Paper no. 1412	11. 06. 2005
INDO-JAPANESE RELATIONS: HYPE & REALITY by B.Raman (Based on a talk delivered by the writer at the Indo-Japan Chamber of Commerce & Industry, Chennai, on June 10,2005) Prime Minister Junichiro Koizumi of Japan  visited New Delhi for talks with Prime Minister Manmohan Singh and other Indian leaders in the last week of April,2005. In interviews given before the visit, he did not characterise the emerging relationship between India and Japan as a strategic partnership. However, he spoke of a convergence of strategic interests. He said: "Japan and India need each other as strong, prosperous and dynamic partners." He described the objective of his visit  as "to reinforce the Japan-India ties  with a new strategic orientation  in a new Asian era." 2. A joint statement issued at the end of the visit on April 30,2005, spoke of the commitment of the two countries "to a high level strategic dialogue." The dialogue would seek to boost economic, security, energy and other co-operation. It said: " A strong, prosperous and dynamic India is in the interests of Japan and vice versa. ...As partners in the new Asian era and as nations sharing common values and principles, Japan and India will expand their traditional bilateral co-operation to co-operation in Asia and beyond." 3. The use of expressions such as "strategic partnership", " a convergence of strategic interests" , " a strategic orientation to bilateral relations" etc  has become a common place in characterising bilateral relations between different countries. The use of the term strategic generally has two connotations. Firstly, it is a long-term relationship with a common vision and shared interests and concerns and not a tactical, short-term or fire-fighting relationship . 4. Secondly, the  national security  of the two countries forms one of the components of the bilateral relationship. It may be a predominant or very important component as in the case of Pakistan's relations with the US or China or India's relations with the erstwhile USSR or Russia or one of the components without undue importance as in the case of India's relations with the US, Japan, China and many other countries. 5. Addressing an Asian Security conference at New Delhi on  January 29,2005, Shri Pranab Mukherjee, the Indian Defence Minister, said: "  With China today, we share more common interests and areas of agreement, than differences, including a shared commitment to a multipolar world. Our security ties have undergone a change, with resumption of military ties signified by joint exercises, bilateral visits and sharing of information on military matters of joint interest. By institutionalising the Sino-Indian dialogue at a political level, with regular exchanges between designated interlocutors, the territorial and boundary differences between our two countries are being addressed purposefully." 6. He continued: "Similarly, Indo-Japan relations, which plummeted after India’s 1998 nuclear tests, are now positive and robust. The fillip to Indo-Japanese relations was provided by the August 2000 visit of Prime Minister Yoshiro Mori, the first by a Japanese Prime Minister to South Asia in a decade. In his speech he declared, “today Indo-Japanese relations also have a strategic importance, which is quite obvious when we glance at the world atlas”. Despite the geographical distance between the two, there is a growing acceptance that India and Japan share a certain affinity on a number of issues. India and Japan have a convergence on energy issues and have joint concerns about the security of sea-lines of communications and vital choke points in the Indian Ocean. We also share similar concerns about WMD proliferation.  Concerns about WMD terrorism are also equally shared. India and Japan also have views about the restructuring of the UN and the Security Council in particular." 7. He thus identified five areas of strategic convergence between India and Japan. These could be divided into the following three components: POLITICAL: A common objective of securing the permanent membership of the UN Security Council. ECONOMIC: Co-operating  instead of competing with each other in meeting each other's energy requirements to keep their economies sustained and growing. SECURITY-RELATED: Shared concerns over maritime  and weapons of mass destruction (WMD) terrorism and WMD proliferation. Shri Mukherjee did not name any countries while talking of WMD proliferation, but it was apparent that he was having Pakistan and North Korea in mind. 8. The Indo-Japanese common objective of securing the permanent membership of the UN Security Council for which they have been co-operating with each other as well as with the other two aspirants, namely, Germany and Brezil, cannot  be really described as a strategic objective with an enduring vision. Once their present exercise for this purpose culminates in success or failure in the coming months, this objective will cease to be a politically binding factor. Unless, in the meanwhile, they find or identify other, more enduring common objectives, the relationship will become bereft of a long-enduring politicazl glue. 9. What could be such a political glue? This question has not received much attention so far from the strategic analysts of the two countries---governmental and non-governmental. The search for it has to be started and intensified. Their common interest in  facilitating the search for a negotiated solution to the problem of the Tamils of Sri Lanka without affecting the unity and