Monthly Archives: July 2006

China’s Allies Urge Africans to Unite Against US

Sunday, July 02, 2006 from China Confidential

While Beijing’s high-tech railroad was making its way to Tibet to further dominate that conquered country, Chinese diplomats were on hand in authoritarian Gambia as the African Union (AU) semiannual summit meeting degenerated into a hate session against the United States, Israel, the West and other “imperialist enemies” of the developing world.

The 10-member Chinese delegation arrived last Thursday for meetings with AU officials, including China’s number one agent of influence in Africa, Alpha Oumare Konare, who chairs the organization’s administrative branch, called the Commission. China’s other AU stooge, Chairman Denis Sassou Nguesso, whose full-time job is looting the oil-rich Republic of Congo, was also a willing participant in the two-day summit that saw fit to invite as honored observers the presidents of Venezuela and Iran.

Our sources in the Congolese capital Brazzaville say it was China’s idea to include the two antidemocratic hate-mongers, and that the idea was discussed in some detail when Sassou, a former Marxist who has ruled Congo for 22 of the past 27 years, met Chinese Premier Wen Jiabao during his recent African tour.

Venezuelan President Hugo Chavez was the keynote speaker at the summit’s opening ceremonies. In a speech reminiscent of the Nonaligned Movement’s Cold War-era conclaves, he called on Africa to counter “colonial meddling” and unite with Latin America against the “US hegemony.”

Citing the example of Venezuela and Bolivia, he urged Africa to seize greater control of its energy resources, described the low royalty payments made by some foreign oil companies as “robbery,” and referred to the US oil industry as “Count Dracula.”

Said Chavez: “We should march together, Africa and Latin America, brother continents with the same roots … Only together can we change the direction of the world….

“The world is threatened by the hegemony of the North American empire.”

With a glance in the direction of Iranian President Mahmoud Ahmadinejad, Chavez hailed Iran’s right to develop nuclear technology for peaceful purposes.

“”Long live Africa, long live Arabia and long live Iran in freedom and equality,” Chavez said.

The former paratrooper, who plans to visit Iran and North Korea later this month, proposed four areas of cooperation among the peoples of Africa, Latin America and the Caribbean in the spirit of China’s heavily promoted South-South strategy: joint energy projects, dubbed PetroSouth; a media venture dubbed Telesur (TeleSouth); a joint bank Banco del Sur (Bank of the South); and a University of the South.

Venezuela is the world’s fifth largest oil exporter.

Chavez also expressed solidarity with the Palestinian people “who are today being attacked”.

Picking up on that theme, Iranian President Mahmoud Ahmadinejad condemned the migration of European Jews to Israel to “displace the Palestinian people”.

Gambia, which hosted the AU summit, is a notorious human rights violator. Before the summit began, the press freedom advocacy group Reporters Without Borders urged journalists covering the meeting to remember repressive conditions faced by their Gambian colleagues, many of whom have been killed and beaten by government-sponsored gangs.


Japanese in Vietnam

It’s a bit longe, but interesting to (re)discover how Japan can do business with Vietnam,..

