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January 12, 2014 7:30 pm
Japan is flexing its diplomatic and commercial muscle in Africa, seeking commodities and new markets in an effort to catch up with other nations, including China, which have poured billions of dollars into the region in recent years.
Shinzo Abe is leading the first visit by a Japanese prime minister to sub-Saharan Africa in eight years this week to support “Japanese companies’ investments to secure important natural resources” in the region, Tokyo said.
The top Japanese trading houses, or sogo shosha, have already started to pour billions of dollars into projects including Mitsui’s project in Mozambique to produce liquefied natural gas. Sumitomo and Mitsubishi are also targeting the region.
David Shinn, professor of international relations at George Washington University and a former US ambassador to several African countries, said the trip was a “belated recognition” that Japan was “falling behind a number of rising countries in Africa”, including China, India, Brazil, South Korea and Turkey.
The increase of Japanese investments in Africa, particularly in commodities, could provide an important counterweight to China’s influence, foreign executives said. In recent years, a growing number of African officials have voiced concern that China is taking the continent’s natural resources and selling back manufactured goods, a relationship that echoes the European colonialists one a century ago.
Hiroyuki Takai, head of research at Sumitomo, the Tokyo-based trading house, said the Japanese push would trigger some “competition between Chinese and Japanese companies”. But he played down the prospect of a clash, saying: “It’s good and healthy to have fair competition on behalf of the African countries.”
Mr Abe is set to announce more than Y60bn ($570m) in loans to Mozambique to help finance a transport network to transport coal to a new export terminal. Last year Tokyo promised more than $30bn in aid to African countries over the next five years.
The renewed push into Africa started to gather pace last year but the trip will take it to a new level, diplomats said. A similar push in 2008 fizzled out soon after.
Mr Shinn added that the trip was also a “recognition that there is more money to be made in Africa today than was the case” since a Japanese prime minister last visited the region eight years ago. The International Monetary Fund forecasts that the economy of sub-Saharan Africa will grow 6 per cent in 2014, second only to the 6.5 per cent growth rate in the developing Asia region, which includes China.
Analysts cautioned that the Japanese push in Africa had its limits. Tokyo is unlikely to match the firepower of China, which has invested billions of dollars in the region, on top of billions more in no-strings-attached soft loans that have financed railways, power plants and other infrastructure projects across Africa. Chinese trade with Africa is far larger too, rising in 2012 to nearly $180bn, compared with $25bn for Japan.
Perhaps the biggest example of Chinese dominance will become apparent on Tuesday, when Mr Abe gives his policy speech on Africa at the headquarters of the African Union, a $200m building funded by China as a gift to the continent.
The renewed engagement with Africa is part of a broader effort by Mr Abe to put an assertive stamp on Japan’s foreign policy. In the year since he returned to power for a second stint as prime minister, he has made about one overseas trip a month, notably more than his recent predecessors.
Some of the trips, in particular to southeast Asia, have given the impression of an alliance-building campaign directed at China, though commercial motives have also been prominent, from natural-resource development deals to an agreement to sell Japanese nuclear technology to Turkey.
Additional reporting by Jonathan Soble in Tokyo
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