territorial integrity of Sri Lanka, in assisting the African states in the eradication of poverty and disease, in the research and development of medicines for Aids which would be within the reach of the poor people of Asia and Africa, in the protection of the environment etc etc----there are any number of issues with a visionary  impact which could be taken up. How to take them up and pursue them? The time has come to discuss this. 10. Both India and Japan are energy-importing countries. They are dependent on external supplies for keeping their economies sustained and growing. How they could co-operate and help each other in this task? While they have agreed that energy security should be an important component of the bilateral relationship, no concrete action has been taken so far at the governmental and non-governmental levels to translate this agreement into action on the ground. Such action has to be in the form of brainstorming between the experts of the two countries, the drawing-up of a joint or co-ordinated plan of implementation and giving effect to it. 11.Shri Mukherjee did not refer to other equally important aspects of the bilateral economic relations---such as the sluggish growth of the bilateral trade and the unsatisfactory flow of  direct investments from Japan into the Indian economy. The determination of the leaders of the two countries to give a strategic thrust to their bilateral relations is not reflected in the actual state of the economic relations. 12. India has been the largest beneficiary  of development loans from Japan during the last two years. During the last financial year ending March 31,2005, India is estimated to have received from Japan US $ 1.27 billion to improve infrastructure and eradicate poverty. But, the total value of the bilateral trade stood at a meagre US $ 4.35 billion as against the annual Sino-Indian trade of US $ 13 billion. Between 1991, when India started opening up its economy, and 2004, the value of the total flow of Japanese investments into India was estimated at US $ three billion only. 13. The spectacular increase in the value of the Sino-Indian bilateral trade in recent years has been largely due to the large-scale buying of raw matetials by the Chinese industries from India to meet the galloping needs of the Chinese economy. There was a time after India became independent in 1947 when a war-shattered Japan, which had embarked on a programme of restoring its industries, turned to India to meet its requirements of raw materials---particularly iron ore to feed its re-built iron and steel industry. The Japanese economy is no longer as dependent on the import of raw materials from India as it used to be in the 1950s and the 1960s or as the Chinese economy is now. 14. Indian iron ore is still an important item of export to Japan, but not to the same extent as in the past. The Indian export basket to Japan is still small---iron ore, sea food, textiles and jewellery being the main items. A drive for the expansion and the diversification of the bilateral trade was undertaken after the visit of former Prime Minister Mori in August 2000. Information Technology (IT) products and services were identified as an item, which could have a trigger effect. 15. A Japan-India IT Promotion and Cooperation Initiative was launched and a Japan-India IT summit was held in Japan. Japan liberalised rules for the issue of multiple-entry  visas for IT experts  from India. It has been estimated that about 50 Indian IT companies have already set up offices in Japan. Despite all these measures, the total value of the export of Indian software products and services to Japan was estimated in the financial year 2002-2003 at an insignificant three per cent of the total value of India's global exports of software products and services. While the figures for the subsequent period are not yet available, the increase has not been substantial. 16. A hurdle in the way of stepping up the exports of IT software products and services to Japan has been the fact  that the Indian IT industry is geared up to meet largely the needs of the English-knowing and English-using clientele and not the non-English-knowing and non-English-using customers. Unless the Indian IT industry develops its language capability in a significant measure, its export market will remain largely confined to the English-using world. China, which has been paying more attention to the needs of the non-English using world, is likely to steal a march over the Indian IT software industry.  The Chinese have been showing a remarkable thirst for learning the Japanese language. It has been estimated that the Chinese constitute nearly two-thirds of the foreign students studying in Japan. 17. India has some showcase examples of Indo-Japanese economic collaboration. One could cite in this connection the Maruti car project, the Haldia petrochemical complex and the Delhi Metro presently under construction. But those are exceptions that do not disprove the reality of inadequate Japanese interest in investments in India as compared with their enthusiasm for China despite their tension-ridden political relations with China. 