Japan Inc smitten by Vietnam
By Hisane Masaki TOKYO
– After a lengthy investment spree in China, many of corporate Japan’s biggest names are making inroads in one of the world’s few remaining communist states: Vietnam. Since last year, Vietnam has seen a spate of big investment projects by prominent Japanese firms such as Yamaha Motor Co and Mabuchi Motor Co, which invested US$48 million and $40 million, respectively. Nippon Sheet Glass Co’s $145 million joint-venture factory with a local firm is also under construction, as is work on Canon Inc’s new $70 million printer factory. Honda Motor Co has also announced that it will pour $60 million into a local auto factory within the next five years. Small and medium-sized Japanese firms are also flocking to Vietnam. According to some analysts, in 2000, Vietnam ranked eighth among destinations for Japanese investment. However, in 2005, Vietnam was in fourth place, just behind China, India and Thailand. For Japan’s small and medium-sized enterprises in particular, Vietnam was the second option, just after China. In 2005, Japan invested about $400 million in a record high of 97 new FDI (foreign direct investment) projects in Vietnam on an approval basis. In terms of the value of investments made that year, Japan was the third-biggest foreign investor in Vietnam after South Korea and Hong Kong. In fact, it is possible that Japan was the biggest foreign investor in Vietnam last year, because some of the investments registered as originating in Hong Kong are believed to have actually been made by Japanese-funded firms there. Furthermore, Japan is seen by Vietnam as its most effective foreign investor in terms of the percentage of promised investments that actually materialize. Japan made $6.2 billion worth of investments in Vietnam between 1988 and 2005 on an approval basis. Of that amount, about 74%, or $4.5 billion, was actually realized – by far the highest realization rate among foreign countries and regions investing in Vietnam. Going by realized investment amount only for the 1988-2005 period, Japan was the biggest foreign investor in Vietnam. The current boom of Japanese and other foreign investment in Vietnam is the second. The first one occurred in the mid-1990s after the lifting of US economic sanctions against the Southeast Asian country in 1994 and the establishment of full diplomatic ties between Washington and Hanoi the following year. Japan’s annual FDI in Vietnam peaked at $1.13 billion in 1995. ‘China plus one’The comparison of China to Vietnam is instructive. China is gobbling up about $60 billion worth of FDI annually, the largest amount of any developing country. In addition to being a lucrative market with the world’s biggest population of about 1.3 billion, China has increasingly become the world’s manufacturing center. The rapidly ascending global economic power superseded Japan as the world’s third-largest trading nation after the US and Germany in 2004. With its exports booming, China’s overall trade surplus surpassed $100 billion last year, causing friction with major trading partners such the US and Europe, although well over half of Chinese exports are produced by foreign-funded companies. China remains by far the most powerful magnet for Japanese and other foreign investors in Asia. Vietnam’s total FDI currently is roughly a tenth of China’s, at about $6 billion annually. Vietnam’s economic size and population also pale before China’s. But the Southeast Asian nation has cheaper labor. Its per capita gross domestic product (GDP) is still about $480, less than half China’s, which has already exceeded $1,000. Vietnam has become an increasingly popular investment destination for Japanese firms seeking to reduce their excessive dependence on China and spread their business risks in Asia more evenly. According to a survey conducted early this year by the Japan External Trade Organization (JETRO), Vietnam has become the first choice for those Japanese firms that are operating in China and want to shift their investment to a third country. Lying behind what some people describe as the “China plus one” attitude among Japanese investors are concerns about the risks involved in doing business in China. These concerns were fed by Beijing’s slow response to the outbreak of severe acute respiratory syndrome (SARS), and also by the anti-Japanese riots that swept through China in April 2005. More important is the currency factor, since a stronger Chinese yuan weakens the advantage exporters derive from operating in China. In the face of strong international pressure, especially from the United States, China revalued the yuan against the US dollar last July, albeit by a meager percentage. A further rise in the value of the yuan is anticipated in the medium and long terms. Also, labor costs are on the rise and shortages of power and water supplies have emerged as headaches for foreign firms with operations in China as well as for their local counterparts. With its relatively large population of about 82 million, Vietnam also has decent potential as a lucrative market in its own right. But for now, most Japanese manufacturing businesses are looking to Vietnam as a production base for exports, primarily to the rest of Asia, including Japan itself. Tailwinds for VietnamThis year marks the 20th anniversary of Vietnam’s doi moi policy of free-market reforms and external opening. Vietnam was not immune