Publication: Eurasia Daily Monitor Volume: 3 Issue: 49

President Ilham Aliyev’s official visit to Japan on March 8 marks another milestone in Azerbaijan’s slow re-orientation toward Asia. During the visit, he met with Japanese Emperor Akihito, Prime Minister Junichiro Koizumi, Foreign Minister Taro Aso, and the head of the Japanese International Development Agency (ANS TV, March 8). Aliyev and Koizumi signed several agreements to expand bilateral cooperation.

Aliyev delivered a keynote speech at the Japanese Institute for International Relations and attended a business forum that hosted more than 150 businessmen from both countries (Echo, March 8). Hosting business forums in conjunction with President Aliyev’s visits abroad has become a regular event, which shows his strong commitment to developing economic ties with foreign countries and attracting new investment to Azerbaijan.

The business agenda for Aliyev’s visit is particularly noteworthy. It included presidential meetings with the heads of several large Japanese companies, including Itochu and Inpex, as well as with members of the Japanese-Azerbaijani Parliamentary Friendship Society.

The growing Japanese demand for energy makes Tokyo a reliable and eager partner of Azerbaijan, which is increasing its oil production year-by-year. At the same time, the development of infrastructure in Azerbaijan requires technical assistance from abroad. During the visit, Azerbaijan and Japan signed an agreement on the provision of technical assistance to Azerbaijan by the Japanese government (Trend, March 7).

One of the key goals of President Aliyev’s visit was to draw more Japanese investments into the Azerbaijani economy, particularly sectors other than oil. Speaking at the Business Forum in Tokyo, Aliyev said, “We have a very good investment climate. Azerbaijan highly values direct foreign investments. We have received a great deal of assistance from Japan in the past. But now, the time for real, active cooperation has come” (Xalq Qazeti, March 12). During his meeting with President Aliyev, Prime Minister Koizumi also noted the friendly nature of bilateral relations and stressed that Japan was looking for reliable a partner in the region (Sherg, March 11).

Japanese businesses have already invested more than $844 million in Azerbaijan, primarily in the oil sector. Mitsui and Mitsubishi provided Azerbaijan with loans up to $274 million for construction of the “Severnaya” power generation plant in the vicinity of Azerbaijan’s capital, Baku. The plant came online in early 2003. Altogether, Japan’s overall assistance to Azerbaijan through various organizations has reached $694 million, including $74 million in grants (Turan, March 6).

Japan has been particularly keen on funding the construction and repair of new public schools in Azerbaijan and providing educational opportunities for the country’s youth. For his efforts to promote education in Azerbaijan, former Japanese ambassador to Azerbaijan Toshiyuki Fujiwara was awarded with the highest state prize ever given to a foreign ambassador, the Order of Honor, and ANS Media Group named him “Man of the Year.” Azerbaijan has opened a department of Japanese language at Baku State University, where more than 40 students currently study. Aliyev also hopes to draw the Japanese government’s attention to the plight of internally displaced persons in Azerbaijan, a population that receives less and less humanitarian assistance each year. Japan is traditionally one of the largest humanitarian donors around the world.

With Western countries and organizations pressing Aliyev regarding democratization, the Azerbaijani president feels much more comfortable with the less-demanding Eastern partners. Thus, the development of relations with the Middle Eastern countries as well as with China, Japan, and Pakistan are seen as priorities. Although Azerbaijani foreign policy officials continue to claim that the country is pursuing a balanced foreign policy, a strong bias toward Asia is evident.

Azerbaijan also hopes that Japan will support its case regarding the ongoing Karabakh conflict with Armenia. Baku is prepared to support Japan’s nomination to the UN Security Council in exchange for help with Karabakh. Lider TV reported on March 8 that President Aliyev had devoted much of his speech at the Japanese Institute for International Relations to the Karabakh conflict. Koizumi confirmed Japan’s recognition of Azerbaijan’s territorial integrity during his private talks with Aliyev (Sherg, March 11).

Ties between Japan and Azerbaijan are increasing markedly. First established in 1992, bilateral relations skyrocketed following former president Heydar Aliyev’s visit to Japan in 1998. Baku subsequently negotiated with Japanese companies to secure their involvement in the Ateshgeh, Mugandeniz, and Yanan Tava Caspian oil fields (Zerkalo, March 8). Azerbaijan recently opened a new embassy in Tokyo.

At the moment, Azerbaijani-Japanese trade is nearly $70.6 million, yet much of it ($52.3 million) comes from imports of Japanese products into Azerbaijan, such as steel pipes, electric appliances, transmissions, spare parts, and telecommunication materials. Azerbaijan exports alcohol, carpets, plastic, and textiles.

The visit should open new opportunities for bilateral cooperation. Novruz Mammadov, head of the International Relations Department within Aliyev’s office, told Trend News Agency on March 7, “The visit carries a very important nature, both from the side of inter-governmental and also inter-parliamentary relations. The purpose of the visit is to deepen these relations in all spheres.”