18. Among the reasons cited for the poor flow of Japanese investments into India are the unpredictability and sluggishness of the Indian decision-making and  implementation process; the tendency to unduly politicise the economic decision-making process which often results in each Government reviewing and sometimes reversing the economic decisions of its predecessor; the poor state of infrastructure as compared to China; the inadequate and erratic power supply; the high cost of power supply as compared to China; and the restrictions (now being removed) on foreign investments in the retail and real estate sectors. It is said that a substantial part of the foreign investment flows into China has been in the retail and real estate sectors and that by keeping these sectors closed until recently, India has denied itself the benefit of a similar flow. 19. It is also pointed out that in the initial years much of the Japanese investments in the manufacturing sector in China was meant to produce cheap consumer goods for the Japanese market by taking advantage of the low wages and other favourable labour conditions in China. A high-value yen had pushed up the cost of production in Japan, thereby driving the Japanese companies to invest in China in order to lower the cost of production of the articles required by the Japanese consumers. It is said that opportunities for such reverse imports do not exist in India. 20. Security-related issues are only now emerging as a component of Indo-Japanese relations. The present focus has been on the  need for co-operation against maritime piracy, which is a reality, and maritime terrorism, which is a possibility. The threat perceptions of the two countries relating to maritime terrorism are unlikely to be identical. The possibility of threats in the choke-points of the Gulf area would be of equal concern to the economies of India, Japan and China, but threats in the choke-points of South-East Asia would be of greater concern to Japan and China than to India. 21. Despite this, the Indian Navy seems to be keen to play an active role in South-East Asia.  Opportunities for such a role in the Gulf are limited because of the heavy US presence there  and the likely concerns of the countries of the Gulf  area  over the reactions of Pakistan to an enhanced role for the Indian Navy.The littoral States of the Malacca Strait such as Singapore, Malaysia and Indonesia would be more comfortable with an Indian role in ensuring  maritime security against pirates and terrorists than an American or a Japanese or a Chinese role.The US and Japanese navies would prefer a participatory role for themselves, but if there is resistance to this, they would be comfortable with an Indian role. The Chinese are  opposed to an American or a Japanese role, but  their attitude to a possible Indian role is unclear. Anyhow, it would not be advisable for the Indian Navy to get involved in the actual patrolling of the Malacca Strait even in the unlikely event of being invited by the littoral states to do so.It should confine its co-operation to exchange of intelligence, provision of training facilitiesand  joint anti-piracy and anti-terrorism exercises with the navies of South-East Asia. 22. After the visit of Koizumi to New Delhi, there has been a talk of similar anti-piracy and anti-terrorism c-operation between the Coast Guards of India and Japan.China is and would continue to be an inhibiting factor in the development of the full potential of the bilateral relations between India and Japan in the security-related fields. It is interesting to note that in his speech of January 29,2005, Shri Mukherjee highlighted the developing military-to-military relationship between India and China, but refrained from commenting on the possibility and desirability of similar relationship with the Japanese Armed Forces. Any attempt to give a higher importance to security-related Indian co-operation with Japan is likely to be inhibited by concerns over its likely negative impact on the developing Sino-Indian relations, which are more multi-dimensional than the Indo-Japanese relations. 23. No other country in Asia has benefited more from the Japanese economic interest than China, but there is hardly any political bonding between the two countries.  The perceived identity of perceptions between Japan and the US in matters such as the security of  Taiwan adds to the traditional Chinese distrust of Japan. The Chinese attitude to Japan has been very short-sighted.  The European victims of the Nazi war crimes have not allowed lingering memories of such war crimes to affect their relations with Germany. In fact, after the end of the Second World War, they assisted the new post-Nazi German leadership and people to rid themselves of the guilt complexes arising from the war crimes of their predecessors. They had the mental generosity to  realise that they cannot hold the new generation of German leaders and people responsible for the war crimes of their predecessors. 24. Signs of such a mental generosity are not yet evident in China. They continue to hold the present Japanese leadership and people responsible for the war crimes of their predecessors. They are not prepared to assist the Japanese leaders and people to rid themselves of the guilt complexes arising from the war crimes of their predecessors. On the contrary, the Chinese leadership keeps stoking them. 25. So long as this Chinese attitude lasts, the scope for the full development of China's relations with Japan would remain limited and this could have a drag effect on the development of Indo-Japanese relations too. We have to live with this reality. (The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical  Studies, Chennai, and, Distinguished Fellow and Convenor, Observer Research Foundation (ORF), Chennai Chapter. E-mail: itschen36@gmail.com )
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