to the fallout from the Asian financial crisis that first erupted in Thailand in the summer of 1997 and quickly swept through the region. Because of a sharp decline in foreign investment from its neighbors and a slump in exports to them, Vietnam’s economic growth slowed to 5.8% in 1998 and 4.9% in 1999, after posting growth of between 8% and 9% for the preceding several years. But the slowdown is now a thing of the past, with the Vietnamese economy fully recovered and on a solid growth track. In fact, Vietnam has been one of Asia’s fastest-growing economies in recent years. The Asian Development Bank predicts that the country’s economy, buoyed by brisk foreign investment and firm domestic demand, will grow 7.8% this year and 8% next year. Tailwinds are blowing for Vietnam – and for Japanese and other foreign investors there. Japanese firms’ investment spree in Vietnam comes amid an increasing number of free-trade agreements (FTAs) being concluded or negotiated in East Asia. Until several years ago, the ASEAN Free Trade Agreement (AFTA) was the only such trade arrangement in East Asia, but one after another FTA has since popped up in the region. To take advantage of the FTAs, Japanese manufacturers in the Association of Southeast Asian Nations member states are stepping up the realignment of their production networks in the region by moving production bases from one ASEAN country to another, as well as from China to ASEAN. The investment pact between Japan and Vietnam took effect in late 2004. Japan and Vietnam are also to open FTA negotiations late this year; Japan is separately negotiating an FTA with the ASEAN as a whole. In another significant recent development, Vietnam and the US signed a trade pact at the end of May, paving the way for Hanoi to realize its long-cherished goal of becoming a member of the World Trade Organization late this year. WTO membership, which obliges Vietnam to open its markets wider to foreign competition and make its trade and investment rules and regulations fully compatible with international norms, is expected to fuel Japanese and other foreign investment further in the country. China gained WTO membership almost simultaneously with its hosting of the Asia-Pacific Economic Cooperation summit in late 2001. Although it may be just a coincidence, Vietnam will host this year’s summit of leaders from 21 APEC member economies in November, further highlighting its higher profile in the regional economic arena. US President George W Bush is expected to attend the political extravaganza. Pump-priming effectsIn 1992, a year after the warring factions in Cambodia signed a peace agreement in Paris to end years of deadly civil war, Japan became the first major industrialized country to resume full-scale economic aid for Vietnam. Japan has been Vietnam’s top aid donor since 1995. Japanese official development assistance (ODA) for Vietnam totals nearly 100 billion yen ($869.5 million) annually. Vietnam is now one of the largest recipients of Japanese ODA money. Vietnam is also a potential important supplier of oil and natural gas for energy-resource-poor Japan. Vietnam is the second-largest after Indonesia among the ASEAN members in terms of population and also has geopolitical importance because it borders China. Vietnam joined ASEAN in 1995, followed by Laos and Myanmar in 1997 and then Cambodia in 1999. The four countries on the Indochina peninsula are the least developed of the 10 ASEAN members. For ASEAN, correcting the so-called “ASEAN divide” – the huge gap in wealth between rich and poor members – is a high priority as the grouping accelerates its economic integration with an ultimate goal of creating a fully integrated “ASEAN Economic Community” by 2020. For countries outside ASEAN, such as Japan and China, assistance in the development of the poorer ASEAN nations is becoming a very important avenue to strengthened ties with ASEAN as a whole – and greater political clout in the region. The bulk of Japanese ODA money for Vietnam has been provided in the form of soft loans to finance infrastructure projects, and the rest in the form of grants-in-aid and technical cooperation. Japan has also implemented a “comprehensive policy-assistance project” as part of its technical cooperation for Vietnam, which is aimed at helping Vietnam switch to a free-market economy from communist-style central planning by means of a joint study on Hanoi’s economic development policies by experts from both sides. It marked the first full-scale “intellectual assistance” project to be implemented by Japan for a developing country as part of its ODA. Early this year, the two countries extended the two-year joint action program launched by their leaders in 2003 to improve Vietnam’s business environment, strengthen its economic competitiveness and accelerate the inflow of FDI. At a workshop held in March to review the joint initiative, Hanoi officials highly valued the joint program, saying it had enhanced FDI in Vietnam. This program, along with the 2004 investment pact, has contributed to increased Japanese confidence in Vietnam and thereby to a sharp surge in Japanese investment there. Of course, there remain many negatives associated with operating in Vietnam. Existing and potential foreign investors have criticized the country for its poor infrastructure, excessive bureaucracy, a dearth of skilled workers, underdeveloped support industries and