialized in fields, such as agriculture and industry. The young people educated there are holding up our industry in Japan. The Japan International Cooperation Agency (JICA) accepts around 20 trainees from Azerbaijan every year. Trainees come from a wide variety of areas: urban transportation, maternal and child health, renewable energy, road construction, water and sewage management, small-and medium-sized companies, customs operations, and oil development. They will contribute to the nation building of Azerbaijan in the future, using the knowledge they gain in Japan, which will also lead to the reinforcement of friendship between our two countries.

Q.: As you mentioned, Japanese INPEX and ITOCHU are among the shareholders of the Azerbaijani oil and gas block, Azeri-Chirag-Gunashli. What are the expectations of Japanese companies from the next stage of development of this Contract Area (Azeri Central East Project)?

A.: There are already strong ties between Japan and Azerbaijan in the energy sector. That includes ITOCHU and INPEX’s participation in the development of Azeri-Chirag-Gunashli (ACG) block of oil and gas fields. In September 2017, the agreement to extend the ACG Production Sharing Agreement (PSA) “the Contract of the Century” until 2050, was signed. ACG oil fields are important for our country from the viewpoint of diversifying our resource supply.  There is no constant oil export to Japan, so in case of tight supply, partial export is allowed. As an embassy, it is our sincere desire to continue to assist Japanese companies in cooperating with the government of Azerbaijan in this area.

Q.: Azerbaijan pays great attention to diversification of economy and development of the non-oil sector. What non-oil industries are promising for bilateral cooperation?

A.: I think that tourism, which I already mentioned, is a significant one. Jun Takashina, Vice Commissioner of the Japan Tourism Agency, participated in the recent meeting of the UNWTO in Baku, and had the opportunity to discuss mutual tourism development with the Minister of Ecology and Natural Resources, Mr. Mukhtar Babayev and the Chairman of the State Tourism Agency of Azerbaijan Mr. Fuad Naghiyev. The Minister gave an interesting introduction on the historical heritage and national resources reserves. As the minister is also a co-chairman of Japan-Azerbaijan Joint Economic Committee, he will be attending the meeting in Japan planned for November. He mentioned the need to promote Azerbaijan in Japan, through the media. Beyond tourism, I think that some of Japan’s more advanced technological expertise might also be an area ripe for cooperation. Those include selective breeding and cultivation in agriculture and fishing. Taking the advantage of the joint economic committee and broadening our view to other areas, we can find areas for synergy, based on the strengths and demands of both sides and deepen cooperation through JICA trainings or study programs. INPEX and SOCAR hold training programs for young engineers of SOCAR in Japan every year. These kinds of initiatives give me hope for the development, of both public and private multilateral cooperation. 

Q.: Japan has vast experience in renewable energy projects. Could this experience be applied in Azerbaijan?

A.: Japan is a country with no energy resources, and thus relies mostly on foreign imports. The Great East Japan Earthquake in 2011, when Japan experienced significant power shortages was a wake up call for us. We have since introduced renewable energy to improve our self-sufficiency, and the Japanese government aims to increase the proportion of renewable energy; for example, sunlight, wind power and biomass, in the total energy supply to nearly a quarter in 2030, up from 16% now. Recently, solar power adaption is increasing in Japan and with it, Japanese companies’ expertise in such areas, such as creating excess power solar systems. Those technologies could all be beneficial to Azerbaijan.

Q.: Does Azerbaijan and Japan hold any negotiation to facilitate visa regime?

A.: As a result of long negotiations, we started mutual visa waiver measures for diplomatic passport holders in 2017 and eased short-term visa requirements for ordinary Azerbaijani passport holders. The number of visa applications by Azerbaijani citizens to Japan continues to rise; possibly as a result of these measures. The Azerbaijani side has also implemented free visa on arrival, for Japanese citizens. The number of Japanese tourists is on the rise, as I mentioned before. The fact that Azerbaijan has introduced such facilities, shows that in some aspects, Azerbaijan is ahead of Japan in some ways.

Q.: Are there further bilateral meetings planned, to intensify cooperation between our countries?

A.: We invited the Minister of Taxes, Mr. Mikayil Jabbarov, to Japan in March of this year. The minister inspected Japan’s infrastructure, innovative agricultural facilities, met with Japanese political and economic officials, and developed a good understanding about our country. Officials from around the world are expected to participate at the Enthronement ceremony, to be held in Tokyo in October.  We can see high-level participation from Azerbaijan at that event. As mentioned before, Minister of Ecology and Natural Resources, Mr. Mukhtar Babayev, is expected to participate in the meeting of the Japan Azerbaijan Joint Economic Committee to be held in Tokyo this autumn. Minister Babayev has been visiting Japan frequently since the time he became the head of the Azerbaijan-Japan Working Group on Inter-parliamentary Relations, and made a significant contribution to the bilateral relations.

Q.: You mentioned the Enthronement ceremony for the Emperor. Could you please tell us more about this occasion and the Emperor of Japan?

