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Al-Ahram Weekly 15 - 21 April 1999 Issue No. 425 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 15 - 21 April 1999 Issue No. 425
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| Published in Cairo by AL-AHRAM established in 1875 |
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News analysis
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Better for both
By Abdel-Azim HammadPresident Mubarak's recent trip to China, South Korea and Japan clearly reflected Egypt's interest in developing ties with major Asian countries. The visits also indicate that Egyptian policy in Asia is responding to major international changes. As Cairo seeks to intensify economic cooperation and develop a solid base of mutual interests with the Asian countries, it is gradually widening its perspective beyond the exclusive focus on the alignment of policy positions on major international issues. While political considerations once shaped economic relations, in other words, this is no longer the case.
Egypt is now more interested than ever in adjusting its trade balance with Asia -- $230 million in exports, as against $1,600 million in imports -- and in attracting investments, technology and expertise. These goals will be met, it is hoped, by establishing joint ventures and by attracting Asian tourism.
This is not to say that the political aspects of Egyptian-Asian relations will be neglected. Many regional and global political problems concern both sides and require close cooperation, from the reform of the United Nations and the international economic system, to the peace settlement in the Middle East and the financial crisis in southeast Asia.
A basic question remains, however: will Asia's interests incite the countries of the region to respond to Egypt's positive steps in kind? The answer must be yes. The existence of such interests, and the understanding of what mutual benefits can accrue from any partnership arrangement, is essential to the establishment of strong relations. This understanding has long informed Chinese foreign policy, and has begun to influence policy in several other Asian countries.
In Beijing, Tokyo and Seoul, Asian leaders have emphasised the importance of strengthening political ties with the Middle East, as well as extending and intensifying economic cooperation with this region. Since January 1996, the Japanese government has been concerned with revising certain foreign policy stands. Former Prime Minister Hashimoto summed up this new trend, stating that his country "must refrain from taking for granted any previously adopted international political positions. Japan has to undertake active initiatives and transcend the precept of being just a financial donor."
The Middle East was among the first regions to which Japan applied this new, dynamic diplomacy. It was a vocal supporter of both the call to implement the Palestinian-Israeli peace accords and the Palestinian people's right to self-rule. Sheer altruism, of course, does not a viable policy make: "Coming up with initiatives on global stability and development is the best means of ensuring Japanese security and prosperity," Hashimoto said. "Japan needs to draft a new development strategy based on comprehensive economic cooperation. This will be of assistance in establishing trade relations and investing in other countries. Japan will always rely on outside sources for its power supply and raw materials to increase its exports," he explained.
The Chinese premier and deputy foreign minister has also indicated that China is currently engaged in drafting its new policy on the Middle East. In a similar vein, the head of the International Relations Section at the Institute for Western Asian and African Studies of the Chinese Social Sciences Academy recently wrote: "China has decided to rectify the flaws in its Middle East policies. Most importantly, China seeks to expand its relations to cover all political, economic as well as cultural fields. Secondly, it desires to establish such relations with all countries of the Middle East while avoiding involvement in any of their disputes."
While China did not complete its diplomatic fence-mending with all Middle East countries until 1992, after that time, and especially from 1993 onward, it increased the volume of its trade with the region by a staggering 40 per cent, pushing the total volume up to $3,100 million. Japan and South Korea had preceded China by investing intensively in the Middle East markets.
The Arab world, however, is not merely a market for Asian exports. It is also the foremost supplier of energy to many strategic Asian industries. Japan relies on the Gulf region for 80 per cent of its oil and natural gas requirements. In fact, the Japanese economy suffered severely when Arab countries imposed a ban on their oil exports during the October War.
Although China is an oil-producing state, it entered the international market as an oil importer in 1993. It began by importing petro-chemicals and, in 1996, turned to importing crude oil. At present, it imports 53 per cent of its oil requirements from the Gulf region. Chinese experts expect the country's oil reserves to dwindle and dry up by 2025, and the government is already involved in joint investment projects for the development of oil fields in the Middle East and Central Asia.
According to the Chinese premier, however, if any benefits are to be derived from energy sources in Central Asia, huge investments will be required. An initial outlay of up to $50 billion, covering not only production operations but also the laying down of pipelines, will be necessary. The plan to invest in developing Middle East oil fields, therefore, is economically far more attractive. Oil can be transported to China by traditional maritime methods, without the need for investments the Chinese economy cannot afford.
Asia's desire to invest in Middle East oil resources is linked to its need to invest in other types of projects in the region. The Asian countries in general lack most of the resources -- including fertile soil and a favourable climate -- necessary for agricultural production. The Middle East, therefore, offers the ideal opportunity for Asian investors to set up joint ventures in desert reclamation and other areas.
In addition, the Asian economies that followed the Japanese development pattern are currently seeking to emphasise production for export. Projects on which Arab and Asian investors can cooperate will allow the economies of both regions to make considerable inroads into the European and African markets.
It is true that the Asian countries are not yet capital exporters like the United States or Europe. But the rapid expansion and growth of their economies have rendered cooperation on investment projects imperative. Egypt represents the ideal partner for most of these countries, since its development plans give top priority to joint ventures and the diversification of economic partners. Having completed its economic reform programme, Egypt has established a political and legal framework designed to encourage foreign investment. Furthermore, it has concluded a series of agreements for freer trade with Arab and African countries, and is about to ratify a partnership agreement with the European Union.
Ensuring a continuous flow of the energy resources vital to growth in Asia will always require a climate of political stability in the Middle East. The vast investment potential in the Egyptian petroleum sector, Asia's focus on developing oil and natural gas resources, and the petro-chemical industries in the Gulf and the Sudan make this region a strategic linchpin as far as Asia is concerned. And Asian leaders, like their counterparts worldwide, know that Egypt's role in the region is crucial in guaranteeing such stability.