widespread corruption. In a recent seminar on Vietnam investment held in Tokyo, Vietnamese Planning and Investment Minister Vo Hong Phuc pledged to improve his country’s investment climate constantly to attract more foreign investment, particularly from Japan. Attractive manufacturing baseThe Japanese firms doing business in Vietnam include such giants as Toyota Motor, Sony, Canon and Honda. Many Japanese firms have made forays into Vietnam or have boosted investment there in recent months. In one of the highest-profile Japanese investments lately, Canon began construction of its second inkjet-printer factory in Vietnam, at Tien Son Industrial Zone in the northern province of Bac Ninh. The factory, with an investment capital of $70 million, is to come online next April. It will turn out 700,000 printers per month, all of which will be exported. Canon plans to funnel an additional investment of $40 million into the factory. Canon’s first inkjet-printer factory in the country is in Hanoi’s Thang Long Industrial Zone. The group also owns a laser-printer plant in Bac Ninh province’s Que Vo Industrial Zone that became operational last year. Among other investments by big Japanese firms, Nippon Sheet Glass Co’s $145 million joint-venture sheet-glass factory with a local firm, now under construction in the southern province of Ba Ria-Vung Tau, will go online this autumn. Honda Vietnam (HVN) recently announced plans to pour $60 million into an auto factory within the next five years. Over the past 10 years, HVN has invested nearly $194 million in the production of motorbikes of various models and has been a pioneer of the motorbike-manufacturing sector in Vietnam. Suzuki Motor’s new $20 million motorcycle plant opened early this year in the southern province of Dong Nai. Among smaller firms, Nidec Corp started production at its new fan-motor factory in Saigon High-Tech Park on June 1. The factory is run by Nidec’s newly established, wholly owned subsidiary with a paid-in capital of $11 million. Kokuyo Co plans to establish a plant at the Nomura-Haiphong industrial complex in the northern city of Haiphong in August to produce, for the time being, stationery and paper products for exports to Japan. Tokyo Seiko Co is building a $90 million factory in the Vietnam-Singapore Industrial Park in the southern province of Binh Duong to manufacture steel-wire cable. A $3 million printing-ink factory of Dainipon Ink and Chemicals Inc went on stream at the same industrial park in March. Mitsuwa Electric Industry Co is constructing a plant at Que Vo Industrial Zone in the northern province of Bac Ninh to produce plastic products and paint. That plant is expected to be put into operation in October. Sumitomo Electric Industries Ltd (SEI) was licensed recently to establish a company to produce electric wire for cars in the northern province of Hai Duong. Sumiden Vietnam Automotive Wire, which will have an investment capital of $100 million, is SEI’s 11th automotive-wire company overseas. SEI has set a target of making Vietnam the largest automotive-wire producer in Southeast Asia. Kaneka Group began construction of a $2 million high-grade medical-equipment factory at Binh Duong’s Vietnam-Singapore Industrial Park recently. Garment manufacturer UNIQLO Co reportedly will reduce its production in China to less than 70% of the total, from more than 90% currently, by 2009. UNIQLO reportedly will boost the percentage of Southeast Asian output to more than 30% by starting production in Vietnam and Cambodia. Pentax Corp will establish a new plant in Hanoi by October to boost production of camera lenses. Terumo Corp recently announced plans to build a medical-equipment production plant in Vietnam at a cost of about $24 million. That plant, the firm’s fourth outside Japan, is to be put into operation around the middle of fiscal 2007. Yokohama Rubber Co plans to put into operation a new $9 million tire plant for trucks and two-wheeled vehicles in Vietnam next June. Nakashima Propeller Co plans to open its first overseas production base in Vietnam next February. Its wholly owned subsidiary to run the $6 million propeller factory in Haiphong was set up recently. Yakult Honsha Co announced recently that it will set up a joint venture in the southern province of Binh Duong with Danone Group of France to produce and sell lactic-acid-bacteria beverages (previously, Yakult products, being imported, have been very expensive in Vietnam). Danone Group is the biggest shareholder of Yakult, with a 20% stake. The joint venture in Vietnam will be the two firms’ second overseas after one in India. EXEDY Corp will set up a joint venture firm with a Taiwanese maker in Vietnam to produce and sell clutches for two-wheeled vehicles. The joint venture will build a $1.1 million assembly line in Hanoi. And jewelry seller Sadamatsu Co announced recently that it will build its first factory – both at home and abroad – in Vietnam at a cost of between 10 million and 20 million yen primarily to manufacture rings. High-tech industry links burgeoningEarly this year, computer-chip leader Intel Corp announced it would build a $300 million factory at Saigon High-Tech Park. The plant, now under construction, will initially employ 1,200 people. It is believed to be the biggest investment yet by a US company in Vietnam. Microsoft chairman Bill Gates visited Vietnam in April. After meeting the country’s top leaders, Gates