A.: On April 30, 2019, after serving as the emperor for 30 years, His Majesty the Emperor Akihito abdicated, and on May 1, the following day, The Ceremony for Inheriting the Imperial Regalia and Seals took place, in which the new Emperor inherited the Imperial Regalia and the State and Privy Seals upon His accession to the throne as the 126th Emperor. The imperial family is said to be the world’s longest continuous hereditary monarchy. According to Japan’s oldest history book, Nippon Shoki (The Chronicles of Japan), the imperial family’s origins date back more than 2,600 years. Even if we count only from the oldest emperor confirmed in official archives from ancient China, that history is still 1,600 years old. According to the current Constitution of Japan enacted in 1947, the Emperor is the symbol of the State and of the unity of the people of Japan. Emperor Naruhito was born on February 23, 1960. His Majesty has long researched the history of transportation in the Medieval Ages in Japan, and studied the history of water transport on the River Thames at Oxford University.

Emperor Naruhito loves sports and music, especially mountain climbing, jogging, tennis and playing the Viola. He has climbed more than 120 mountains, including Mt. Fuji in Japan, and has contributed several essays to famous mountaineering magazines in Japan. Her Majesty the Empress Masako, lived abroad from an early age with her diplomat father. After graduating from Harvard University, she also chose to become a diplomat and served in our foreign ministry for about six years, before she became engaged to Emperor Naruhito. Her Majesty Masako is a commoner, just like Her Majesty the Empress Emerita Michiko. Later in the year on October 22, the new Emperor will proclaim His enthronement at the Ceremony of the Enthronement and receive felicitations from representatives from both Japan and abroad. This will be followed by the Imperial Procession Following the Ceremony of the Enthronement in which His Majesty the Emperor, travels by convertible from the Imperial Palace to His residence and receives congratulations from the general public along the way.

Finally, I would like to share a part of His Majesty the Emperor Naruhito’s first public address on his Enthronement Day. “In acceding to the Throne, I swear that I will reflect deeply on the course followed by His Majesty the Emperor Emeritus and bear in mind the path trodden by past Emperors, and will devote myself to self-improvement. I also swear that I will act according to the Constitution and fulfill my responsibility as the symbol of the State and of the unity of the people of Japan, while always turning my thoughts to the people and standing with them. I sincerely pray for the happiness of the people and the further development of the nation as well as the peace of the world.”

Q.: Could you tell us about cultural and humanitarian links and projects between our countries?

A: Every year the Japanese government sponsors several Azerbaijani students from different fields to study at Japanese universities; recently, three masters-level research students and Japanese studies students. In addition, each year we bring groups of brilliant youths from different walks of life – including from Azerbaijan – to Japan, to create a space for human and intellectual exchange. In Azerbaijan, there are Japanese language faculties at Baku State University and Azerbaijan University of Languages, that are cultivating top-class researchers on Japan.  Amongst them, there are a considerable number of Japanese culture and language lovers. In Japan, there is also considerable number of people interested in Azerbaijan, involved in research and exchanges. Many also contribute to ties between our countries through business. Exchange through tourism also shows signs of development.

Speaking about high-level relations, former Deputy Prime Minister, Abid Sharifov, has served as chairman of the Economic Joint Committee for many years. His countless visits to Japan have made a significant contribution to bilateral relations. There are also pro-Japanese leaders in the next generation of politicians including Minister Mukhtar Babayev and Minister Mikayil Jabbarov. In Japan, we have the Japan-Azerbaijan Inter-Parliamentary Friendship League, chaired by Akira Amari, member of the House of the Representatives, which boasts many influential members. This group has effective relations with the League in Azerbaijan. Through such exchanges, we have seen understanding and cooperation steadily growing between our countries, and I think we will see even more development through the expansion of exchange opportunities. This is one of the main issues we will address, as an embassy in line with the Caucasus Initiative.

Q.: You have lived in Azerbaijan for more than 2 years and have had time to get to know the country and its people. What are the biggest cultural differences between Azerbaijan and Japan? What are the similarities? What has impressed you most about the culture, history and people of Azerbaijan?

A.: Japan and Azerbaijan share many things culturally, given the fact that from ancient times they were linked through the exchange of goods and ideas along the Silk Road. Their languages are both part of the Altaic languages and have a similar grammatical structure. I feel that our countries share many values. We both place a lot of importance on familial and communal ties, as well as having respect for older people. We even live in similar ways, in that both Azerbaijanis and Japanese take off their shoes in the house. Yet there are also differences. Japan is an island nation and a relatively homogenous society. Even though Japanese culture shares roots with East Asian cultures such as China and Korea, Japan shaped a unique and independent culture over a long period. On the other hand, Azerbaijan shares land borders with other countries. From ancient times, it has been a “crossroads for culture” where diverse cultures mixed, and came together to form a culture rich in diversity, in an extremely open society. You can see the influence of Ancient Persian culture, Turkish culture, Islamic traditions, Jewish traditions as well as Western traditions.