Co-operation between Saudi Arabia and Japan In energy could help solve some of the most intractable problems the world faces today, according to one of Japan’s leading business thinkers.
Nabuo Tanaka, chairman of the Sasakawa Pece Foundation and former director of the International Energy Agency, told Arab News that the two countries could help stabilize global energy markets, and also defuse the global controversy over nuclear proliferation - two of the big issues facing the region and the world today.
“The demand and supply balance is a crucial issue for Japan, and Saudi Arabia supplies lots of our oil. The world is well supplied, but there are geopolitical risk to delivery. There has been no reduction in Saudi Arabia’s ability to supply us, so there is no credibility issue there,” he said.
Japan is the fourth biggest importer of oil in the world, and the Kingdom is its biggest supplier, shipping around 40 per cent of its total requirement.
Tanaka, who also served as head of trade at the Japanese economics ministry, was speaking ahead of the list by Japanese prime minister Shinzo Abe to Saudi Arabia.
He said that Abe could be a mediator in the tense relationship between Arabian Gulf states and Iran, as well as the United States.
“Abe has good levels of trust with President Trump, as well as with Saudi Arabia and Iran. He can encourage dialogue between the players, and that may lead the way for a better relationship in the region.
One area where Japan can bring expertise to bear is in nuclear power.
The country has been looking at ways of developing safe nuclear power generation since the 2011 earthquake and tsunami that affected the Fukushima plant, causing deaths and economic damage.
Japan is considering employing new nuclear technology - the “integral fast reactor” developed in the USA - as a safer option and a viable alternative to fossil fuels, Tanaka said. Saudi Arabia is also planning to develop nuclear power generation capacity.
“Japan and Saudi Arabia and others who want peaceful nuclear technology to develop proliferation-free designs,” Tanaka said.
He said the new technology could also offer a solution for Iran and North Korea - two of the current geopolitical trouble spots which are at odds with the rest of the world over their nuclear ambitions.
“Japan can help in this because we are a peaceful nuclear nation. This is visionary. I think it is the only way to solve the nuclear issue in north east Asia and the Middle East,” he said.
“Japan has been talking to the USA about it for some time. The next step is to get it adopted by countries that want to use nuclear power, but not for military purposes,” he added.
He said that the current geopolitical situation in the Middle East was a cause for concern, but saw some recent grounds for some optimism.
“The retaliation by Iran has happened, but it seems to have been controlled. I hope it’s the end of the threat of direct military conflict, but certainly the risk remains of possible attacks.”
Amid speculation that Saudi Aramco might follow its record breaking initial public offering on Riyad’s Tadawul stock exchange with a listing on an overseas market, Tanaka said the Japan stock market would be a good place for such an IPO to take place.
“We would welcome Aramco in Tokyo. The Saudi-Japan strategic relationship is very important and a Tokyo listing would take it to another level,” he said.
Tanaka believes there are important areas where Aramco and Japanese energy can co-operate, including in the use of hydrogen as a “clean” fuel that avoids the environmental problems associated with fossil fuels.