received a star’s welcome at the Hanoi University of Technology from about 7,000 students. Gates’ visit came less than a year after he signed agreements to provide training for computer-technology teachers and support Vietnam’s technology sector. These highly publicized developments involving the two US high-tech giants have raised Vietnam’s profile as a promising high-tech business location. Meanwhile, Vietnam is rapidly emerging as one of the top choices for Japanese information-technology (IT) businesses in software outsourcing, after India and China, some experts say. At present, there are some 600 software-related firms in Vietnam, mostly in Hanoi and Ho Chi Minh City. The Vietnam Software Association forecasts Vietnam’s export of software products to Japan could reach about $350 million by 2010. To attain that figure, the country needs more than 14,500 IT engineers, they say. In June 2004, the governments of Japan and Vietnam signed an IT-cooperation agreement for Tokyo to help organize IT training courses conducted in Japanese at Vietnamese universities and enterprises and also to provide experts and equipment to Vietnam. Among other cooperation projects between Japan and Vietnam, the first Vietnam-Japan joint training project allowing Vietnamese IT engineers to work with Japanese partners became operational at Ho Chi Minh City-based Quang Trung Software Park last autumn. The UK Brain IT Engineer Training Co is a $1.2 million joint venture between Japan’s Unico Technos and Vietnam’s Kobe Co. It was established with the aim of developing a Vietnam-Japan IT training center, as a bridge for exchanging IT engineers between the two countries. FPT Software, Vietnam’s largest system integration vendor with about 900 engineers, plans to open a vocational school for IT engineers in September with the support of Tokyo’s Keio University and a similar Japanese vocational school. Nihon Unisys set up an offshore software-development firm in Hanoi on June 1. The wholly owned subsidiary USOL Vietnam Corp is capitalized at $100,000. The firm gets full support from FPT Software, which sends engineers on loan, among other things. NEC Soft and Singapore-based NEC Solutions Asia Pacific Pte (NECSAP) also established a joint-venture firm in Hanoi recently to promote their software-development and system-integration business in Vietnam. NEC Solutions Vietnam Co, capitalized at $1 million, began operation on June 1. Fujitsu’s Vietnamese subsidiary also plans to increase its staff. Cybozu, a leading Japanese groupware firm, also started software development in Vietnam on June 1 in collaboration with another Japanese firm, CS Systems Co. The development is being made at the local subsidiary of CS Systems in Ho Chi Minh City. The flow of investment in the IT sector is not always one-way. FPT Software set up its wholly owned Japanese subsidiary, FPT Software Japan, in November to land software outsourcing deals with new Japanese customers. Among major Japanese customers FPT Software has dealt with since setting up the Japanese subsidiary are IT vendors TIS Inc and Hitachi Software Engineering Co and mail-order firm Nissen Co. Banks as go-betweensJapanese banks are ready to cash in on booming Japanese investments in Vietnam. Bank of Tokyo-Mitsubishi UFJ signed a cooperation agreement with the Vietnamese Ministry of Planning and Investment in February to promote Japanese investments in Vietnam. Under the agreement, the leading Japanese bank will hold periodic conferences on investment procedures in Vietnam for Japanese investors. For its part, Vietnam has agreed to inform the bank of amendments to investment regulations and Japanese businesses’ operations in Vietnam. More recently, another major Japanese bank, Sumitomo Mitsui Banking Corp, signed a similar agreement late last month to promote a better understanding of policies and laws in Vietnam by holding seminars and organizing investment missions for Japanese companies that are keen to expand into Vietnamese markets. The Tokyo metropolitan government has teamed up with Japan’s three biggest financial groups – Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group – and about 10 public organizations to provide paid advisory services to local small and medium-size firms keen on making inroads into foreign markets. The services, to be launched as early as late June, will advise such firms on market conditions and legal systems, mainly in Asian countries, utilizing information networks of the three financial groups. For the project’s first year, the metropolitan government has selected Vietnam as its main target country. Among the approximately 10 public organizations participating in the project are JETRO and the Japan Bank for International Cooperation. Meanwhile, Dai-ichi Mutual Life Insurance Co officially launched its representative office in Hanoi early this year, becoming the first Japanese life-insurance company to operate in Vietnam. NIPPONKOA Insurance Co recently forged a business alliance with Bao Viet, Vietnam’s biggest insurer. Under the tie-up, Bao Viet will sell insurance products to NIPPONKOA’s customer firms with operations in Vietnam, where foreign insurers are still allowed only a limited market access. Hisane Masaki is a Tokyo-based journalist, commentator and scholar on international politics and economics. His e-mail address is (Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing .)

Face-saving in Iraq?

Japan’s face-saving exit from Iraq
By Hisane Masaki TOKYO –
After several twists and turns, Japan finally made a long-awaited announcement on Tuesday that it will withdraw its troops from Iraq, a decision that will allow the nation to play on its own ground in post-war Iraq: economic cooperation. Prime Minister Junichiro Koizumi announced that some 600 Ground Self-Defense Force (GSDF) troops stationed in the southern Iraqi city of Samawah would return home. “After closely consulting with the United States, the multinational forces, Britain and Australia, I made the decision because I judged that the humanitarian mission has completed a certain achievement in the region,” Koizumi told a news conference. British forces currently oversee a multinational contingent in Muthanna, which includes Japanese and Australian troops. It will be the first of the Iraqi provinces, outside the relatively peaceful north, to come under full Iraqi control. The transfer of security authority has been the major factor behind Tokyo’s decision on the timing of the GSDF pullout. On Monday, Iraqi Prime Minister Nuri al-Maliki said that Iraqi forces would take over security in the southern province of Muthanna, of which Samawah is the capital, next month. Tuesday’s decision, formalized at the day’s security council chaired by Koizumi, will end Japan’s first – and most dangerous – troop deployment since World War II to a country where fighting is still ongoing. The GSDF troops will retreat to Kuwait – where the Air Self-Defense Force (ASDF) unit is stationed – within a month or so before stepping on Japanese soil again. Koizumi and US President George W Bush, who both took office in early 2001, have forged a close personal relationship. Koizumi has been one of the staunchest supporters of the Bush administration’s “war on terror” as well as the Iraq war. The Koizumi government enacted two new controversial laws to enable the SDF to assist US-led military operations in Afghanistan and Iraq. Under the first law, enacted in October 2001, only several weeks after the September 11 terrorist attacks in the US, SDF naval vessels were dispatched to the Indian Ocean to help with fuel supplies to coalition warships in the US-led operation in Afghanistan. By international standards, even refueling such ships effectively means exercising the right to collective self-defense, an act successive Japanese governments have interpreted as violating the post-World War II, pacifist constitution, which bans the use or threat of force as a means of settling international disputes. Under the second law, enacted in August 2003, the Koizumi government dispatched non-combat GSDF troops to Iraq in early 2004. The SDF troops have been deployed in Samawah on a humanitarian and reconstruction mission, such as medical assistance, water purification and repair of roads, schools and other infrastructure. Although Japan wanted to withdraw earlier, it could not do so because it feared hurting relations with the US by becoming the first among the close US allies in the Iraq war to exit. Japan’s earlier plan to begin a troop withdrawal in March – which received informal approval from the US, Britain and Australia – was botched because of the delay in the formation of a new Iraqi government following mid-December parliamentary elections and a resurgence in insurgent and sectarian violence across Iraq. Significant developments came on June 8, when Maliki announced that Abu Musab al-Zarqawi, leader of al-Qaeda in Iraq, was killed in a US air strike. Zarqawi was accused of advocating and participating in the kidnappings and beheadings of foreign workers. His group claimed responsibility for the kidnapping and beheading of Japanese backpacker, 24-year-old Shosei Koda in October 2004. Shortly after the Zarqawi announcement, the Iraqi parliament approved Maliki’s nominees for the key posts of defense and interior ministers, which had remained unfilled despite the formation of a new coalition government on May 20. For Japan, the British and Australian plans to withdraw their forces from the southern province of Muthanna provided a convenient cover as non-combat Japanese troops are protected by British and Australian forces. To be sure, Japan’s deployment of troops in Iraq marked a turning point in the nation’s security policy and significantly solidified the alliance with the US. But while Koizumi has enjoyed remarkably high popularity, the troop deployment has proved quite unpopular among the Japanese public. Koizumi-Bush meetingNo Japanese troops have been killed in Iraq. Even the killing of a single Japanese soldier would have dealt a severe blow to the Koizumi government. Many analyst say Koizumi has been lucky on this point. Koizumi has been widely believed to have a strong desire to see the GSDF troops return home before he steps down in September, when his current term as president of the ruling Liberal Democratic Party (LDP) – and hence as premier – expires. Koizumi, as premier, will make his last visit to the US at the end of this month. In an apparent quid pro quo for the withdrawal of GSDF troops, Koizumi is expected to tell Bush that Japan will meet the US request for the ASDF’s logistic support activities around Iraq. The ASDF unit, now stationed in Kuwait, will continue with its mission. Three C-130 cargo planes are currently involved in transporting multinational forces’ personnel and materials mainly between Kuwait and Taril Airport in southern Iraq. The security council decided on Tuesday to expand the airplanes’ activities to include Baghdad and the northern Iraqi city of Arbi. This is something Japan has refused to do previously on the ground that it is too dangerous. Koizumi and Bush are expected to reaffirm the solid security alliance between their countries, despite the Japanese troop pullout hiccup. They are expected to agree on the importance of implementing a final agreement their foreign and defense ministers announced in early May on the realignment of nearly 50,000 American forces and bases in Japan. The realignment, which is part of the US’s global “transformation” of its military and includes the transfer of 8,000 US marines from the southernmost Japanese island prefecture of Okinawa to Guam in the Pacific, will further cement the bonds between the allies through increased integration of their military operations. It will also pave the way for Tokyo’s greater involvement in US-led operations not only in Asia, but globally. North Korea will also very likely top the agenda at the Koizumi-Bush meeting, as the Stalinist state is reportedly preparing to test-fire its long-range missile, Taepodong 2, which is reportedly capable of hitting the US West Coast. Iran’s nuclear development program will also be high on the agenda. In his talks with Bush, Koizumi is also expected to express Japan’s firm determination to play a leading role in Iraqi reconstruction. On Monday, Koizumi said that Japan would continue to provide reconstruction and humanitarian aid to the Iraqi people even after the troops were pulled out. Foreign Minister Taro Aso also said, “Japan needs to continue its commitment to assist efforts of the Iraqi government and its people toward nation-building while cooperating with the international community.” Meanwhile, in Baghdad, Japanese Ambassador Hisao Yamaguchi met with the Iraqi prime minister and vowed that Japan would continue to actively support Iraqi reconstruction efforts, mainly through its official development assistance. Japan has taken a high profile in Iraqi reconstruction. In fact, Japan has pledged $5 billion in aid – $1.5 billion in grants-in-aid and $3.5 billion in soft loans – for post-war Iraq, the largest amount committed by any single nation, except the US. The $1.5 billion portion has already been disbursed. According to the US State Department, as of the end of March, of the $13.5 billion total pledged by nations other than the US at an aid conference for Iraq in 2003, only $3.5 billion had been disbursed. This slow pace of disbursements has frustrated the US. In March, Japan lifted a freeze on soft loans imposed since 1985 and decided to provide about 76.5 billion yen (US$665 million) in soft loans to Iraq. Of this amount, 30.2 billion yen will be used for the rehabilitation of Port Umm-Qasr, the most important port of Iraq; 36.7 billion yen for the rehabilitation of al-Mussaib thermal power plants in the suburbs of Baghdad; and 9.5 billion yen for an irrigation project aimed at improving agricultural production and increasing employment. In an apparent bid to demonstrate its firm resolve to assist Iraqi reconstruction, Japan announced on Monday that it would extend an additional soft loan worth about 3.3 billion yen as part of the $5 billion aid package pledged in 2003. This loan will be used for construction of roads and bridges in Samawah. Hisane Masaki is a Tokyo-based journalist, commentator and scholar on international politics and economy. Masaki’s e-mail address is (Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)